Blockchains 101: Litecoin

TradingBull
3 min readDec 17, 2020

Bitcoin’s light brother

Introduction

Litecoin (Ticker: LTC) has been developed in 2011 by Charlie Lee, a former Google employee with the intention to create a lighter version of Bitcoin. It is based on the Bitcoin protocol and also validate transactions through the process of mining (PoW).

Litecoin network is exclusively dedicated to support its LTC peer-to-peer cryptocurrency and is an open-source software project released under the MIT/X11 license.

Litecoin is sometimes referred to as “Digital Silver”.

Litecoin Artwork

Description

Litecoin is an early spinoff (Fork) of Bitcoin, modified and upgraded to include some technical improvements such as a lower blocktime (transaction time) of 2.5 minutes (against 10min for Bitcoin), making it theoretically faster than BTC, a lighter GUI, higher hard cap (x4 total supply) and the scrypt cryptographic function which requires more memory than Bitcoin’s SHA-256.

Litecoin has been the first to successfully implement the lightning network in 2017 by transferring a micro-transaction from Zurich to SF in under one second.

Privacy:

Litecoin is in the process of integrating Mimblewimble, a privacy-focused protocol aiming to improve blockchain privacy, scalability, and fungibility by combining transactions in a CoinJoin but also by obscuring transactions to any third party monitoring the network.

Mining:

The Proof of Work consensus algorithm of Litecoin is very similar to the one of Bitcoin.

The Scrypt algorithm allows GPU mining of Litecoin, something that is not possible anymore for Bitcoin, requiring specialized hardware (ASICS).

The initial block reward of Litecoin was of 50 LTC per block. It halved a first time in 2015 at 25 LTC per block and a second in August 2019 (12.5 LTC per block).

The Litecoin core client (software wallet)

Storage and wallets:

There a plenty of way to store Litecoin. The safest being to store it in a cold wallet (offline wallets such as paper wallet or hardware wallets) or hot wallet (such as mobile or desktop wallets) or by using a custody service that will store it on their own cold wallet/vault (thus limits the benefit of decentralization by involving a third party).

Keeping cryptocurrencies on centralized crypto exchanges and other selling platforms being considered the riskiest since the large volumes of bitcoin stored may attract hackers’ interest.

Official LTC core wallet: https://litecoin.com/en/individuals/wallet/desktop/litecoin-core

Technical specificities:

  • Type: Native Coin
  • Total Supply: 84,000,000
  • Subunit: 10–9 (Litoshi)
  • Consensus: Proof of Work (PoW)
  • Encryption algorithm: Script
  • Privacy: Pseudonymous (Low)
  • Smart contracts: no
  • Blocktime: 2.5 minutes
  • Coding languages: C++ / Go (Java, Python)
  • Open source: Yes
  • Current version: 0.17.1
  • Previous versions: 0.17.0

Documentation:

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