A 2020 Introduction to Litecoin (LTC)

Key highlights:

  • Litecoin is one of the oldest public open-source cryptocurrencies 
  • Being slightly faster and cheaper in terms of fees Litecoin can indeed be considered as Bitcoin tailored for day-to-day usage
  • Bitcoin and Litecoin are very similar architecture-wise
  • Litecoin’s native currency is LTC and its total supply is set to 84 million units

If you’re a crypto veteran, you probably don’t need an introduction on Litecoin, but newcomers often misunderstand LTC at first glance.

Many people expect that LTC is some sort of an alternative cryptocurrency with unique use-cases that should be used in specific scenarios etc, but that’s not really the case. 

Often referred to as the silver to Bitcoin’s gold, Litecoin is one of the oldest public open-source cryptocurrencies out there and it is as simple as it sounds: A lite version of Bitcoin

It was initially conceived and launched back in 2011, by computer scientist Charlie Lee, who understood Bitcoin’s block size, transaction times and fees would eventually lead to unavoidable bottlenecks.

Hence, Litecoin can be considered as the first derivative of Bitcoin which simply changed some of Bitcoin’s core parameters, and introduced minor technical modifications to create a digital peer-to-peer (p2p) payment network similar to Bitcoin, yet more efficient from a few angles. 

Charlie Lee, who previously worked for Google and Coinbase, says that Litecoin is not meant to compete with Bitcoin, but rather to accompany it, and carry some of its weight to ensure stability and integrity even during crypto rush hours.

Being slightly faster and cheaper in terms of fees, Litecoin can indeed be considered as Bitcoin that’s tailored for day-to-day usage.

Tokenomics

Litecoin Network’s native currency is naturally LTC, and unlike Bitcoin, its total supply is set to 84 million units. Currently, over 63 million LTC units are circulating, which is over 75% of the total supply.

Litecoin occupies the 7th spot by market capitalization with $3.5 billion, while LTC is currently being traded at around $56 a piece. During its very peak, Litecoin reached a market cap of $20 billion and one LTC was changing hands at around $370. 

Utilizing a Proof of Work (PoW) consensus architecture similar to Bitcoin, Litecoin uses miners to validate and promote transactions on the network. A transaction can take up to 2 minutes during normal congestion times. 

The block reward for a successful LTC miner is set to 12.5 LTC and it will halve in August of 2023. Conversely, Bitcoin’s next halving is expected to happen this May. 

Litecoin versus Bitcoin

It is correct to assume that Bitcoin and Litecoin are very similar architecture-wise, yet some key differences between the two projects create a standalone rivalry. 

The most noticeable difference would be the fact that Bitcoin uses the standard NSA SHA-256 military-grade algorithm which is commonly used by Google, Amazon, Microsoft and more computing giants due to its strong security. On the other hand, Litecoin uses Scrypt algorithm, which is less energy-intensive, but extremely memory-intensive. 

In simpler terms, Bitcoin can now only be efficiently mined with Application Specific Integrated Circuits, commonly known as ASICs, while Litecoin could be mined with regular CPUs and GPUs making it more accessible. 

At the same time, Litecoin has significantly lower fees and faster transaction times when compared to Bitcoin. A drawback of Litecoin is that it has a low rate of adoption, especially when compared to Bitcoin.

Verdict 

As you should have figured out already, Litecoin is not that complex neither it aims to disrupt the cryptocurrency scene as many other digital currencies tend to do in an attempt to compete with Bitcoin. 

In opposition to many other altcoins, the people behind the Litecoin project often say that it is made to accompany Bitcoin through its journey, and its goals are simply to offer faster and cheaper monetary transactions when Bitcoin is struggling. 

Should you get a 2020 introduction to Bitcoin to compare both projects for yourself? Feel free to read our relevant article.

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