Hey guys :) Today I’ve compiled a comprehensive list of questions and detailed answers to help you understand one of the most well-established and successful cryptocurrencies in the world – Litecoin (LTC).
Hope you enjoy!
The list of Q&A is pretty long so first comes the list of questions that I have prepared the answers to:
- What is Litecoin?
- Who and When Created Litecoin?
- How is Litecoin Different Than Bitcoin?
- Can You Mine Litecoin?
- What is the Litecoin Foundation?
- What is Litecoin’s Hashing Algorithm?
- What is the Maximum Supply of Litecoins?
- How Fast is Litecoin Compared to Bitcoin and Ethereum?
- Where to Store Litecoin?
- Where to Buy Litecoin?
1. What is Litecoin?
Litecoin website homepage
Litecoin (LTC) is a peer-to-peer cryptocurrency based on blockchain technology that enables instant, near-zero cost payments to anyone in the world. Litecoin’s codebase is 100% open-source and its global blockchain network is fully decentralized without any central authorities.
Litecoin’s blockchain network is secured by cryptography and mathematics through a Proof-of-Work mining algorithm similar to that of Bitcoin’s. Also like Bitcoin, Litecoin empowers individuals to control their own finances and be their own bank.
The Litecoin cryptocurrency has garnered substantial industry support, trade volume, and liquidity, making it a proven medium of commerce complementary to Bitcoin.
That being said, Litecoin’s primary purpose and value proposition is to be a cryptocurrency for instant, near-zero payments.
However, Litecoin holds other unintentional traits that give it a deeper purpose and value. For instance, Litecoin’s code is derived from the Bitcoin protocol and therefore the two cryptocurrencies are very similar down to their core.
Therefore, when there's a new upgrade that could be implemented on Bitcoin to make it faster, more scalable, more private, etc., it can first be adopted and tested by Litecoin to ensure its viability before implementation on the king.
To provide some examples:
- Litecoin adopted Segregated Witness (SegWit) to improve transaction speeds before it was approved for Bitcoin.
- Litecoin completed the first Lightning Network transaction in 2017, before Bitcoin.
- Litecoin is experimenting with the implementation of confidential transactions by integrating the MimbleWimble protocol. Again, it’s doing this before Bitcoin.
All in all, Litecoin is both a cryptocurrency for payments and a sort of testnet for Bitcoin.
It is the “silver to Bitcoin’s gold”.
2. Who and When Created Litecoin?
Charlee Lee, creator of Litecoin
Litecoin (LTC) was created by Charlee Lee, a former Google employee and Engineering Director at Coinbase. The first time Lee publicly announced his idea for Litecoin was in October 2011 when he released it as an open-source client on GitHub. Soon after this, the Litecoin Network was born into existence with its network going live on October 13, 2011.
Divulging more about Litecoin’s creator Charlee Lee, the man was born in Ivory Coast and moved to the United States at the age of 13. He graduated high school in 1995 and went on to study at the Massachusetts Institute of Technology (MIT) where he obtained a bachelor's and master's degree in computer science in the year 2000.
For the next decade, Lee worked for Google where he contributed code for Chrome OS among other Google projects. Then in 2011, Lee became interested in Bitcoin and began experimenting with Bitcoin’s code while working at Google. This is when Lee became active in Bitcoin talk forums and released his idea for Litecoin to the world after mining only 150 coins.
As mentioned above, Litecoin went live on October 13, 2011, and has been active with no downtime ever since.
In July 2013, Lee left Google to work full time in the cryptocurrency space. He began working at Coinbase as an Engineering Manager and then Director of Engineering before leaving in June 2017.
Also in 2017, Lee announced on Reddit that he sold almost all of his Litecoin holdings due to a so-called conflict of interest. Lee’s selling of his coins just so happened to be at the top of the cryptocurrency bull market in December 2017. Lee’s selling of his LTC holdings became a controversial move as people called him out for dumping his stack on the market at the top.
To this day (March 31, 2020), Lee continues to work full-time with the Litecoin Foundation and pushes for the adoption of Litecoin (LTC).
3. How is Litecoin Different Than Bitcoin?
The main difference between Litecoin and Bitcoin is that Litecoin has faster block times and more transactions per second (more on these stats below).
