Litecoin (
Abbreviation: LTC;
sign: Ł) is a decentralized
peer-to-peercryptocurrency and
open-source software project released under the
MIT/X11 license. Inspired by
Bitcoin, Litecoin was among the earliest
altcoins, starting in October 2011.[3][4] In technical details, the Litecoin main chain shares a slightly modified
Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees,[5] faster transaction confirmations,[4] and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold."[6][7][8] In 2022, Litecoin added optional privacy features via soft
fork through the MWEB (
MimbleWimble extension block) upgrade.[8][9]
One litecoin is divisible to eight decimal places. Units for smaller amounts of litecoin are:
lites, or millilitecoin (mŁ), equal to 1⁄1000 litecoin,
photons, or microlitecoin (μŁ), equal to 1⁄1000000,
the litoshi, which is the smallest possible division, and named in homage to bitcoin's smallest denomination the satoshi, representing 1⁄100000000 (one hundred millionth) litecoin.
History
Pre-Litecoin
By 2011, Bitcoin mining was largely
performed by GPUs.[10] 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,[11] which had been specifically designed in 2009 to be expensive to
accelerate with FPGA or ASIC chips.[12] 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).[11] 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.[13]
To address this,
Charlie Lee, a
Google employee who would later become engineering director at
Coinbase,[14] created an alternative version of Tenebrix called Fairbrix (FBX).[3] Litecoin inherits the scrypt mining algorithm from Fairbrix, but returns to the limited money supply of Bitcoin, with other changes.
Creation and launch
Lee released Litecoin via an open-source
client on
GitHub on October 7, 2011.[15] 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.[citation needed]
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.[16][17]
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.[18]
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.[19][20]
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.[21]
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.[22][non-primary source needed]
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.[24]
Scrypt, an alternative
proof-of-work algorithm, is used for Litecoin. It differs from Bitcoin's SHA-256 algorithm in part by including a sequential
memory-hard function, requiring
asymptotically more memory than an algorithm which is not memory-hard.[25]
Litecoin is merge mined with another prominent cryptocurrency, Dogecoin.[26]
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.[citation needed]
MWEB optional privacy was added to Litecoin's base layer in May 2022 via soft fork.[9] This allows amounts held within wallets and transaction amounts within MWEB to be private.[27]
^Deng, Robert H. (3 August 2017). Handbook of Blockchain, Digital Finance, and Inclusion, Volume 1: Cryptocurrency, FinTech, InsurTech, and Regulation. United Kingdom:
Elsevier Science.
ISBN9780128104422.
^Hacıoğlu, Ümit, ed. (2019). Blockchain economics and financial market innovation: financial innovations in the digital age. Contributions to economics. Cham: Springer. p. 213.
ISBN978-3-030-25275-5.