Litecoin is one of the living proofs that even an older generation of altcoin can still co-exist and stay relevant in the sea of tight crypto competition. Litecoin was launched in 2011, so by definition; it was among the first generation of altcoins. However, it remains relevant until today, and it’s still one of the top altcoins by market cap in the crypto rankings.
How is Litecoin able to do this? Let’s find out together with this article.
Brief Summary – Litecoin
The founder of Litecoin was Charlie Lee, who was also an employee at both Coinbase and Google. Charlie Lee has been a huge believer in Bitcoin, and he came up with an idea to create a “lite version” of Bitcoin. At first, he spoke his mind about this idea at BitcoinTalk forum, and eventually, he released an open-source client on Github in October 2011.
In the same month, specifically on October 13th, 2011, the Litecoin network finally came online, and it has become an instant hit among the crypto community. Litecoin code was actually forked from the Bitcoin Core client although Charlie Lee decided to add four key differences which are:
- Different maximum coin supply (84 millions of LTC compared to 21 millions of BTC)
- Different hashing algo (LTC uses Scrypt and not SHA-256)
- Different Graphical User Interface
- A significantly decreased block generation time (LTC has a 2.5 minutes block generation time while Bitcoin has a 10 minutes block generation time)
Thanks to these differences, especially regarding block generation time, LTC successfully became one of the fast and cheap altcoins. For many years (even until today) many people still use LTC to move money from exchange to exchange or from and to different countries.
Charlie Lee himself has said that Litecoin is basically a silver to Bitcoin’s gold, and he doesn’t want the two coins to compete against each other. He believes both Bitcoin and Litecoin can co-exist and supplement each other, just like how precious metals (gold and silver can co-exist as well.
In the development progress of Litecoin, there have been multiple considered proposals to improve the code of Litecoin – such as Beam’s mimblewimble privacy protocol and second-layer solutions.
Technological Features Of Litecoin
At its core, Litecoin is (more or less) similar to Bitcoin. Both of them use the Proof of Work (PoW) mining algorithm and both of them also serve as a store of value. However, as mentioned earlier, Litecoin is still different from Bitcoin after Charlie Lee added those four fundamental differences.
One of the biggest differences is the significantly decreased block generation time. On Litecoin, it’s only 2.5 minutes, which is much faster than Bitcoin. In the overall perspective, the difference in the block generation time has helped Litecoin tremendously to achieve much better speed than Bitcoin. Approximately, Litecoin is able to achieve 56 transactions per second (TPS) compared to Bitcoin’s 5-7 TPS.
Another big difference is the script algorithm. Litecoin uses what they call Scrypt while Bitcoin uses SHA-256. Well, Scrypt was implemented by the LTC team to avoid ASICs or Application-Specific Integrated Circuits from mining the network.
You see, miners in crypto usually have three different options : ASIC, GPU, and CPU. However, many people in the crypto community believe that ASICs have taken away the power and influence of individuals in the mining sector because ASIC miners have better computational powers.
That being said, as time has gone on, the narrative of being “ASIC-resistance” has changed. Nowadays, ASIC miners are actually able to mine Litecoin due to its technological advancements.
Controversies And The Future Of LTC
It’s always interesting to learn more about Litecoin and its founder, Charlie Lee. Perhaps the biggest controversy related to Litecoin was when Charlie Lee decided to sell all of his Litecoin holdings back in December 2017. This controversy became much bigger because December 2017 was considered the best month ever for cryptocurrency. As we all know, the crypto market crashed for the whole year of 2018.
Some people questioned Charlie Lee’s decision to sell his own LTCs. They believe that there’s no point in developing for LTC if the founder himself does not have faith in its future growth. However, Charlie Lee (and many LTC supporters) defended his decision. Charlie stated that he sold the coin only because he did not want to have any conflict of interest. It had nothing to do with believing in the coin’s future or not.
Talking about the future of LTC itself has always been interesting. It looks like LTC will stay relevant as long as Bitcoin can be relevant. There is no specific use case of LTC that is different from BTC. Both of them are used for cross-border transactions, and both of them can be used as a store of value (LTC is like silver and BTC is like gold).
LTC is one of the top-ranked altcoins by market cap, and impressively, they are one of the old-timers (from 2011). Most other altcoins from 2011-2013 are not able to compete with the newer coins, but LTC remains relevant even until today. It’s a remarkable achievement.
That being said, the competition will become tougher in the future. It’s interesting to see the future of LTC when there are more altcoins with bigger use cases trying to steal its spot in the top 10 crypto rankings.