Litecoin (English: Litecoin, or LTC) is a cryptocurrency designed for instant transactions at a low cost. It runs on open source software developed by the Litecoin developer community and launched in 2011 as an "altcoin" or alternative to Bitcoin based on some changes to Bitcoin's source code.
To help you decide if Litecoin is right for your cryptocurrency portfolio or trading strategy, here's the history of Litecoin, how it works, and how to buy it.
Creator of Litecoin
The creator of Litecoin is San Francisco software developer Charlie Lee. He became acquainted with Bitcoin at a time in his life when he was a successful software engineer at Google. The company's internal rules encourage employees to develop independent projects; they can allocate up to 20% of their total working time for these purposes.
It was here that a graduate of the Massachusetts Institute of Technology decided to create a lightweight version of Bitcoin. On October 13, 2011, he launched an alternative version of the algorithm and presented the open source code of the new platform for public discussion.
History of cryptocurrency
In 2011, Litecoin was not the first alternative version of Bitcoin: many programmers tried their hand at creating their own cryptocurrency code, but there were no successful solutions. Charlie Lee noticed technical problems in the Bitcoin system that made it difficult to cope with the huge number of transactions and led to a network reboot. He made design changes to the code that resolved issues regarding the speed of transaction confirmation and the ability to handle large volumes.
The Litecoin network operates with the simultaneous functioning of many hardware/software system components that send requests to the server. It has improved security and performance indicators not only for individual nodes, but also for the entire system as a whole.
Litecoin is a peer-to-peer electronic money transfer system. When Segwit support was implemented on the network, scalability problems were successfully resolved, which brought Litecoin to a leading position in the popularity rating among users. You can analyze the dynamics of its value:
- in the fall of 2013, the LTC rate doubled per day;
- in the spring of 2022, the cost of 1 LTC has already increased more than 10 times (to $50);
- in the winter of the same year, more than $300 was already paid for 1 LTC.
How to speed up a transaction
Due to the increased popularity of cryptocurrencies, the networks of the most famous coins have ceased to cope with the increased load on them. The block size is limited, and the number of transactions has become too large to fit into one block. Queues of transactions began to form. You may not even wait for the payment to be processed. Fortunately, there are several ways to speed up this process:
- Increase in commission size. Miners choose and make payments with the highest commission first because it is profitable for them. As a rule, they postpone transactions with the lowest commission “for later”.
- Increasing the transfer size. The status of the transaction depends on its value in coins. The higher it is, the higher the status. High status transactions are processed faster.
- Conducting open operations. When information about participants is open, the transaction is processed faster.
- Using multi-signature. A mechanism for creating an address, the management of which requires a specified number of signatures from a given list.
Litecoin was conceived as a lighter version of Bitcoin. He adopted all the principles of work from him. Information about transactions is open, accessible to all users and is contained in the blockchain. To verify payments, you can use the same services as for checking other altcoins.
Differences and similarities between Bitcoin and Litecoin
There are some similarities between Bitcoin and Litecoin cryptocurrencies:
- first of all, this is the fact that both coins do not have a center of management and regulation, which means that both projects are completely decentralized;
- all monetary transactions carried out on both platforms are anonymous;
- all network transactions are irreversible;
- the volume of emission of cryptocoins is known in advance and is limited in quantity;
- Coin mining is based on a cyclic hashing mechanism.
The differences between cryptocurrencies are given in the table:
| Parameter | Bitcoin | Litecoin |
| Generation of 1 block | 10 minutes | 2.5 minutes |
| Recalculation of computational complexity | 1 time every 10 minutes | 1 time every 3.5 days |
| Proof of work completed | SHA-256 | Scrypt |
| Reduced rewards for miners | 2 times every 840,000 blocks | 2 times every 210,000 blocks |
| Total number of coins | 21,000,000 BTC | 84,000,000 LTC |
How does the Litecoin blockchain work?
Cryptocurrency Litecoin (LTC) is the first fork of the legendary Bitcoin, which was released in October 2011. The Litecoin blockchain is similar to the blockchains of other cryptocurrencies. Miners create new blocks according to specific conditions and, for a set fee, enter information about transactions. However, unlike the Bitcoin network, where the creation time of a blockchain block takes 10 minutes, in the LTC system the indicator is 2.5 minutes.
Litecoin transactions can be tracked, despite the decentralization of the crypt and functioning on the blockchain, since transactions are recorded in the blocks of the chain. The distributed blockchain database is hosted on thousands of miner PCs involved in the Litecoin network. Separately, block elements are of no value - only when combined, a complete network is formed.
