Through halving, the miner reward for successfully recording new blocks to the Litecoin blockchain is decreased (halved) at regular intervals. So when Litecoin first launched, the miner reward for adding a new block to Litecoin’s blockchain was 50 LTC. Over the past few years, that reward has decreased via halving to 12.5 LTC as a block award. The improved transaction speed was meant to prove to merchants that they no longer had to be frustrated by Bitcoin’s long settlement time. Instead, they could accept Litecoin and settle payments faster and, therefore, conduct business more quickly and at speeds more on par with other digital payment methods.

In terms of value, ETH generally ranks in the top five and has more trading volume. Which is better depends on your interests, goals, and intended uses. Litecoin uses a hashing algorithm called Scrypt (pronounced es-crypt). But it found greater acceptance in the cryptocurrency community after the 2011 Tenebrix project modified Scrypt to work with regular CPUs for mining. While the Litecoin network boasts of near-instant transaction confirmations, if you transact LTC on a cryptocurrency exchange it would take a little longer for it to reflect in your account. For example, both Kraken and Gemini require 12 confirmations for LTC transactions, which takes about 30 minutes.

Once a miner verifies it, the next block enters the chain, which is a record of every Litecoin transaction ever made. Litecoin is a cryptocurrency designed for peer-to-peer transactions. Ethereum is an ecosystem that runs on a global virtual machine that powers many different cryptography-based technologies. Ethereum has a token, ether (ETH), used to facilitate transactions within the Ethereum blockchain.

  1. The difference in protocols has implications on transaction processing times for both coins.
  2. Like Bitcoin, Litecoin is based on an open-source global payment network that is not controlled by any central authority.
  3. Before you invest in Litecoin, learn how to buy Litecoin and read up on cryptocurrency wallets.

Litecoin launched in 2011 as a decentralized currency by a former Google employee named Charlie Lee. Litecoin mining operations aren’t something you’ll typically see running on a computer out of someone’s living room. Solving hashes requires immense computing power, which requires significant energy and space.

Because it is open source, you could make a copy of Litecoin for free and make changes to the code to use for applications or even launch your own lightweight cryptocurrency if you wanted to. But for the vast majority of people, sticking with existing cryptocurrencies is the best way to go. These include EOS at 4,000 TPS, XRP at 1,500 TPS and Cardano at 257 TPS, to name just a few. Created by former Google engineer Charlie Lee, Litecoin was one of the first “altcoins”—a name given to cryptocurrencies other than Bitcoin (and sometimes other than Ethereum). On this date, the mining reward was reduced from 12.5 Litecoins per block to 6.25 Litecoins per block. The Lightning Network is a second-layer technology for Bitcoin that uses micropayment channels to scale its blockchain’s capability to conduct transactions.

In 2017, Litecoin adopted SegWit, and because of Litecoin’s similarity to Bitcoin, it worked as a testing ground or testnet for SegWit’s viability on the larger Bitcoin network. Some opponents of the SegWit adoption who advocated for larger Bitcoin switzerland cryptocurrency block sizes created a Bitcoin hard fork that resulted in Bitcoin Cash. Litecoin was developed by Charlie Lee, a graduate of the Massachusetts Institute of Technology (MIT) and a former Google engineer who became interested in Bitcoin in 2011.

Other Ways To Invest in Litecoin

As of the date this article was written, the author does not own cryptocurrency. LTC is available on most crypto exchanges (e.g., Binance, Coinbase, Gemini) against other cryptos like BTC or ETH and national currencies like dollars and euros. Litecoin ranked in the top 15 largest cryptocurrencies in terms of market capitalization (though remaining far below that of Bitcoin). As of October 2023, it had more than 73 million coins in circulation.

Litecoin Hashing Algorithm

If you or the pool of computers you’re working with are the fastest to verify, you are awarded Litecoin. This is how cryptocurrency mining works with most digital currencies. Litecoin is community supported by volunteers who work to update the open-source code that runs the Litecoin network. software testing methodologies learn the methods and tools Just like Bitcoin, Litecoin uses blockchain technology that makes transactions secure. Litecoin is a cryptocurrency created from a fork of the Bitcoin blockchain but with several changes. It is faster, will have more coins available, and uses a different algorithm than Bitcoin.

