What is Litecoin (LTC)? | Complete Guide
Litecoin (LTC) is a decentralized and peer-to-peer digital currency with low fees and instant transactions.
Litecoin is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Creation and transfer of coins are based on an open source cryptographic protocol and not managed by any central authority, just like Bitcoin.
The founder of Litecoin, Charlie Lee, once stated that the creation of Litecoin was because he wanted to make a coin that is the “silver to bitcoin’s gold” with a purpose of improving bitcoin’s weaknesses.
Litecoin is a Bitcoin fork with the following new implementations:
- lower block generation time
- more coins (84,000,000 LTC max supply)
- Scrypt hashing algorithm (vs. SHA-256)
- modified interface (GUI)
Litecoin, which was launched in 2011, didn’t have any ICO and since then, the currency has grown in status and is one of the top traded cryptocurrencies in the world. Just like Bitcoin (BTC), Litecoin (LTC) uses a Proof-of-Work (PoW) protocol and is therefore mineable.
Why Litecoin (LTC)
As a quicker and cheaper alternative to Bitcoin, Litecoin has been gaining widespread attention for micropayments, one of Bitcoin’s issues.
The #PayWithLitecoin campaign started by Charlie Lee and the Litecoin Foundation has seen the cryptocurrency getting adopted by airlines, cannabis dispensaries, and various online shops.
Its use for micropayments is achievable due to the low transaction fees on the Litecoin network, something that the Bitcoin network is not able to achieve. Although this issue may be short-lived as the second-layer scaling solution, the Lightning Network (LN), is already being tested and slowly deployed.
Even though cryptocurrencies have gotten a tainted name regarding using them to purchase goods and services, Litecoin has been able to strike partnerships that have seen it become an acceptable legal tender.
International money transfer
Due to its shorter block time, fast confirmations and fees that rarely exceeds a dollar, the LTC coin can be transferred quickly and cheaply to anyone that has a Litecoin wallet address anywhere in the world.
Store of value
As a cryptocurrency, Litecoin is used as a store of value. As the sixth largest cryptocurrency in the world, Litecoin has attracted a lot of big investors over the past few years. The currency has appreciated considerably in recent years versus popular currencies like USD, EUR, JPY, RMB.
Litecoin is a cryptocurrency that is deployed on its own blockchain. The cryptocurrency was developed by Charlie Lee and the Litecoin Foundation, which has been handling the cryptocurrency and its blockchain network since it was created 7 years ago.
Charlie Lee (Founder)
The founder of the Litecoin network is one of the most influential figures in the cryptocurrency world and has been so since he launched the network.
Lee is popularly first known during his time working with tech giant Google, working in projects like YouTube Mobile and Chrome OS. He came across Bitcoin in 2011 while still working with Google, and he went into the cryptocurrency world after then.
Before launching Litecoin, he was mining Bitcoin and also worked at Coinbase. His first cryptocurrency project was called Fairbix, a coin that modeled after both bitcoin and Tenebrix, though he later abandoned the coin due to a pre-mining issue and software bugs that left the coin susceptible to a 51% attack.
Type of coin: Litecoin (LTC) is a cryptocurrency
Platform: LTC coin was launched on the Litecoin blockchain and is a fork of Bitcoin.
Block time: approximately 2.5 minutes
Transactions per second: Litecoin currently can be able to process around 26 transactions per second. With Segwit, that number clocks in at about 56 transactions per second.
Technology (PoW): Litecoin makes use of scrypt Proof of Work (PoW) technology.
Privacy: confidential transactions (CT), a privacy-enhancing feature proposed by Bitcoin is being developed and will be implemented once ready.
Security: In terms of security, Litecoin is a very secure cryptocurrency due to the PoW that it uses.
Native wallet: Litecoin has a native wallet called Litecoin Core.
Recommended Litecoin Wallets
LitePay was designed to be a two-way processor which will enable both merchants and consumers to readily accept and pay with LTC coin the same way they do with fiat currencies. The processor would enable small businesses and independent vendors to offer Litecoin as a form of payment while also retaining their sales in their local fiat currencies.
LitePay was expected to be beneficial since it would increase merchants exposure and welcome in the growing community of cryptocurrency holders, while Litecoin enthusiasts and investors would have the chance to spend the cryptocurrency. However, insufficient liquidity and financing resulted in the suspension of the project.
LitePay debit card
The LitePay debit card system was the first part of the project to be suspended and was initially designed to allow Litecoin holders the ability to spend LTC anywhere that accepted debit.
The promising feature of LitePay was the ability to reconcile cryptocurrency buyers and sellers with those not looking to transact in crypto, and it is something that Litecoin and other cryptocurrency projects are working towards achieving.
If LitePay had been successful, it would have allowed for both Litecoin holders and non-LTC dependent merchants to interact in a transaction, and in the process, opening the doors for LTC to become a truly adopted cryptocurrency without total acceptance.
