Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Like Bitcoin, Litecoin exists as a blockchain where participating nodes process transactions, and miners provide security and verification for each of those transactions.
Litecoin was designed to pump out 84 million coins, which is four times as many coins as Bitcoin, in an effort to keep the digital currency from becoming scarce and too expensive. It processes transactions more quickly, and discourages the kind of high-volume but very small transactions seen on the Bitcoin network. And it lets regular folks more easily "mine" coins – i.e. provide the online currency system with the computing power it needs, in exchange for digital money.
Litecoin can be used in most applications that accept Bitcoin or other crypto-currencies, and is currently accepted in 23 market exchanges, the largest of which is BTC-E. It is possible to Buy Litecoin either via credit cards or via the Litecoin Paypal application, for use in BTC/LTC trading, LTC/USD and LTC/EUR trading, as well as payment method with the many corporations, businesses, NGO’s, websites and applications.
Who’s the founder?
Litecoin was originally conceived and developed by Charlie Lee in 2011. The motivation behind its creation was to improve upon Bitcoin. The key difference for end-users being the 2.5 minute time to generate a block, as opposed to Bitcoin’s 10 minutes. Charles Lee now works for Coinbase, one of the most popular online Bitcoin wallets.
Since its launch in 2011, which is over two-and-a-half years after Bitcoin, Litecoin has seen steady adoption with an active community of traders, merchants, and developers. The number of Litecoins in circulation has grown steadily to over 20 million. Since the trajectory has been consistently upward since its introduction, it can be reasonably assumed that Litecoin will continue to occupy a strong position in the top of the cryptocurrency industry.
Litecoin vs. Bitcoin.
The Litecoin blockchain is capable of handling higher transaction volume than Bitcoin. Due to more frequent block generation, the network supports more transactions without a need to modify the software in the future. As a result, merchants get faster confirmation times, while still having ability to wait for more confirmations when selling bigger ticket items.
For miners and enthusiasts though, Litecoin holds a much more important difference to Bitcoin, and that is its different proof of work algorithm. Bitcoin makes use of the longstanding SHA-256 algorithm, whereas Litecoin makes use of a comparatively new algorithm known as Scrypt. SHA-256 is generally considered to be a more complex algorithm than Scrypt, while at the same time allowing a greater degree of parallel processing.
The original intended purpose of using Scrypt was to allow miners to mine both Bitcoin and Litecoin at the same time. The choice to use Scrypt was also partially to avoid giving advantage to video card (GPU), FPGA and ASIC miners over CPU miners; although Charlie Lee has never publicly agreed with this opinion.
Litecoin’s Wallet Encryption.
Wallet encryption allows you to secure your wallet, so that you can view transactions and your account balance, but are required to enter your password before spending litecoins. This provides protection from wallet-stealing viruses and Trojans as well as a sanity check before sending payments.
Litecoin wallets.
Here are the most popular wallets for Litecoin:
Block.io.
The Block.io service provides multisignature wallet solutions to Litecoin users all over the world. Sending a transaction requires two signatures or more, one from the individual user and one from the company itself.
LoafWallet.
Mobile users looking for a Litecoin wallet may want to give LoafWallet a chance. That is, assuming they use the iOS operating system, as it does not appear to have an Android counterpart as of right now.
Exodus (Offline Desktop Application).
Exodus is a user-friendly and versatile multi-currency wallet. Best feature of the Exodus wallet is the built-in exchange facility is quite nifty.
LiteVault
LiteVault is an online wallet website which uses in-browser cryptography to minimize the risk of the coin holder running with funds.
Litecoin exchanges.
Litecoins can be purchased on an exchange, which is a virtual marketplace where buyers and sellers of the cryptocurrency meet together. You can purchase Litecoin for dollars, euros or cryptocurrencies such as Bitcoins. Popular exchanges are Yobit, Okcoin, Poloniex, Gdax, Chbtc, Btc-e, Bitfinex, etc.
History of Litecoin.
Fairbrix.
Litecoin was born out of the ashes of failure – or, more specifically, the ashes of Charlie Lee’s first creation, Fairbrix. A clone coin (and a fork of Tenebrix), Fairbrix was plagued with problems that led to its swift downfall. A premine period put seven million coins in the hands of a developer before launch; a software bug saw the genesis block fail to mint coins. Fairbrix left the cryptocurrency community clamoring for a Bitcoin substitute that could be mined by the average Joe.
Launch.
Litecoin was Charlie Lee’s next attempt at an altcoin, and it was launched in 2011 combining code from the bitcoin client to eliminate the bug that helped to kill Fairbrix. It incorporated the Scrypt proof of work from Tenebrix, designed to make mining more democratic.
One big boost for Litecoin was support from Mt. Gox, a reputable altcoin exchange. In June 2013, the exchange promised that it would explore Litecoin adoption.
In 2013, Litecoin was mentioned by the Economist as an alternative to Bitcoin, and it notably shot up in price. During Nov. 2013, the total value of Litecoin increased dramatically and included a 100% leap in less than 24 Hrs. Worth seven cents on January 1, 2013, its value increased along with Bitcoin's, reaching $23 by December, or 328 times its initial value. That means a $100 investment in 2013 would be worth $30,000 in 2014.
In April year 2014, another version of Litecoin was also launched, which was version 0.8.7.1, and it amended some few errors and also included a fix that relates to Heartbleed security bug.
SegWit activation.
In May 2017, Litecoin activated a scaling solution called SegWit. SegWit activation involves increasing the block size of the crypto currency slightly and transferring non-essential data off the blockchain. SegWit eliminates the risk of a third party altering a transaction before it's been confirmed. SegWit also enables "Lightning Networks" - instant Litecoin payments, something that has never been possible for any major cryptocurrency.
Following the activation, Coinbase, the largest cryptocurrency exchange, added support for Litecoin, another win for the cryptocurrency. This has spiked the interest in Litecoin and increased its trading volume. The price of LTC, the token that powers the Litecoin blockchain, is up to $30, compared to a year ago, when it hovered around $5.
Future of Litecoin.
Litecoin’s long-term goal is being able to help Bitcoin alleviate some transactional volume by taking over smaller, less important transactions. So you could use Lightening Networks on Litecoin to buy a coffee with zero confirmation times or transaction fees. But if you’re wiring $50,000 to your bank, you could still use Bitcoin for the increased security that comes from a bigger network of decentralized miners.