Everything you need to know about Litecoin (LTC)

Hello world

On 11 April 2021, LTC broke through the $250 mark for the first time since December 2017. This top-10 coin, which has long been in the shadow of ETH, XRP, USDT and other younger and trendier cryptocurrencies, is gaining popularity again. Here’s what you need to know before you plan to buy lightcoin.

From $50 to $250 in 6 months: the rise of Litecoin

Litecoin is a cryptocurrency that investors, traders and the media often overlook undeservedly. And it should be, as this veteran coin has remained in the top 10 in terms of capitalisation over the years.

The beginning of 2021 was especially successful for LTC: the price jumped from $125 at the beginning of January to $250 on April 11, capitalization reached $16.7 billion, and daily trading volume was $5.5 billion. By the way, LTC was worth only $50 a year ago.

A brief history of Litecoin

The creator of LTC, Charlie Lee, used to work for Google for almost a decade and even participated in the development of Chrome browser. He wrote the code for the cryptocurrency Litecoin (which is a fork of bitcoin) in his spare time and first posted it on the Bitcointalk forum in October 2011.

Charlie Lee did not set out to compete with bitcoin. He even said that LTC compared to BTC is like silver compared to gold, meaning that LightCoin is a simpler and more convenient alternative for everyday transactions.

Between 2013 and 2017. Lee worked at CoinBase, including as director of development. It was a period of stagnation for Litecoin: there were hardly any serious technological updates.

Finally at the end of 2017. Lee returned to full-time work on the project: he founded the Litecoin Foundation and is still its director and main donor (the Litecoin Foundation exists on donations). By the way, Lee sold almost all of his LTCs a long time ago.

The main differences of Litecoin from Bitcoin are

Faster transactions. It takes an average of 2.5 minutes to create a new block in the Litecoin network, while on the Bitcoin blockchain, it takes 10 minutes. Accordingly, transactions in LTC are processed 4 times faster, although most services require more than one confirmation (often around 10).
Lower fees. And not just lower, but hundreds of times lower. In the middle of April, 2021 one transaction in Litecoin network was on the average $0,05, regardless of volume. At the same time, the average fee in the Bitcoin network was $14.87, that is almost 300 times higher.

Simpler mining. Litecoin uses a hashing algorithm called Scrypt, which requires far less processing power than the SHA-256 algorithm used in the Bitcoin network. Instead, it requires a pretty decent amount of RAM. Therefore, special expensive devices (ASICs) are not needed to mine Litecoin; a powerful graphics card (GPU) is enough.

Similarities between Litecoin and Bitcoin

Mining. Although the algorithms are different, both VTC and LTC are mined using mining (Proof-of-Work consensus algorithm). Keeping it very simple, the process can be described as this: miners look for solutions to specific cryptographic problems, and whoever finds the right solution first gets a reward. One block – one task. Currently, the reward per block is 12.5 LTC (about $3100).
Halving. Every 840,000 blocks (about 4 years) the reward per block in the bitcoin and lightcoin networks is automatically halved. In this way, the rate of new coin generation is gradually reduced (inflation). At the beginning of LiteCoin’s existence, the reward was 50 LTC per block, now it is 12,5 (for BTC it is 6,25). The next halving is expected to take place in August 2023.
Limited issue. The maximum number of litecoins that can be namained is 84 million. This is four times the issuance ceiling of VTS (21 million). Once this threshold is reached, LTC mining will stop.
Approximately 66,7 million LTCs have been mined so far, but as the speed of coin emission is decreasing because of halving, the last LTC will be created around 2142; by the way, VTC emission will be finished by 2140. That said, miners will continue to receive transaction confirmation fees – if, of course, there will still be transactions on the Litecoin network by then, as 120 years is a long time.

What’s next for Litecoin

In the coming months, Litecoin will get a major upgrade with the funny name MimbleWimble (that was the name of the spell in Harry Potter). It will give users the ability to increase transaction privacy: in particular, when this feature is activated, the recipient will not be able to find out how much LTC is at the sender’s address.

Charlie Lee emphasizes that MimbleWimble will not make LightCoin an anonymous coin like Monero, as each participant will decide whether or not to hide their transactions. This means that LTC does not risk being excluded from cryptocurrency exchanges as a result of claims by regulators, as has happened with many anonymous cryptocurrencies.

In addition to low commissions, the main advantage of this option is security and guarantees: you will definitely get the Lightcoins, and they will not turn out to be “dirty”, i.e. involved in illegal transactions.
The alternative option is a P2P exchange, where you purchase the crypto directly from a private seller. Most P2P services offer VTS and ETN, but there are a few where LTC is available – LocalCryptos, for example. Keep in mind that each merchant sets its own fee, and it is already included into the price, so you need to carefully compare the rate of each offer with the official one: sometimes the fee is as high as 8%.

Finally, there are also unofficial exchangers, where you can buy LTC not only with your card, but also with all kinds of e-money and even for cash. These exchangers do not provide you with verification, but there is no guarantee and the exchange rate is often unprofitable. You should only use such services if you do not want to go through KYC for some reason.

Litecoin is a time-tested coin that owes its popularity primarily to cheap transactions. While on Ethereum and Bitcoin networks any transaction will cost more than $15, LTC can be transferred for as little as $0.05. So if you are planning to make cryptocurrency transfers, LightCoin is a great choice.