The crypto-currency Litecoin (LTC) is a fork of Bitcoin. It is a decentralized payment system, which was started on October 7, 2011 by Charlie Lee, a former Google and Coinbase employee. Litecoin is often referred to as Bitcoin’s little brother for many reasons.
What is Litecoin?
Litecoin (LTC) is an alternative cryptocurrency to Bitcoin (BTC) created on October 7, 2011 by Charlie Lee, who was a developer for Google at the time. Litecoin’s source code is a software fork of Bitcoin’s source code, hence it is referred to as a Bitcoin fork, even though they do not share the same history.
Litecoin is often referred to as digital money (metal), in the same way that Bitcoin is considered digital gold (“the silver to bitcoin’s gold”). This is because Litecoin is 4 times less scarce than Bitcoin: the amount of LTC in circulation is indeed limited to 84 million units, unlike Bitcoin which is limited to 21 million units.
While most of Litecoin’s operation is modeled after Bitcoin. Litecoin is proof-of-work based and newly generated LTCs are distributed to miners as a reward for their participation in securing the distributed ledger, which is a blockchain. As with Bitcoin, the issuance of new LTCs is scheduled to undergo a halving every 4 years: from 50 LTCs per mined block at its launch, this was reduced to 25 LTCs in August 2015 and then to 12.5 LTCs in August 2019.
However, there are some differences between Litecoin and Bitcoin.
The time for the production of a block of Litecoin is 2 minutes and 30 seconds, compared to 10 minutes for Bitcoin, which is 4 times faster, so the maximum number of LTC will be 84 million.
The proof-of-work algorithm is based on the scrypt (or S-Crypt) function, a memory-intensive key derivation function to discourage the development of specialized integrated circuits (ASICs) and to favor mining by graphics processing units (GPUs) that are accessible to the general public. Nevertheless, ASICs were still developed and LTC mining is no longer profitable for miners using graphics cards.
A less conservative vision: major evolutions are envisaged in the protocol such as the addition of privacy with MimbleWimble.
Passé et avenir du Litecoin
Litecoin was born in October 2011, thanks to the initiative of Charlie Lee, a developer at Google. The genesis block was built on October 7 and contained (on the same model as Bitcoin’s genesis block) the title of a New York Times article from the 5th announcing the death of Steve Jobs. Charlie Lee announced Litecoin on the Bitcointalk forum on October 9, presenting it as “a lighter version of Bitcoin. The network was launched on the night of October 12-13.
Charlie Lee, the creator of Litecoin
Litecoin was based on the scrypt mining algorithm, which was used in the Tenebrix cryptocurrency launched in September of the same year by ArtForz and Lolcust. This algorithm was initially intended to oppose GPU, FGPA and ASIC mining and favor CPU mining.
Litecoin was not pre-allocated and all Litecoins were mined naturally. Nevertheless, the mining did not go well at first: due to a bug in the difficulty adjustment algorithm, more than 500,000 LTC were generated in the first 24 hours instead of 28,800, 17.5 times faster than expected. This rapid mining was compensated for by the fact that the 500,000 LTCs in question now represent only 0.8% of the money supply.
Litecoin experienced its first speculative craze in late 2013 during which its price rose from $2.50 to $50 in a matter of days. After the bubble burst, Litecoin, like Bitcoin, experienced a long period of stagnation.
In 2017, Litecoin benefited from the renewed interest in cryptocurrencies. In April, Charlie Lee and a few others created the Litecoin Foundation, which aimed to fund the IT development and adoption of Litecoin.
On May 10, 2017, the SegWit upgrade was activated on Litecoin, 3 months before Bitcoin. One of the purposes of this upgrade was to facilitate the implementation of the Lightning network. Two hours later on the same day, the first payment channel was opened by Christian Decker of Blockstream between two Lightning nodes located in San Franciso and Zurich respectively. Several transactions were carried out, including a payment of 1 litoshi (0.00000001 LTC) with no fees.
On December 20, 2017, Charlie Lee announced that he had sold some of his CTAs and given away the rest during the previous days. It turns out that he had sold at the top of the bubble, which he was later blamed for.
The early integration of SegWit and Lightning has led many to refer to Litecoin as a “test network for Bitcoin. However, while this may have been true in the past, today all indications are that Litecoin will move away from Bitcoin in a less conservative evolution.
On October 20, 2019, the Litecoin Foundation thus proposed to integrate MimbleWimble, a process to add better transaction privacy to the protocol and thereby improve the fungibility of Litecoin. This process would be added in the form of a soft fork via extension blocks, hence the name of the proposal: MWEB or MimbleWimble via Extension Blocks. The integration of MimbleWimble is in the development phase and a dedicated test network was set up in early October 2020.
Litecoin Team and Partners
The Litecoin Team
Because the Litecoin project is open source, the people working on its development are not easily identifiable and quantifiable. However, since the project is carried by the Litecoin Foundation, some of its most prominent members are known.
The Litecoin Foundation’s Board of Directors include:
- Charlie Lee: creator of Litecoin and co-director of the Foundation. Former software engineer at Coinbase and Google;
- Xinxi Wang: Co-creator and co-director of the Litecoin Foundation, he is also the CEO of COINUT, a Singapore-based exchange;
- Alan Austin: Co-Director of the Foundation. Over 20 years of experience in entrepreneurship and investment;
- Zing Yang: Co-director of the Foundation, she is also a member of several think tanks and think tanks.
