What is Litecoin? – New Zealand’s Litecoin Overview
What is Litecoin? — Litecoin is commonly referred to as ‘silver to Bitcoin’s gold.’ This is thanks to there being several technological similarities between the two cryptocurrencies. LTC is also one of the world’s biggest cryptocurrencies in terms of market capitalization.
- Litecoin was the first reputable and independently developed cryptocurrency brought to market after Bitcoin.
- The Litecoin price dropped significantly in 2018. However, Litecoin is still favoured by investors for its future potential.
- 2019 saw the launch of a Litecoin powered payment network called Lightning, designed to increase Bitcoin payment processing speeds
Litecoin is a top favorite cryptocurrency among New Zealand cryptocurrency investors and traders. First launching in October 2011, Litecoin is one of the world’s last surviving early altcoins. When looking at a few LTC fundamentals, it is easy to see why.
Litecoin and the Man from Google
In the beginning, most early crypto developers were creating altcoins as nothing more than get-rich-quick schemes. However, by 2011, cryptocurrency and Bitcoin had caught the attention of a Google developer called Charlie Lee.
Who is Charlie Lee?
Charlie Lee is a former Google developer. During his time with Google, Lee was instrumental in helping bring Google products like YouTube mobile to market.
Taking a personal interest in cryptocurrency in 2010 and 2011, Lee embarked on creating his own cryptocurrency. Initially, Lee focused on creating a cryptocurrency called Fairbix. However, Lee quickly scrapped this project in favour of creating Litecoin.
Key Litecoin Fundamentals
Litecoin is a fork of Bitcoin. — This means that Litecoin uses the same codebase as Bitcoin. However, Charlie Lee was capable of predicting in 2011, that scaling would be a concern for Bitcoin in the near future. For this reason, Lee focused on creating his cryptocurrency in a way which would see transactions settle faster. (And, therefore LTC would be more useful as an everyday digital currency.)
- Litecoin is capable of settling transactions faster than Bitcoin, thanks to 2.5-minute transaction block processing times.
- Like Bitcoin, Litecoin is a mined cryptocurrency which uses a Proof of Work consensus mechanism to validate transactions. However, Litecoin uses a Script-based mining algorithm in place of Bitcoin’s SHA-256 mining algorithm. This helps make LTC mining more decentralized.
- In total, there is a maximum supply of 84,000,000 LTC. This is quadruple the total supply of Bitcoin.
Litecoin is also a leader in the cryptocurrency community, concerning the development of new blockchain technologies.
Litecoin is a Fork of Bitcoin
In 2017 and 2018, two controversial forks of Bitcoin came to market. Bitcoin Cash and more recently Bitcoin Cash SV, have been since criticized for co-opting the Bitcoin brand. This is important as Litecoin is also a fork of Bitcoin, though, not one which attempts to co-opt the Bitcoin brand.
Litecoin was launched by ex-Google developer Charlie Lee in late October 2013. Intrigued by Bitcoin, Charlie Lee saw potential problems concerning future Bitcoin scalability. Lee, therefore, created a fork of the Bitcoin Core client. However, Lee didn’t create a Bitcoin clone to capitalize on the Bitcoin namesake.
Litecoin is Instrumental in Helping Bitcoin Scale
Like Charlie Lee predicted in 2011, Bitcoin in 2017 was struggling to scale to meet the needs of millions of new users. However, Charlie Lee had already successfully implemented a transaction speed upgrade on the LTC network called Segwit.
Segwit is an LTC (and now BTC) blockchain upgrade. More specifically, an upgrade which removes some transaction signature data from transaction blocks as they are processed. This increases transaction processing times and lowers fees.
Because Litecoin is modelled on Bitcoin, Charlie Lee proposed implementing Segwit on the Bitcoin blockchain. This eventually worked to lower BTC transaction fees. (As Charlie Lee predicted it would.) However, Litecoin is instrumental in helping Bitcoin scale in other ways also.
The Lightning Network and Atomic Swaps
Shortly after Segwit was implemented on the Bitcoin blockchain, LTC and BTC developers started working closely on off-chain Bitcoin scaling solutions.
Known today as the Lightning Network, Bitcoin, and other cryptocurrencies can be transacted instantly, via a process called Atomic Swapping.
Atomic Swaps allow cryptocurrency users to instantly swap like for like amounts of cryptocurrencies on different blockchains. Transactions take place instantly. With Bitcoin, BTC amounts can, therefore, be instantly exchanged fee-free for faster coins like LTC. This effectively allows real-world cryptocurrency payments to settle instantly.
Is LTC a Good Cryptocurrency to Invest In?
A majority of cryptocurrency investors buy Litecoin because of LTC’s Bitcoin-like similarities. By helping Bitcoin scale by developing the Lightning network, some also believe that the Litecoin price will continue to follow that of Bitcoin. (Co-dependence means that when Bitcoin goes up, the LTC price should go up also.)