What is Litecoin?
Litecoin is an open-source software project launched in 2011, very shortly after Bitcoin. Just like other currencies of the same concept, operations are not controlled by any central authority. However, users quickly uncovered some of Bitcoin’s drawbacks, which needed to be addressed. The founder is Charlie Lee, who is a former Google engineer. Charlie Lee’s main idea was to develop a ‘Light version of Bitcoin’, which would work much faster and with a minimum fee. The blockchain has a limited total supply of 84,000,000 LTC. The current circulating supply is close to 70,000,000.
Consensus in the Litecoin network is achieved through the Proof-of-Work (PoW) algorithm, not much different than its predecessor. But some things were designed differently. Confirmation of completed transactions in this network is carried out using the Scrypt algorithm. Scrypt is a hashing algorithm, more well-known as SHA-256. It was introduced to keep CPUs and GPUs competitive because it is ASIC-resistance. But since then, Scrypt-capable ASICs have been developed, bypassing the initial imitations. Now, anyone can mine LTC.
The Litecoin blockchain was one of the first to have adopted SegWit. This process removes signature data from transactions, thus increasing their speed. With more space freed up, the capacity of the blockchain expands, and it manages to add more transactions to the chain within the same amount of time.
For the first six years on the market, the Litecoin price did not go past 10 USD. Then, during the “crypto boom of 2017”, its popularity and value started rapidly increasing. The coin finishes 2021 with a market cap of over 10 billion USD.
How Is the Litecoin Network Secured?
As with all PoW cryptocurrencies, the Litecoin core is secured by miners. They participate in the block validation process and make transactions secure. According to the founder, users don’t have to worry about 51% attacks because:
- Pools are well-distributed (largest 22%)
- Hashrate up 50x within a year
- High capital costs to attack ($322-761MM + ~$38-50k/hr)
The strength of Litecoin is its reliability and wide recognition in the crypto community. And despite such popularity, there haven’t been any major attacks. The network boasts a decentralized pool of participants. Taking into account the efforts of Litecoin developers, LTC is unlikely to suffer from these types of malicious network attacks.
What Makes Litecoin Unique?
Here are a few characteristics that make Litecoin widely popular:
- Strong persona behind the brand – While some founders choose to stay anonymous, Charlie Lee personifies the project and reassures that it can be taken seriously. He is active on Twitter, and users can always rely on the freshest news on his feed.
- High transaction speed – One confirmation takes 2.5 seconds, sometimes even less. This is a very impressive result compared to other major coins. Being four times faster than Bitcoin, a new block mined every 2.5 minutes, generating a reward of 12.5 litecoins for mining activity.
- Good entry point for beginners – Some people are apprehensive about Bitcoin due to price and, sometimes, security concerns. Litecoin is much more accessible not only from a psychological point of view but also in terms of the initial investment. This is a great option for anyone looking to get familiar with crypto activities.
- Not a competitor but a complement - Litecoin was never meant to replace Bitcoin. It was built to be a more practical and scalable medium of exchange. So, the Bitcoin-Litecoin link only strengthens both projects.
- Active community – The Litecoin community is very active, eager to discuss the upcoming developments and give advice to all members. The founder is personally involved in some of the discussions, providing a first-person, insider view on some of the issues.