It is worthy to note that LitePay was not the first of its kind. BitPay designed for Bitcoin has been in existence since 2011 and already offers what LitePay was intending to offer. However, LitePay’s adoption would have been much more significant than that of BitPay due to the micropayment processing features of Litecoin.
The Litecoin Foundation and TokenPay announced a partnership to acquire a strategic stake in WEG Bank based in Germany.
By leveraging WEG Bank’s regulated status, the two companies look to bring cryptocurrencies to the mainstream. The roadmap includes a crypto-connected credit card and comprehensive banking solution.
Litecoin partnered with TenX, a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access, and more, with the company now working towards making it easier for people to use cryptocurrencies in the real world.
Merchant services and payment processing company Aliant Payments Systems partnered with Litecoin in April to make it Litecoin’s payment processor. The partnership will allow the Litecoin Foundation to provide an option for merchants that are looking for a vetted and approved payments processor.
In April this year, Charlie Lee announced that Litecoin has partnered with VPorn. This announcement came not long after another cryptocurrency, Verge, secured a partnership with Pornhub. VRPorn in its announcement mentioned that “VRPorn.com chose Litecoin as the first cryptocurrency we are accepting because it is a top-tier coin with unique benefits for the user.
How does Litecoin work?
Just like other cryptocurrencies, Litecoin isn’t issued by any government. The LTC coins are created by the elaborate procedure called mining, which consists of processing complex algorithms with powerful computers.
Every 2.5 minutes, the Litecoin network creates a block which is a ledger entry of recent litecoin transactions throughout the world (nodes).
The block produced is verified by mining software and made visible to any “miner” who wishes to see it. The moment a miner verifies a block, it enters the ledger where every litecoin transaction gets recorded (the Litecoin blockchain.
Litecoin miners are rewarded with LTC for verifying blocks, just like Bitcoin. The first miner to successfully verify a block receives 50 LTC. The number of LTC rewarded to miners reduces with time, halving every four years or so.
To make use of the Litecoin (LTC), you will have to buy it from cryptocurrency exchanges. As a very popular cryptocurrency, LTC is available on virtually all cryptocurrency exchange and can be purchased using fiat currencies.
Litecoin releases its roadmap periodically. In 2017, its quest was to activate SegWit, which they were able to achieve in May 2017.
SegWit Activation and Atomic Swaps
In May 2017, Litecoin activated Segregated Witness (aka SegWit), which is a blockchain scaling solution. SegWit is a process where witness signatures get separated from the transactions.
For every 1MB litecoin block, the block carries out a transaction and their witnesses every two and half minutes. With the SegWit activation, Litecoin was able to increase the volume of transactions getting verified every 2.5 minutes.
Since the return of Charlie Lee to Litecoin Foundation, he has been able to achieve many things including atomic swaps. On 20th September 2017, Litecoin and Decred (DCR) coin were ‘atomically’ swapped
An atomic swap is a process which involves a kind of on-chain barter exchange of cryptocurrencies, thus it allows the trustless exchange of two cryptocurrencies without the use of any intermediary exchange or an escrow.
MAST (privacy and smart contracts)
MAST is a technology that will protect the privacy of pooled transaction via a Merkle root.
MAST will also allow for the creation and execution of complex smart contracts using little to no space. The Litecoin protocol has built-in smart contract capabilities but it is currently not optimized for this application.
Litecoin, based on a fork of the bitcoin code, already allows for simple smart contracts like multi-signatures, where two parties need to sign off on a payment. However, the SegWit activation has opened the door for more complex script and would allow the network to deploy smart contracts.
Release date: “close to being released”, potentially released with the upcoming Litecoin Core update.
Lightning Network (LN)
Fast payments at low costs
The Lightning Network (LN), currently being developed by the Bitcoin Core devs and partners (Blockstream), will allow for instant transactions and very low fees.
Atomic swaps will be realized through the LN. It will allow for cross-chain exchanges without a third party.
Release date: the product is in beta test and will likely only be deployed at full scale in a few years.
Confidential Transactions (CT)
This technology will bring some of the best Moneros (XMR) privacy features to Litecoin (LTC).
Litecoin (LTC) Resources
- LTC Whitepaper (Litecoin borrows Bitcoin’s whitepaper unofficially)
- LTC Roadmap (unofficial)
- LTC Blog
- LTC Website
Where to purchase Litecoin (LTC)
Litecoin is a widely recognized cryptocurrency and is available nearly at any exchange that sells bitcoin. You can buy Litecoin either directly with your local currency or use other cryptocurrencies.
Buy LTC with USD, EUR, CAD and more
Visit any of the following websites to exchange your local currency for Litecoin (LTC):
- CEX.IO (global)
- Coinbase (USA, Canada, Europe)
- BitPanda (Europe)
- LocalBitcoins (global)
- QuadrigaCX (Canada, USA)