Other major differences include: Litecoin is widely considered to be the "silver to Bitcoin's gold", Bitcoin is older than Litecoin (2009 vs 2011), and Bitcoin's creator is pseudonymous while Litecoin's creator is known – Charlee Lee.
Diving into the differences even further, you'll see that Litecoin has some key differences from Bitcoin on both a technical and fundamental level. Let's explore these below.
Litecoin was launched with an aim to increase the transaction speed and make it more scalable than Bitcoin. Therefore, the following differences were implemented into Litecoin’s codebase:
- A decreased block generation time (2.5 minutes opposed to Bitcoin’s 10 minutes)
- Increased maximum number of coins (84,000,000 LTC opposed to 21,000,000 BTC)
- A different hashing algorithm (Scrypt, instead of SHA-256)
- A slightly modified graphical user interface (GUI)
When Lee created Litecoin, he intended it to serve as the “silver to Bitcoin’s gold”, rather than to compete with it. That being said, Lee designed Litecoin with:
- A higher number of maximum coins to make buying 1 LTC always more affordable than buying 1 BTC to consumers.
- The ability to mine LTC with consumer-grade hardware as opposed to the specialized mining hardware that Bitcoin utilizes.
- Faster and cheaper transactions so that consumers could use LTC for smaller day-to-day transactions.
In addition to these technical and fundamental design differences between Litecoin and Bitcoin; the two coins differ in terms of popularity, liquidity, network effects, adoption, security, and decentralization.
The difference is that Bitcoin outperforms Litecoin in all of these areas quite significantly. This is why Bitcoin is the number 1 cryptocurrency while Litecoin hovers between positions amongst the top 10 coins by market cap.
4. Can You Mine Litecoin?
GPU mining rig
Yes, you can mine Litecoin (LTC).
In Litecoin’s early days, LTC could be mined with consumer-grade hardware such as your computer’s CPU or video graphics card and you would make a profit. Today, however, this is no longer the case as Scrypt ASIC miners have entered the market.
While Litecoin mining isn’t as developed as Bitcoin mining, it is still far more resource-intensive than it once was. That said, there are now three options for mining Litecoin:
- Solo Mining
- Join a Mining Pool
- Use a Cloud Mining Service
If you want to mine Litecoin on your own, you will need to purchase specialized hardware designed for mining Scrypt-based cryptocurrencies. Such mining hardware is known as ASIC (application-specific integrated circuit) miners which require a decent amount of electricity and fans to keep them cool. The good thing about solo mining is that you don’t have to share your mining rewards, but you do have to pay your electricity bill.
Join a Mining Pool:
If you think your computing power is too small and that solo mining isn’t worth it, you can contribute your computing power to a mining pool and join forces with other miners. This method enables miners to receive payouts more often but in smaller quantities as the reward is shared among miners in the pool.
Use a Cloud Mining Service:
If you don’t want the hassle of buying and setting up your own mining rig, you can lease Litecoin mining equipment for a set period of time. This method of mining has the lowest upfront costs and allows you to easily participate in mining Litecoin. However, this service is not as profitable because you don't actually own your own mining equipment. Also, you need to be careful not to fall victim to a scam mining service where they take your money for leasing a miner but don't actually pay you proper mining rewards, if any at all, in return.
5. What is the Litecoin Foundation?
The Litecoin Foundation is a non-profit organization with members around the globe who share the mission of advancing Litecoin for the good of society by developing and promoting state-of-the-art blockchain technologies.
The Litecoin Foundation is spearheaded by Charlee Lee as the Managing Director followed by 6 other directors, 2 full-time developers, 15 volunteers, and core contributors, and 8 lead ambassadors.
Operating separately from the Litecoin Foundation is the Litecoin Core development team which includes all developers of the Litecoin project. While they operate separately, the Litecoin Foundation supports them with development and funding.
Official partners of the Litecoin foundation include:
- Travala.com – enables consumers to book 567,928 hotels in 210 countries across 82,311 destinations with Litecoin.
- Travelbybit.com – enables consumers to book flights and hotels with crypto.
- LuxuryTravelDiary.com – a luxury vacation service accepting Litecoin.
