What is cryptocurrency Litecoin (LTC) and how does it work?

What Is Litecoin (LTC)?

Widely considered as the first successful altcoin, Litecoin’s 2011 release inspired countless developers to try to expand the crypto user base by altering Bitcoin’s code and utilizing it to launch different networks.

While Litecoin was not the first cryptocurrency to copy Bitcoin’s code and alter its features, it is one of the most significant ones (historically speaking). However, Litecoin was not only slightly modifying Bitcoin’s source code, but also created several revolutionary features, such as the Lightning Network and Segregated Witness.

Rather than acting as competition to Bitcoin, Litecoin positioned itself as a friendly cryptocurrency with slightly different goals.

How Does Litecoin Work?

Litecoin shares many features with the largest cryptocurrency by market cap – Bitcoin. However, the two cryptocurrencies are not the same, even though they have a lot in common.

Like Bitcoin, Litecoin is an open-source blockchain that uses a proof-of-work consensus mechanism, enabling its users to dedicate computing power and earn Litecoin in exchange for verifying blocks. Though the consensus mechanism is the same, the algorithms used to validate blocks are completely different. While Bitcoin uses the Secure Hash Algorithm (SHA), Litecoin uses a consensus algorithm called Scrypt.

Other than its algorithm, Litecoin differs from Bitcoin in two major ways: its total supply and its block production rate. Litecoin increased the rate at which blocks are solved by four times that of Bitcoin, while also increasing the supply four-fold, to 84,000,000.

Who Are the Founders of Litecoin?

Ever since its inception, Litecoin has been closely associated with its creator, Charlie Lee. Lee is a computer scientist and a Massachusetts Institute of Technology graduate. Before creating Litecoin, Lee worked at the Internet giant company – Google. He later joined the cryptocurrency exchange Coinbase as its Director of Engineering in 2013.

Once he joined Coinbase, Lee put the development of Litecoin aside until four years ago.

Charlie Lee departed from Coinbase to pursue Litecoin development full time in late 2017. He now serves as the managing director of the Litecoin Foundation, a development team working on the project full-time.

What Makes Litecoin Unique?

Though its code originates from Bitcoin, Litecoin is a cryptocurrency serving a purpose in its own right. It acts as a faster, lighter version of Bitcoin, rather than trying to be its competition. On top of that, Litecoin has a dedicated development team that works on improving the network, and many of the network upgrades they created ended up being used on the Bitcoin network (such as SegWit and Lightning Network).

What Gives Litecoin Value?

Litecoin is programmed to have a finite supply of 84 million LTC. Similar to Bitcoin, Litecoin also reduces the block rewards that miners receive during its “halving” events, effectively reducing the rate at which new coins are introduced into the market.

Due to its predictable and finite supply, Litecoin is considered a scarce asset and thus derives value (partly) from its scarcity.

The other parts of the equation that grant Litecoin value are its usability and its network size (both in terms of miners and buyers/sellers).

Litecoin is traded on every major exchange in the world, including Kriptomat.

How Many Litecoin (LTC) Coins Are in Circulation?

There are currently 66,480,217 LTC in circulation, with miners getting rewarded with 12.5 LTC each time they process a block (every 2.5 minutes). The 12.5 LTC reward is, just like Bitcoin’s mining reward, subject to halving every four years, with the next Litecoin halving expected to occur in August 2023.

Litecoin has a limited supply of 84 million LTC, and will ultimately move on to rewarding its miners only with transaction fees once every single coin is mined.

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How Is the Litecoin Network Secured?

The Litecoin network is secured by its network of miners. Because it is a decentralized cryptocurrency, everyone can participate in the block validation process.

When it comes to the possibility of security breaches, people often think about 51% of attacks. Litecoin developers take security issues very seriously, and are known for not compromising on them.  Thanks to its vast, decentralized network of participants, coupled with the efforts of its developers, LTC is unlikely to succumb to these types of malicious network attacks.

How To Use Litecoin

With its transactions acting essentially just like Bitcoin’s – only faster – its greatest potential use case is for payments that are too small and/or too time-sensitive for Bitcoin’s network.

At the moment, Litecoin is supported in several thousand stores and businesses worldwide, and transacting with it is both quick and inexpensive.

How To Choose a Litecoin Wallet

There are many wallets that can store Litecoin. Depending on their need for security and functionality, users will choose the wallet that suits them. Kriptomat exchange is a great place to store your LTC, as it offers great functionality (buying, selling, exchanging for other cryptocurrencies) without ever compromising on security.

Let There Be Litecoin

Litecoin is a sibling to Bitcoin that opts for faster and cheaper payments while letting BTC handle large transactions. Its development team, led by Charlie Lee, has brought many groundbreaking discoveries to the crypto world.

Litecoin is certainly one of the cryptocurrencies with the most potential, and one that is already proving it has a real-world use case – something many projects can only dream of.

Litecoin FAQ

Is Litecoin Acting as Bitcoin’s Testnet?

No, Litecoin is a separate cryptocurrency. However, its features often ended up being implemented to Bitcoin’s code as well.

Who Is Litecoin’s Main Competitor?

While Litecoin opted to act as a friendly younger brother of Bitcoin, it still has direct competition, mainly Bitcoin Cash.

How To Buy Litecoin

Buying Litecoin (LTC) is as easy as going to our Litecoin Price page and clicking the “Buy Litecoin” button. Visit our guide on how to buy Litecoin.

How To Sell Litecoin

If you already own Litecoin (LTC) and hold it on the Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Litecoin Price

The current Litecoin price is EUR.

The 24-hour trading volume of Litecoin is EUR. Litecoin is currently ranked of all cryptocurrencies by total market capitalization, with a market cap of EUR. It has a circulating supply of Litecoin and the max. supply is 84 million Litecoin.

Your Crypto Adventure Awaits

We’ve made it as easy and exciting as possible to jump in and purchase Litecoin (LTC) and any other cryptocurrency. Our team is committed to offering the best products on the market, having taken everything we learned in 2020 about currency and crypto related products and fine tuning our technology.

Register now to begin your journey into the world of LTC and cryptocurrencies with Kriptomat!

If you’re experiencing any issues or have any questions at all, please don’t hesitate to reach our Customer Support Team. We’re always here to help!