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Litecoin is a type of cryptocurrency that was created by Charlie Lee in 2011 after a “fork” was discovered in the Bitcoin blockchain. It started when a few developers felt that Bitcoin’s network was too centrally controlled.
They were also dissatisfied with large mining companies hoarding transactions (using conflicting encryption methods) from individual miners. Naturally, it took some time for Litecoin to fend off competitive mining companies, but it has since become known for championing individual miners and faster processing times.
Litecoin (LTC) is one of the earliest "altcoins," or alternative versions of Bitcoin, that rose to prominence. Compared to Bitcoin, it was designed to be cheaper to use and have faster transaction confirmations, a big deal for both customers and merchants since crypto is becoming more widely accepted as a form of currency.
Although LTC has a total circulation of 84 million coins, the Litecoin supply is designed to decrease over time to help preserve its value. As of 2022, there was an estimated 14 million Litecoins left to mine.1
Litecoin is a virtual currency that operates on a peer-to-peer network, which means it’s not controlled by any central authority. This lets people all over the world conduct fast, low-cost transactions with Litecoin. Like other cryptocurrencies, Litecoin uses the proof-of-work (PoW) to ensure network security but is different from Bitcoin in that it uses the Scrypt algorithm while Bitcoin uses the SHA-256 algorithm.
An advantage of Litecoin’s blockchain is that it can facilitate fast transactions that make it easier for retailers to accept LTC as payment. It takes the LTC network under 3 minutes to process transactions before adding them to the blockchain.
Litecoin is mined with the help of Scrypt, a hash algorithm that requires miners to have certain hardware and software. Similar to Bitcoin, Litecoin mining relies on the PoW using computers to solve the nonce, a part of the hash, that helps secure the block. After a nonce is solved, Litecoin is rewarded.
Litecoin “halving” means cutting the number of awards given by one-half after a block’s hash and transaction information is verified and an entirely new block is created. Halving’s main purpose is to limit the creation of new coins.
Litecoin has four times the supply limit of Bitcoin’s 21 million, making it far less scarce than Bitcoin. The total number of Litecoins that can ever exist is 84 million. For perspective, there are over 12 billion $1 bills in circulation today.
So, if Litecoin is an “altcoin” or alternative to Bitcoin, what are the major differences between Litecoin and Bitcoin? Below are some of the aspects that differ between the two cryptocurrencies.
LTC can be purchased through most cryptocurrency exchanges or via LTC-based wallets. Litecoin can also be purchased and sold through payments apps like PayPal. After purchasing, it's important to store crypto in a secure wallet, like the paper, hardware, or desktop/mobile options, for example.
Before making a decision or purchasing cryptocurrency, be sure to review any associated risks and learn about cryptocurrency and its volatile value.
Litecoin can be used with apps, exchanges, and stores that accept it. Some may accept it for use in peer-to-peer payments or purchases for things like plane tickets, coffee, clothes, and pet supplies. It’s also common for people to trade their LTC.
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