What is Litecoin? | CryptoWallet.com

What is Litecoin?

Litecoin has been described as the “silver to Bitcoin’s gold” and was designed as a lighter and faster Bitcoin alternative. It is one of the most closely correlated crypto tokens to Bitcoin as spikes and crashes in Bitcoin are often mirrored by Litecoin (at much lower values).

Litecoin is an open-source cryptocurrency whose code is forked from Bitcoin’s source code. The native cryptocurrency token is called Litecoin (LTC). The creator, Charlie Lee, designed the system to tackle some of the issues Bitcoin is facing. 

Bitcoin has become quite congested with transactions taking a long time to clear and transaction costs reaching as high as $62 for a single transaction. This has made it extremely costly to conduct small transactions or purchase goods online. 

Charlie Lee designed Litecoin as a token that can be used for smaller transactions at an acceptable cost. He sees Litecoin as a complement to Bitcoin rather than a competitor.

Litecoin uses a Proof-of-Work consensus algorithm and new LTC tokens are mined by nodes who verify and add new blocks to the blockchain. 

Litecoin was initially developed to make token mining more accessible to everyday users. With Bitcoin, mining has become so complex and resource intensive that mining is primarily done by organizations with specialized hardware (ASIC mining rigs). 

Litecoin employs a scrypt hash function that originally prevented the use of these rigs however this has been circumvented and mining has become harder for everyday users to take part in today.

Litecoin has a maximum supply of 84 million and blocks are mined every 2.5 minutes. In comparison, Bitcoin has a max supply of 21 million and a block time of 10 minutes. This allows Litecoin to be a lightweight alternative for small crypto transactions.