What algorithm is litecoin

what algorithm is litecoin

As Bitcoin has started a new era of economics and became a self proclaimed new currency, a lot of other cryptocurrencies have entered the game.

Litecoin was created by Charlie Lee an ex-Google employee, who, as many others, beleives that Litecoin is the “Silver” of all cryptocurrencies, while Bitcoin is the true “Gold”.

Litecoin basics

What is Litecoin? What’s the difference between Bitcoin and Litecoin? Litecoin is a peer-to-peer digital currency that enables near-instant payments to anyone in the world with almost zero fees. This is similar to what a lot of other coins offer, the peer-to-peer version of digital cash.

Like Bitcoin, Litecoin is an open source software project. It’s been announced even by the creator of Litecoin that Bitcoin inspired the creation of Litecoin, and, to be completely honest, the projects are very similar. However, the two currencies do have a few major differences.

Litecoin Creation

Litecoin originated in October 2011, when the project went live. Back in 2011, it was one of the first cryptocurrencies to take Bitcoins structure and modify it to create something different. The Litecoin network is capable of handling a higher transaction volume than Bitcoin. This reason to this is the more frequent block generation.

Litecoin Creator

The founder of Litecoin is not anonymous like the famous Satoshi Nakamoto who’s identety is still a mystery. Litecoin was founded by Charlie Lee while he was working as an engineer at Google. Lee has also sold and donated the majority of his Litecoin holdings and, unlike the creator of Bitcoin, who mined more than 1 million BTC in the very beginning himself, he mined only 150. This was done to avoid any possible conflict of interest that could arise from his influence and position as a Founder of the company.

The difference between Litecoin and Bitcoin

Understanding their differences is a major part in understanding what makes this cryptocurrency unique.

Transaction Time

The first thing is that Litecoin processes a block every 2.5 minutes. This is a tremendous improvement over the Bitcoin network that mines a new block about every 10 minutes. This improvement means that transactions on the LTC network are way faster than on BTC network.

Hashing Algorithm

The second one is that LTC uses a Scrypt algorithm, this is different than Bitcoin which uses SHA-256.

There are a couple of reasons that a Scrypt algorithm was chosen over SHA-256. One reason is that a scrypt algorithm requires memory resources, and does not solely rely on hashing power. Scrypt mining was designed to be less susceptible to the kinds of custom hardware solutions employed in ASIC-based mining. However, with the increase of the price in LTC there are now ASIC Litecoin miners.

An ASIC miner is a machine programmed to do 1 task at a very high rate of speed. ASIC mining has lead to mining pools and a decrease in the centralization of Proof of Work coins. Some concider it a huge problem.

Additionally, by using a different algorithm than Bitcoin, Litecoin relies on a different set of miners than Bitcoin and there is no mining competition.

Coin Details

The third thing to consider is the total supply of the currency. The total amount of Litecoins that will ever exist is 84 Million. Bitcoins total supply will be 21 Million. The reason that the supply is 4 times larger is to take into account the 4 times faster rate of transaction confirmation.

Like Bitcoin, Litecoin can be divided into 8 decimals. Also similar to Bitcoin, the Litecoin block reward for miners reduces by half at a specific block number. With LTC this happens every 840,000 blocks, which equates to about every 4 years. The next halving will reduce the block reward from 25 Litecoins to 12.5 Litecoins. This is going to happen around August 8th, 2019.

Litecoin Facts

Facts about LTC, at the time of publishing:Total Litecoins in circulation: 60,872,375Total Litecoins to be Created: 84,000,000Percentage of total Litecoins mined: 72.47%Total Litecoins left to mine: 23,127,625LTC price: $56.40Market capitalization: $3,433,256,735.14Litecoins generated per day: 14,400Total blocks: 1,594,895Blocks until mining reward is halved: 85,105Approximate block generation time: 2.5 minutesApproximate blocks generated per day: 576

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