Litecoin is an alternative cryptocurrency to Bitcoin and the second largest (by market cap) of all the alt coins . If you’re completely new to the cryptocurrency world then please take a look What is Bitcoin? first.
Bitcoin is open source, which means it can be used and modified by anyone to create other cryptocurrencies. Many other cryptocurrencies have since been launched with Litecoin being one of them.
Litecoin was created by Charles Lee in 2011. Charles describes Litecoin as being “more abundant & lightweight and as the silver to Bitcoin’s gold”. Technically Litecoin is very similar to Bitcoin but has several key differences, see below.
|Created By||Satoshi Nakamoto||Charles Lee|
|Coin Cap||21 Million||84 Million|
|Block Time||10 Mins||2.5 Mins|
|Difficulty Adjustment||Every 2016 blocks||Every 2016 blocks|
|Initial Reward||50 BTC||50 LTC|
|Current Reward||25 BTC||50 LTC|
|Block Reward Halved||Every 210,000 blocks||Every 840,000 blocks|
|Transaction Fee||0.0001 BTC||0.02 LTC|
- Litecoin can confirm transactions faster than Bitcoin, this makes it attractive to merchants and recipients as there is less time to wait for payments.
- Litecoin can handle a higher volume of transactions due to the faster block time.
- Faster block times also reduces the risk of double-spending.
- Mining is accessible to more people because Litecoin uses a different Proof Of Work hashing algorithm. Bitcoin uses SHA-256 whilst Litecoin uses Scrypt. SHA-256 favours raw processing power, whilst Scrypt favours memory – this basically means that custom made ASIC and FPGA hardware, which is now used for Bitcoin mining, has no advantage for Litecoin mining. This allows mining to be performed with powerful graphic cards rather than super expensive custom made hardware.
The most common wallet available for Litecoin is Litecoin-Qt. Built for Linux, Windows, and Mac OS X. It is based on Bitcoin’s Bitcoin-Qt wallet.
See my post on Securing your Litecoin wallet – for Litecoin-Qt.
Buying and Selling Litecoin
There are numerous cryptocurrency exchanges where you can purchase Litecoins. I have written a guide explaining how to go about buying Litecoin with one exchange – Please see my post on How to buy Litecoins for more info.
After purchasing Litecoins you can freely move them to your wallet and back and/or to other exchanges to trade them.