When people hear the word, cryptocurrency, most likely they immediately think of Bitcoin. But what if I told you that there is a coin just as old that may have just paved the way for other alt-coins? Litecoin is one of the most recognizable alt-coins in the crypto space, and it was made in efforts to improve some of the blind spots that Bitcoin had in its time, including faster block generation and cheaper commissions.
Litecoin is truly an interesting project, so if you want to know more, dive into the episode and learn everything you need to know about one of the oldest cryptocurrencies!
What Is Litecoin?
Litecoin wasn’t the first cryptocurrency to replicate Bitcoin’s code and tweak its functionality; however, it is one of the most strategically relevant, having built a strong market over time despite accusations that it has a clear value proposition.
From 2011, Charlie Lee, a computer scientist and alumnus of the Massachusetts Institute of Technology has been strongly affiliated with Litecoin.
Litecoin’s technology would first distinguish itself by lowering the time it takes to add new blocks of transactions to its blockchain.
The idea was that this would appeal to retailers, who were previously required to wait for six confirmations (which take about an hour) before accepting Bitcoin payments as finalized.
As merchant enthusiasm in cryptocurrencies waned in the mid-2010s, Litecoin took a more assertive design approach, inventing cutting-edge technology like the Lightning Network and Segregated Witness, which are now available on Bitcoin.
Instead of inciting network rivalry, the market has mainly regarded these initiatives as consistent with Litecoin’s objectives. The initiative has always been presented as a supplement to Bitcoin, unlike many other cryptocurrencies.
How Litecoin Works
Litecoin is a fork of the Bitcoin code that shares many similarities with Bitcoin. So, if you know how Bitcoin works, you’ll probably find Litecoin to be relatively simple to grasp.
Litecoin, or LTC, is a crypto that uses cryptography to allow ownership and exchange. Its software sets a hard limit of 84 million LTC that can ever be generated.
Litecoin, like Bitcoin, employs proof-of-work mining to allow anybody with dedicated computing resources to contribute new blocks to the blockchain and earn new Litecoin.
Litecoin differs from Bitcoin in two ways: it seeks to complete transactions faster, and it has a different mining algorithm. Every 2.5 minutes, new blocks are added to the Litecoin network.
The initial intention of Litecoin’s mining algorithm was to reduce the efficacy of specialist mining equipment, although this was ultimately ineffective. Litecoin can still be mined with hobbyist equipment today, though the market is saturated by large-scale miners.
Since then, Litecoin has proven to be a good testing ground for new cryptocurrency features.
Segregated Witness, a mechanism that allows cryptos to include more transactions into each block, was introduced by Litecoin in 2017.
Later that year, the first Lightning transaction was performed on Litecoin, demonstrating how a layered network design may be used.