We and our partners process data to provide:

Litecoin has implemented several features since its launch intended to improve its transaction speed without compromising the security and integrity of the network. According to Litecoin, there’s one project left (on its project page) to integrate into the blockchain, called MimbleWimble. Litecoin is considered to be among the first altcoins, derived from Bitcoin’s original open-source code. However, as the cryptocurrency market has become more saturated and competitive, Litecoin’s popularity has waned somewhat.

From the get-go, without any additional tech layers added on top of the Litecoin blockchain, it’s a faster cryptocurrency to transact than Bitcoin, and it does so more cheaply. Litecoin miners solve complex mathematical problems called hashes to earn the right to record new transactions to the blockchain. “Litecoin is the second-oldest cryptocurrency, forked from the Bitcoin protocol in 2011,” says Jay Blaskey, digital currency specialist at BitIRA. “It was engineered to be used for fast, secure and low-cost payments.” Think of it as a Bitcoin spinoff. Lee developed scrypt specifically to make large-scale, custom-built hardware attacks on the currency more difficult. Bitcoin’s SHA-256 algorithm does not require a lot of random access memory (RAM) as an impediment to parallel processing, whereas Scrypt does.

Litecoin (LTC) is a cryptocurrency created from a fork in the Bitcoin blockchain in 2011. It was initially designed to address the developer’s concerns that Bitcoin was becoming too centrally controlled, and to make it more difficult for largescale mining firms to gain the upper hand in mining. While eventually unsuccessful in preventing enterprise miners from taking over the lion’s share of Litecoin mining, the cryptocurrency has reworked itself into a minable coin and a peer-to-peer payment system. Litecoin (LTC) is a cryptocurrency designed for instant transactions with near-zero cost. It runs on open-source software designed by a community of Litecoin developers and launched in 2011 as an “altcoin,” or alternative to Bitcoin based on some changes to Bitcoin’s original code. Litecoin was launched with the aim of being the « silver » to Bitcoin’s « gold. » Like Bitcoin, Litecoin is a peer-to-peer internet currency.

MimbleWimble is a privacy protocol that builds on confidential transactions that encrypt or obscure information like transaction amounts. It is argued that MimbleWimble can decrease blocksize and increase scalability. Charlie Lee announced in early 2019 that Litecoin would pursue MimbleWimble development, which is underway (as of October 2023). By making Litecoin’s consensus algorithm memory intensive, Lee sought to thwart the hardware arms race, though in practice, that didn’t happen as the rise of GPU mining answered the need for greater RAM. Similar to the SegWit example, the implementation of the Lightning Network on Litecoin was a test net to prove innovations are possible on Bitcoin.

Future Plans for Litecoin (LTC)

According to Lee, « In October of 2011, I was playing around with the Bitcoin codebase, and I guess the short of it was that I was just trying to create…a fork of Bitcoin. It was mainly a fun side project. » You can sell your Litecoin on the same exchanges where you can purchase it. However, selling your crypto on a centralized exchange is different than selling it on a decentralized one. For example, if you’re selling your Litecoin on an exchange like Kraken, you’ll need to send your LTC to your Kraken address. One of Litecoin’s original missions was to discourage enterprise-sized miners from gaining control of the mining process by using a different encryption method. However, miners quickly adapted their specialized machines and continued to grow their mining capacity.

Lee released Litecoin via an open-source client on GitHub on October the best in blockchain and cryptocurrency week 38 leaderboard 7, 2011.[15] The Litecoin network went live on October 13, 2011.

As a popular cryptocurrency, Litecoin is widely available and supported by the greater cryptocurrency community. If you’ve ever bought Bitcoin, it’s a virtually identical process, but you’ll want to look for the symbol LTC in your trading app rather than BTC for Bitcoin. Yet when miners add a new block to Litecoin’s blockchain, they’re rewarded with newly-generated LTC. This could indefinitely increase the supply of Litecoin if it weren’t for halving. While Bitcoin is capped at a maximum supply of 21 million coins, Litecoin is capped at 84 million coins. This slow transaction speed frustrates merchants who want to accept Bitcoin as payment.

Speak with a financial advisor about how much you could realistically invest in cryptocurrency based on your unique financial goals. At the time of this writing, Bitcoin transaction fees were significantly higher, at around 3.92% on average, compared with Litecoin’s transaction fees of roughly 0.06%. Both are open-source projects that use proof of work to verify transactions.