Litecoin is a virtual cryptocurrency that was created with the principal purpose of providing an alternative to fiat money and ultimately become a direct competitor of Bitcoin by attempting to address Bitcoin’s shortcomings.
Litecoin is described as a peer-to-peer virtual currency fueled by the Litecoin blockchain. Litecoin’s blockchain is a decentralized open source, a global payment network that is fully decentralized, removing intermediary control, as enjoyed by banks, central banks, and governments.
Unlike fiat money, there are no physical Litecoins, just balances that are recorded on Litecoin’s decentralized, public ledger.
Litecoin was created to compete against Bitcoin and other true cryptocurrencies to become the primary alternative to fiat currencies by delivering an instant payment mechanism.
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Litecoin was created by Charles Lee and released in 2011, with a finite number of Litecoins, totaling 84 million.
Founder Charlie Lee sold his entire holding of Litecoin on 20th December 2017, with the intention to remove any perceived conflict of interest and to deliver a truly decentralized cryptocurrency.
The creation of each individual Litecoin comes from mining, which is a reward mechanism for miners involved in the verification of transactions on Litecoin’s blockchain.
Litecoin blockchain is the key driver behind Litecoin, a decentralized ledger that is updated instantaneously across all users, with transaction times and fees dependent upon the speed at which miners are able to verify transactions.
Some distinct differences and characteristics of Litecoin include:
- There are no physical Litecoins, only virtual.
- Unlike fiat currencies, where governments and central banks are able to print more money, there are a finite number of Litecoins.
- The very nature of Litecoin’s decentralized blockchain means that the payment system runs 24-hours a day, with no downtime and has no restrictions on where and to whom Litecoin can be sent.
- A new block is generated on the Litecoin blockchain every 2.5 minutes, which is 4x as fast as Bitcoin.
- The Litecoin blockchain is able to handle higher transaction volumes than Bitcoin, due to the more frequent block generation, allowing merchants to get faster confirmation times.
- Litecoin uses a script for its proof-of-work algorithm, requiring significantly greater processing power.
