Litecoin (Abbreviation: LTC; Currency symbol: Ł) is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was the second cryptocurrency starting in October 2011.[Ismail, Ashiana. "Permissioned blockchains for real world applications." PhD diss., 2020.] In 2022, Litecoin added optional privacy features via soft fork through the MWEB (MimbleWimble extension block) upgrade.
History
Pre-Litecoin
By 2011, Bitcoin mining was largely performed by GPUs.
This raised concern in some users that mining now had a high barrier to entry, and that
CPU resources were becoming obsolete and worthless for mining. Using code from Bitcoin, a new alternative currency was created called
Tenebrix (TBX). Tenebrix replaced the SHA-256 rounds in Bitcoin's mining algorithm with the
scrypt function,
which had been specifically designed in 2009 to be expensive to accelerate with FPGA or ASIC chips.
This would allow Tenebrix to have been "GPU-resistant", and utilize the available CPU resources from bitcoin miners. Tenebrix itself was a successor project to an earlier cryptocurrency which replaced Bitcoin's issuance schedule with a constant block reward (thus creating an unlimited money supply).
However, the developers included a clause in the code that would allow them to claim 7.7 million TBX for themselves at no cost, which was criticized by users.
In response, Charlie Lee, a then Google employee and later Coinbase engineering director, created Fairbrix (FBX) an alternative to Tenebrix. Litecoin adopted the scrypt mining algorithm from Fairbrix while reintroducing Bitcoin's limited money supply and implrementing additional changes.
Creation and launch
Lee released Litecoin via an open-source client on
GitHub on October 7, 2011.
The Litecoin network went live on October 13, 2011.
Litecoin was a source code fork of the Bitcoin Core client, originally differing by having a decreased block generation time (2.5 minutes), increased maximum number of coins, different hashing algorithm (scrypt, instead of SHA-256), faster difficulty retarget, and a slightly modified GUI.
2011–2016
After launch, the early growth of Litecoin was aided by its increasing exchange availability and liquidity on early exchanges such as
BTC-e. During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.
In early 2014, Lee suggested merge mining (auxPOW) Dogecoin with Litecoin to the Dogecoin community at large. In September 2014, Dogecoin began merge-mining with Litecoin.
2017–2021
In 2020,
PayPal added the ability for users to purchase a derivative of Litecoin along with
Bitcoin,
Ethereum, and
Bitcoin Cash which could not be withdrawn or spent as part of its Crypto feature.
[BBC (2020) "PayPal allows Bitcoin and crypto spending"
]
[ Crypto with PayPal is here , PayPal.com]
In September 2021, a fake press release was published on GlobeNewswire announcing a partnership between Litecoin and Walmart. This caused the price of Litecoin to increase by around 30%, before the press release was revealed as a hoax.
2022–present
In May 2022, MWEB (Mimblewimble Extension Blocks) upgrade was activated on the Litecoin network as a
soft fork. This upgrade provides users with the option of sending confidential Litecoin transactions, in which the amount being sent is only known between the sender and receiver.
In June 2022, PayPal added the ability for users to transfer Litecoin along with Bitcoin, Ethereum, and Bitcoin Cash between PayPal to other wallets and exchanges.
On BitPay, Litecoin reached a record 41.8% market share of all cryptocurrency transactions in early 2024.
Differences from Bitcoin
Litecoin is different in some ways from
Bitcoin:
-
The targeted block time is every 2.5 minutes for Litecoin, as opposed to Bitcoin's 10 minutes. This allows Litecoin to confirm transactions four times faster than Bitcoin.
-
Scrypt, an alternative proof-of-work algorithm, is used for Litecoin. According to Motherboard, "Scrypt was chosen because it theoretically prevents the use of ASICs, those specialized chips that greatly increase mining power and efficiency (though there is debate over the validity of this claim).".
-
Litecoin is merge mined with another prominent cryptocurrency, Dogecoin.
-
Litecoin has a maximum circulating supply of Ł84,000,000, which is four times larger than Bitcoin's maximum circulating supply of ₿21,000,000.
-
MWEB optional privacy was added to Litecoin's base layer in May 2022 via soft fork.
Third party vendors providing Payment terminal for Litecoin include BitPay.
See also
-
List of scrypt crypto currencies
External links
