What is The Litecoin or LTC?

Litecoin is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Inspired by and technically nearly identical to bitcoin (BTC), Litecoin creation and transfer is based on an open source protocol and is not managed by any central authority. After bitcoin, Litecoin is the second-largest true cryptocurrency by market capitalization.

Litecoin was released via an open-source client on GitHub on October 7, 2011 by Charles Lee, a former Google employee. It was a fork of the Bitcoin-Qt client, differing primarily by having a decreased block generation time, increased maximum number of coins, different hashing algorithm (scrypt, instead of SHA-256), and a slightly modified GUI. During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours. Litecoin reached a $1 billion marketcap in November 2013. As of August 2015, its market capitalization is US$181,542,352 with the price at $4 levels.

Transactions

A peer-to-peer network similar to bitcoin's handles Litecoin's transactions, balances and issuance through scrypt, the proof-of-work scheme (Litecoins are issued when a small enough hash value is found, at which point a block is created, the process of finding these hashes and creating blocks is called mining). The issuing rate forms a geometric series, and the rate halves every 840,000 blocks, roughly every four years, reaching a final total of 84 million LTC.

Litecoins are currently traded primarily for both fiat currencies and other cryptocurrencies, mostly on online exchanges. To avoid the danger of chargebacks, reversible transactions, such as those with credit cards, are not normally used to buy litecoins as Litecoin transactions are irreversible.

Exchanges

As of February 2015 there are many exchanges that deal with Litecoin. Although some exchanges allow only trading between litecoins and bitcoins, many exchanges provide trading between litecoins and US dollars (Bitfinex, BTC-e, OKCoin, BitBay), Euros (Kraken, Yacuna), and Chinese Yuan (Huobi, BTC China, OKCoin).

Differences from Bitcoin

Litecoin offers three key differences from bitcoin. The Litecoin network aims to process a block every 2.5 minutes, rather than bitcoin's 10 minutes, which its developers claim allows for faster transaction confirmation. A drawback is a higher probability of orphaned blocks. Advantages can include greater resistance to a double spending attack over the same period as bitcoin. However, total work done is a consideration. For example, if the Litecoin network has comparatively ten times less computing work done per block than the bitcoin network, the bitcoin confirmation is around ten times harder to reverse, even though the Litecoin network is likely to add confirmation blocks at a rate four times faster. Litecoin uses scrypt in its proof-of-work algorithm, a sequential memory-hard function requiring asymptotically more memory than an algorithm which is not memory-hard. The Litecoin network will produce 84 million litecoins, or four times as many currency units as will be issued by the bitcoin network. The original intended purpose of using scrypt was to allow miners to mine both bitcoin and Litecoin at the same time. The choice to use scrypt was also partially to avoid giving advantage to video card (GPU), FPGA and ASIC miners over CPU miners. Due to Litecoin's use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for bitcoin, which uses SHA-256. However, as of March 2015, ASIC miners are widely available and the primary method of mining Litecoin.