- Aliant Payments – an accredited Litecoin payment processor.
- Coingate – an Accredited Litecoin payment partner.
6. What is Litecoin’s Hashing Algorithm?
Litecoin uses the memory intensive Scrypt hashing algorithm instead of the SHA-256 hashing algorithm used in Bitcoin. In Litecoin’s early days, its Scrypt hashing algorithm allowed for consumer-grade hardware such as GPUs or graphic cards to mine coins while preventing powerful ASIC miners from mining those coins.
However, Scrypt ASIC miners have now entered the mass market and mining Litecoin with the GPUs and graphics cards is no longer profitable.
Moving on, Litecoin’s Scrypt hashing algorithm mines blocks in 2.5-minute intervals which results in a transaction time of about 2.5 minutes on average (as compared to Bitcoin's 10 minutes).
In Litecoin’s early days for every block mined, 50 LTC was rewarded to miners. This was the reward up until block number 840,000, then the reward was cut in half to 25 LTC for every block mined. The Litecoin block reward gets cut in half every 840,000 blocks, a process that occurs every four years. Since Litecoin’s block speed is roughly 2.5 minutes, around 576 blocks are generated per day.
Currently, Litecoin’s block reward is just 12.5 LTC per block and the next block reward halving is expected to occur in August 2023, where the reward will be halved to 6.25 LTC per block.
Overall, Litecoin’s hashing algorithm is more efficient and scalable than Bitcoin’s hashing algorithm which is why LTC transactions are faster and cheaper.
7. What is the Maximum Supply of Litecoins?
The maximum supply of Litecoin is 84,000,000 LTC (84 million LTC).
As of March 31, 2020, the total and circulating supply of Litecoin is 64,404,418 LTC. Therefore, 76.67% of Litecoin’s maximum supply has been mined and distributed and a total of 19,595,582 LTC are left to be mined.
8. How Fast is Litecoin Compared to Bitcoin and Ethereum?
- Litecoin (LTC) has an average transaction speed of 2.5 minutes and a maximum of 56 transactions per second.
- Bitcoin (BTC) has an average transaction speed of 10 minutes and a theoretical maximum of 27 transactions per second. However, Bitcoin currently averages 3-7 transactions per second.
- Ethereum (ETH) has an average transaction speed of 6 minutes and a current maximum of 15-20 transactions per second.
Litecoin overtakes both Bitcoin and Ethereum in terms of average transaction speed and the number of transactions per second.
9. Where to Store Litecoin?
Ledger Nano S hardware wallet
Litecoin (LTC) is one of the most well-established and successful cryptocurrencies of all time as it was created way back in 2011 and has remained in the top 10 ever since. Therefore, Litecoin is supported by many great cryptocurrency wallets for both mobile, web, and desktop.
Top 10 Wallets for Storing Litecoin (LTC)
- Ledger Nano S (hardware)
- Exodus (desktop)
- Freewallet (web, mobile)
- Jaxx Liberty (desktop, mobile)
- Atomic Wallet (desktop, mobile)
- Loaf Wallet (mobile)
- Electrum LTC (desktop)
- LiteAddress (paper)
- LiteVault (web)
- Litecoin Core (desktop)
All of the above-listed wallets are excellent options for storing LTC. However, the absolute best wallet for storing Litecoin (LTC) is the first listed wallet – Ledger Nano S.
10. Where to Buy Litecoin?
Litecoin (LTC) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade Litecoin is through cryptocurrency exchanges.
You can buy LTC with cryptocurrency or fiat at the following top exchanges. In most cases, you will have to fund your account with fiat, buy Bitcoin or Ethereum, and then use BTC or ETH to buy Litecoin (symbol LTC).
- Binance - BTC, ETH, USDT, BNB, BUSD, USDC, PAX, TUSD, EUR, GBP, USD
- Bitfinex - BTC, USDT, USD
- HitBTC - BTC, ETH, BCH, USDT
- OKEx - BTC, ETH, USDT, OKB, USDK, KRW
- Huobi Global - BTC, USDT, HUSD, HT
In addition to the exchanges listed above, Litecoin (LTC) is also traded on a wide array of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.
Hope you enjoyed that read :) Let me know if I have missed something in the comments.