Litecoin Quick overview

Introduction

Introduced as the “silver” to Bitcoin´s “gold” (don´t get confused with BCG - the "gold" in this case is just a likening to precious metals in the world of cryptocurrencies, and "gold" definitely means the original Bitcoin BTC). Litecoin began as a hardfork of Bitcoin. It was released as an open-source code on Github in October 2011 by Charlie Lee, a former Google employee. Right from the start, Litecoin had a different approach to block sizes and their generation speed (2.5 minutes), therefore achieving faster transaction confirmation times compared to Bitcoin.

Another major difference of Litecoin compared to Bitcoin is the use of scrypt as its proof of work algorithm. Litecoin’s scrypt hashing algorithm is memory-demanding, which encouraged GPU mining. It was an attempt to resist the development of application specific integrated circuits (ASICs) which dominated Bitcoin mining in 2013 and exponentially increased its mining difficulty. However, first ASIC miners for Litecoin’s scrypt were introduced in 2014.

The main advantage of Litecoin seems to be its agile development. Although Litecoin is among the TOP 5 cryptocurrencies in terms of market capitalization, there’s less politics involved and less conservatism needed. Therefore Litecoin was the first of the TOP5 cryptos to activate the Segregated Witness (SegWit) protocol, already in May 2017.

The team behind Litecoin has been showing dedication since Litecoin’s introduction in 2011. Much of the 2017 Roadmap has been implemented, including the SegWit adoption and creation of the Litecoin Foundation which spearheads and organizes the development of the Litecoin cryptocurrency.

Influencers

Charlie Lee https://twitter.com/SatoshiLite

Also known as coblee, the creator and main proponent of Litecoin. Charlie has a broad love for cryptocurrencies in general, and seems to be doing anything in his power to keep them growing. Former Google employee, and ex-Director of Engineering at Coinbase, Charlie is now the managing director of the Litecoin Foundation.

Technology

Litecoin is a decentralized currency with quick transaction times and close-to-zero transaction costs. Its total mineable amount is 84 million, which is 4X times the number of bitcoins. This makes Litecoin the “silver” currency, suitable for everyday smaller transactions.

Lightning Network

Litecoin’s development team have always been progressive and they have been working closely with the developers of the Lightning Network. It’s very likely that Litecoin will be among the first crypto coins to adopt this feature.

Lighting network enables super fast payments with exceptionally low transaction costs by bundling and settling transactions off-blockchain and therefore removing the need to wait for confirmation. The security of these transactions is enforced by smart-contract-like rules. The developers boast millions to billions of transactions per second possible.

Advantages

• Quick block creation (2.5 minutes) and transaction times
• Ability to process 8X more transactions than Bitcoin in a 10-minute window
• Good liquidity and stable market price
• Somewhat ASIC-mining resistant due to the Scrypt algorithm
• Great community with high consensus for changes

Disadvantages

• Entirely based on BTC
• Lags behind Bitcoin core and runs on obsolete code
• In the shadow of BTC and doesn’t offer that much novelty
• Could be knocked-over by modern altcoins

Real examples of use

First and foremost, Litecoin is a currency. It’s supposed to be used for buying and selling things on an everyday basis, enabling microtransactions, etc. There are numerous ATMs with Litecoin integrated around the world. Travel agent BTCTrip offers airplane tickets for LTC, plenty of smaller merchants and businesses that integrate GoCoin payment processing method. Many businesses that accept BTC add also LTC as a payment method nowadays - because of the lower fees and faster transactions it´s good especially for microtransactions.

Technical Analysis

A major difference of Litecoin compared to Bitcoin is the use of scrypt as its proof of work algorithm. Litecoin’s scrypt hashing algorithm is memory-demanding, which encouraged GPU mining. It was an attempt to resist the development of application specific integrated circuits (ASICs) which dominated Bitcoin mining in 2013 and exponentially increased its mining difficulty. However, first ASIC miners for Litecoin’s scrypt were introduced in 2014.

Fundamental Analysis

The main advantage of Litecoin seems to be its agile development. Although Litecoin is among the TOP 5 cryptocurrencies in terms of market capitalization, there’s less politics involved and less conservatism needed. Therefore Litecoin was the first of the TOP5 cryptos to activate the Segregated Witness (SegWit) protocol, already in May 2017.

The team behind Litecoin has been showing dedication since Litecoin’s introduction in 2011. Much of the 2019 Roadmap has been implemented, including the SegWit adoption and creation of the Litecoin Foundation which spearheads and organizes the development of the Litecoin cryptocurrency.

Conclusion

Litecoin was created as a complementary currency to Bitcoin. “Silver to Bitcoin’s gold, if you will,” in the word of its creator Charlie Lee. It was created for the purpose of being used for everyday transactions, i.e. buy houses with Bitcoin, use Litecoin for everyday grocery shopping. Litecoin was developed to enjoy faster transaction and confirmation times. The development of LTC remains consistent with the early vision.

Litecoin is seen by many as the little brother of Bitcoin and destined to remain in its shadow. However, it has stood the test of time among altcoins and sports a better hashing algorithm. The community of Litecoin is more utility-focused therefore making progressive changes possible. Charlie Lee remains a stout advertiser of cryptocurrencies and views Litecoin as the necessary diversity element that will keep the cryptocurrency strong together with Bitcoin and other coins.

Roadmap

The Litecoin Core is looking to implement Schnorr signatures for better security, confidential transactions and further continue researching the scalability of the blockchain-based technology. They are also working on making the development more stable by hiring full-time developers and providing the necessary infrastructure for them. Work on the Android version of Litecoin wallet Loaf, and websites continues in order to expand Litecoin’s user base.