Litecoin has yet to achieve volume of Bitcoin and Ethereum, but it remains one of the oldest, largest, and most accessible cryptocurrencies. As a direct descendant of Bitcoin, Litecoin has also been a crucial testing ground for many of BTC's network upgrades. Due to Litecoin's close ties with Bitcoin, both projects are very similar. However, Litecoin isn't just a carbon copy of the Bitcoin blockchain. There are many unique features and use cases Litecoin offers to crypto holders.
Anyone interested in the history of cryptocurrency should learn what Litecoin is and its role in the crypto ecosystem.
Litecoin has yet to achieve volume of Bitcoin and Ethereum, but it remains one of the oldest, largest, and most accessible cryptocurrencies. As a direct descendant of Bitcoin, Litecoin has also been a crucial testing ground for many of BTC's network upgrades. Due to Litecoin's close ties with Bitcoin, both projects are very similar. However, Litecoin isn't just a carbon copy of the Bitcoin blockchain. There are many unique features and use cases Litecoin offers to crypto holders.
Anyone interested in the history of cryptocurrency should learn what Litecoin is and its role in the crypto ecosystem.
Litecoin (LTC) is a cryptocurrency that aims to be a faster and cheaper version of Bitcoin. While some investors buy Litecoin as a long-term investment, it's more often associated with peer-to-peer (P2P) payments. Since Litecoin's founding, many have compared it to "silver" in contrast to Bitcoin's status as "digital gold."
Computer programmer Charlie Lee is the primary force behind Litecoin. While working as a software engineer at Google, Lee heard about the Bitcoin whitepaper and started investigating blockchain technology. Lee's brother Bobby Lee also launched one of China's largest Bitcoin exchanges (i.e., Bitcoin China) around this time. After months of experimenting with Bitcoin's code, Charlie created his own cryptocurrency modeled on BTC. In 2011, he "forked" the Bitcoin blockchain to create Litecoin. When developers "fork" a blockchain, they make a modified chain related to the original network.
Litecoin uses the same proof-of-work (PoW) consensus mechanism on the Bitcoin network. Anyone can validate blocks of transactions on Litecoin's blockchain through crypto mining. Every 2.5 minutes, Litecoin miners have to solve an advanced algorithmic puzzle to add a transaction to the blockchain. Whenever someone successfully solves this puzzle, they receive LTC rewards.
Although Litecoin’s PoW architecture is similar to Bitcoin’s blockchain, LTC uses a consensus algorithm called Scrypt rather than Bitcoin’s SHA-256. Scrypt is less energy-intensive than SHA-256, which helps Litecoin achieve faster transaction speeds and lower network fees.
Today, Singapore-based nonprofit Litecoin Foundation coordinates development on the Litecoin blockchain.
Litecoin's primary use cases are the same as Bitcoin's: P2P payments and a store of value investment. However, LTC is more closely associated with day-to-day transactions. The faster speeds and lower fees on Litecoin's blockchain make it better suited for micro-purchases like groceries or gas. However, since LTC has a limited supply, some investors believe what Litecoin is worth today will rise as crypto adoption increases.
From a development perspective, Litecoin has been the primary testnet for the Bitcoin blockchain. Since Litecoin and Bitcoin are similar, many BTC developers first test code upgrades on Litecoin's network. For instance, Litecoin was the first blockchain to use the layer-2 lightning network, which allows users to make fast and cheap microtransactions on Bitcoin.
Litecoin has many attractive traits that have helped it become one of the most traded altcoins.
Although Litecoin is a top-tier cryptocurrency, it has a few potential downsides.
Merged mining occurs when two separate blockchains join forces using the same consensus algorithm. This topic is significant for Litecoin because Dogecoin (DOGE) is merge mined on the LTC network.
Launched on a separate blockchain in 2013, Dogecoin is a PoW cryptocurrency inspired by the Shiba Inu meme. About one year after its founding, Charlie Lee suggested merge mining Dogecoin with Litecoin’s Scrypt algorithm for enhanced security. The DOGE community agreed to Lee's proposal, and the two cryptos have been linked ever since.
As Bitcoin and Litecoin have nearly identical designs, here are some of their similarities:
Despite all of Litecoin's similarities to Bitcoin, it has a few noteworthy features that set it apart.
Litecoin may not be as revolutionary as Bitcoin or Ethereum, but it has played a notable role in the history of crypto. In addition to its use as a P2P currency, Litecoin has been a testing ground for notable upgrades such as the Bitcoin Lightning Network. While it's unclear what the future holds for Litecoin, it’ll likely remain a central currency in the crypto economy.
Worldcoin is another crypto project interested in bringing blockchain technology into more people's lives. We aim to put a share of our crypto in everyone’s hands for free. We’re also airdropping DAI stablecoins to anyone who downloads our app. Subscribe to our YouTube channel to learn more.