Discussions about cryptocurrencies generally come down to the Bitcoin-Ethereum-Ripple trio. We should bear in mind, however, that these three coins are not the only players on Cryptocurrency market. Litecoin, although sometimes overlooked in discussions about most popular cryptos, has been on the market for over 8 years, ranking in the top 10 coins for most of that time. It’s time to take a moment and have a closer look at its history, application and specificity.
Litecoin is a cryptographic, peer-to-peer currency, designed to make small, daily payments quickly. It made its debut in 2011 as a side project of Charlie Lee, who back then worked as an IT specialist at Google. It was supposed to be a slightly improved version of Bitcoin, containing a few significant improvements. The main difference between these e-coins was supposed to be improved speed, scalability and a greater degree of transparency of Litecoin compared to BTC.
Charlie, like many others, was fascinated by Bitcoin, the idea and the independent trading of cryptocurrencies, which in his eyes was a unique combination of broadly understood computer science and economics. Driven by his newfound obsession, in early 2011, he decided to start experimenting with his script, in order to create a new, better and more effective form of crypto. Similarly to his predecessors, he purchased one unit of Bitcoin and started working on its script. The first result of these experiments was Fairbix, the first project to use proof-of-work system based on the script. However, it was not successful, considering that it was practically a copy of another already existing concept with errors.
The failure of the first project was not enough to put an end to the fascination of its creator and in October 2011, Litecoin had its premiere. Like other altcoins created at that time, it was based on the BTC script, but it contained some key changes, focused on the speed and transparency of the project. Since then, Litecoin has been continuously developed and is currently 7th biggest cryptocurrency on the market, invariably remaining an essential part of cryptocurrency trading.
Charlie Lee is quite a famous figure in cryptographic circles. After graduating from MIT in 1999, he spent over a decade working for giants such as Microsoft or Guidewire. From 2007 to 2013, he worked on many large projects at Google, dividing the last two years of his employment between an IT career and cryptographic obsession. In 2011, after working for months, he issued a publication about Litecoin, but stayed at Google for two more years before going to Coinbase in 2013. In 2017, he left Coinbase and devoted himself entirely to Litecoin. Also in 2017, he got rid of all his Litecoins, except for a few physical copies, which he decided to keep for sentimental reasons. As the reason he gave „conflict of interest”, as many people accused him of manipulating Litecoin’s prices through controversial Tweets. Due to his commitment to the idea of transparency, Charles made a shocking decision to sell his coins. Currently, he continues to work on Litecoin as Managing Director.
Like most altcoins created around 2011, Litecoin is based on Bitcoin code. It contains, however, a few key differences, which make it an indisputably separate cryptocurrency.
Litecoin is four times faster, creating a block every 2.5 minutes compared to 10 minutes in Bitcoin’s case. It also assumes the production of four times higher amount of coins than BTC, i.e. a total of 84 million Litecoins. He also uses also a different, newer encryption algorithm, that is Script instead of Bitcoin’s SHA-256. It affects primarily the coin mining process, as while Bitcoin requires expensive, specialised hardware and considerable outlay, Litecoin can be mined on more common processors. The transaction cost is also significantly lower than that of Bitcoin.
It is not difficult to notice, however, that although Litecoin was created on the basis of quite archaic Bitcoin code, it introduced a few significant changes, which alter and improve its functioning compared to the original.
Compared to other cryptocurrencies, Litecoin may seem unimpressive. However, it is worth remembering that its assumption is not to transfer huge amounts or be a way to invest large amounts of funds, but to make smaller, everyday transactions. The principle of its operation is quite similar as in other cryptocurrencies intended for direct payments, however, thanks to its speed and transparency, on which its creator always placed special emphasis, it definitely stands out from other coins.
Many people tend to skip Litecoin based on its relatively low price and capitalisation, concluding that it will not be a profitable investment. Truth be told, Litecoin is consistently ranked in the top ten of most important cryptocurrencies for a reason. Transparency and concentration on smaller payments have great potential in the rapidly growing and expanding cryptocurrency market. So it’s possible that as cryptocurrencies become more popular and more widely accepted as a means of payment, Litecoin will be more and more convenient to use precisely because of its transparency and speed.
Of course, cryptocurrency market is in its nature quite volatile and dynamic, but it cannot be denied that Litecoin is the king of its niche and has a lot of potential for development. It can be proven by the fact that it’s easily available not only on large cryptocurrencies exchange markets, but also in smaller online cryptocurrency exchanges, such as CryptoATM, where it’s located right next to coins such as Bitcoin Cash or Stellar.
Although Litecoin doesn’t have great ambition to „outdo” Bitcoin, it is a definitely interesting and practical cryptocurrency of a very specific profile, occupying a niche defined from the beginning. It’s a good idea to pay some attention to it and follow its development. Continuous development and a stable position on the market mean that Litecoin has a great potential and, what’s more, is a very practical and useful tool enabling quick payments at minimal costs.