From left to right: Charlie Lee, Xinxi Wang, Alan Austin, Zing Yang
The Litecoin Foundation is also funding 2 developers working full time on the project:
- Adrian Gallagher: developer of Litecoin Core since July 2017. He is also the CEO of THRASHER Corporation.
- Loshan T.: Litecoin Core developer since 2013, he is also the creator of Litewallet.
Litecoin’s partners
Litecoin is one of the most widely collaborated projects in the world. From the video game industry, to the film industry, to payment processors, to financial product providers, to ATMs, to cashback systems, to sports organizations, Litecoin has made its way into most industries that can be related to cryptocurrencies in some way.
Here’s a list of major partnerships for Litecoin. Some incorporate only the Litecoin Foundation, but are often related to the cryptocurrency:
- Atari, the legendary video game company. The LTC can be used to purchase the Atari VCS, a PC/console hybrid from the manufacturer;
- AMC, the world’s largest movie theater chain, accepts payments in LTC;
- NordVPN, the famous virtual private network provider accepts LTC payments;
- Nefarious, the Litecoin Foundation is sponsoring this e-sports team through its Litecoin Gaming entity;
- MeconCash, a company that makes LTC available after 13,000 ATMs in South Korea;
- Cred, a platform that offers 10% annual interest to its users who hold LTC ;
- BlockFi, a platform for borrowing and lending cryptocurrencies, which incorporates LTC into its products;
- Bitgo, a custodial service where the Litecoin Foundation’s funds are stored;
- BitcoinRewards, a service that pays cashback in LTC and BTC on online purchases;
- The Miami Dolphins, a professional American soccer team;
- The San Diego International Film Festival, where tickets can be purchased in LTC ;
Litecoin’s strengths and weaknesses
Just like other cryptocurrencies, Litecoin has its own strengths as well as weaknesses.
The advantages that make Litecoin a high-value cryptocurrency include:
- Litecoin is one of the first alternative cryptocurrencies (“altcoin”), which gives it a major place in the history of cryptocurrencies ;
- Litecoin therefore has a significant network effect: many wallets, exchange platforms, payment processors, merchants and other services accept LTC ;
- Litecoin’s security is very reliable, in the sense that its code and proof-of-work consensus model have been around for almost a decade;
- Litecoin is more likely to be used for everyday transactions, as its transactional capacity is now four times that of Bitcoin;
- Litecoin’s development, while not as conservative as Bitcoin, is quite slow and thorough: this makes LTC a safe and stable security, like silver metal in the real world, which is why Litecoin has occupied the top 10 cryptocurrency market capitalizations for years.
However, Litecoin is not perfect and has some notable drawbacks:
- Being very close to Bitcoin, Litecoin sometimes has a hard time distinguishing itself from its big brother in the eyes of users and investors;
- Its development is, as said, quite slow, which makes it technically lag behind other less conservative cryptocurrencies like Bitcoin Cash, Monero, Dash or Zcash ;
- Litecoin has a transactional capacity below some other cryptocurrency systems, especially those based on a proof-of-stake model;
- Some criticize Litecoin for relying too much on the personality of its creator, Charlie Lee, who has some say in governance decisions.
How to buy Litecoin (LTC)?
You can buy Litecoin on the vast majority of cryptocurrency exchange platforms. The platform with the most volume traded and the lowest fees is Binance. So the easiest way is to buy LTC directly on Binance against euros.The reference platform to buy and trade over 600 cryptos10% off your fees with the code SVULQ98B 🔥Discover LTC on Binance
Investing in crypto-currencies is risky (read more)
Explanations for buying LTC on Binance
- Register with Binance;
- You will receive an email and will have to click on a link to verify your account;
- Deposit funds on the platform;
- Click on the Market menu and search for the LTC/USDT pair;
- All you have to do is buy LTC for the amount of your choice;
- Congratulations 🎉 You are now in possession of LTC tokens!
👉 Find our detailed guide to Monero
Litecoin (LTC) Ratings and Reviews
Considered Bitcoin’s little brother, Litecoin has established itself as a staple of the crypto ecosystem in just a few years. Led by the iconic Charlie Lee, the community formed around Litecoin is one of the most active in the industry, sparing no effort to get the cryptocurrency adopted.
Coming into existence at the end of 2011, Litecoin saw the beginnings of the cryptocurrency industry alongside Bitcoin. As one of the oldest crypto currencies still in operation to this day, LTC is definitely a part of the crypto landscape and that’s not likely to change.
With its faster and cheaper transactions than Bitcoin, Litecoin is massively used by the crypto-community around the world.
However, the shadow of Bitcoin is likely to follow it forever. Operating in much the same way, Litecoin will have to quickly renew itself and innovate if it wants to finally stand out from its big brother.
Moreover, there are many blockchains and cryptocurrencies today offering even higher performance than Litecoin. The competition is therefore quite tough, but Litecoin should without problems gather more and more followers thanks to its privileged position.