Algorithm and emission
The functionality of the Litecoin system and its protection from double spending is ensured by the cyclic hashing method. This is the process of mathematically calculating the required numerical hash value, at which the condition of the task will be considered fulfilled. When the correct parameter is found, the node forwards the generated block to the rest of the network nodes, which also check the resulting solution for errors. If the option is found to be correct, the found block is written to the registry and its hash will be included in the next block of the blockchain.
The speed of finding the coveted hash number directly depends on the productive capacity of the miners’ computing equipment and is determined by the ratio of KH/s of one node to KH/s of the entire network. For finding each new block in the Litecoin network, miners receive their reward: it started at 50 LTC and every 840 thousand blocks its size decreases by 2 times. Currently the payment is 25 LTC.
Proof of work on the Litecoin platform is determined by the more modern Scrypt algorithm. Unlike its predecessor, the Sha-256, it requires serious hardware power and does not allow dedicated ASIC chips to have a significant advantage over users' simple CPUs or GPUs. Clients can multitask and not affect the performance of the entire system, which significantly reduces the efficiency of scrypt-ASIC.
The Scrypt cryptographic algorithm relies on a large amount of mathematical calculations and requires instant access to huge amounts of memory. Modern graphics processing units (GPUs) have all the necessary resources and are fully suitable for Litecoin mining, although they are inferior in performance to central processing units (CPUs). For more successful mining, participants join into pools, in which both the load and the reward are divided proportionally.
Cranes
Free Litecoin
Free Litecoin is a specialized resource in the form of an Internet site, a platform through which litecoins and other cryptocurrencies are distributed free of charge while on it. These are the so-called “faucets” for cryptocurrencies. The essence of this scheme is simple: the user is on a resource, on a website page (having downloaded the corresponding application to a smartphone), and provides part of the computing power of his computer for cryptocurrency mining. Can serve as a nodal point (node) for conducting transactions on the network (blockchain). For this, the user receives a certain (fixed) reward in the form of crypto coins.
One of these resources is the “Free Litecoin” faucet. The amount of remuneration for every 1 hour spent in the resource (for a registered user) is about 4.4. rubles This is not very much. But, if, for example, you keep the application of this resource open on your smartphone for one day, then the amount of more than 100 rubles may already accumulate.
Also, every hour on this platform there is a drawing (lottery) of almost 3 litecoins among registered users
Faucet Litecoin
A similar resource that provides free distribution of Litecoin coins. The whole process of receiving free coins looks like a lottery draw, where every user can participate for free by first registering. Such lotteries are held hourly. The official website is located at the link.
List of other faucets
- getfree.co.in
- Faucet Hub
- xfaucet.net
- ref-hunters.ch
- cosuperquick2018
- freebitcoin.win
- 3btc.org
How to check a Litecoin transaction
Any digital currency has no physical representation. Its presence is a set of computer symbols on the balance of your wallet. Monetary transactions on the Litecoin network are not carried out instantly. To ensure robust protection against tampering or double spending, all internal transactions are confirmed by six previous blocks. This is time consuming.
Many users are wondering: how can they check their money transfer? Checking the status of your transaction is quite simple using one of the services that can track any cryptocurrency money transfer. For LTC transactions these are the sites:
- bchain.info/LTC;
- chain.so/LTC.
To see the status of the transaction you are interested in, you do not need to register or go through account verification. It is enough to enter the hash of the operation, the address of the Litecoin wallet or the block number in the search field.
How to buy Litecoin
As a popular cryptocurrency, Litecoin is widely available and supported by a large cryptocurrency community. If you've ever bought Bitcoin, it's an almost identical process, but you'll need to look for the LTC symbol in your trading app rather than BTC for Bitcoin.
Major cryptocurrency exchanges such as Coinbase, Binance and eToro support Litecoin transactions.
Wallets
Litecoin is supported by many different cryptocurrency wallets. Here are the options you can choose from.
| Wallet type | Wallet name |
| Hardware wallets | CoolWallet S, Opendime, Ledger Nano S, Trezor, ELLIPAL, BitBox |
| Mobile /Web wallets | Litewallet, Litecoin Core, Electrum-LTC, Liteaddress, Jaxx, Exodus, Crypto.com |
| Wallet with interest payment | Celsius Network |
Transaction time
While the Litecoin network boasts near-instant transaction confirmations, if you make an LTC transaction on a cryptocurrency exchange, it will take a little longer for it to reflect in your account. For example, both Kraken and Gemini require 12 confirmations for LTC transactions, which takes about 30 minutes.
Lightning Network
The biggest inconvenience of the Bitcoin network is not only the length of time it takes to confirm transactions, but also their rather high cost. Due to the fact that the network is experiencing enormous loads, commission fees for processing money transfers have already reached $4.5, which is becoming a negative parameter for cryptocurrency.
It is to solve such problems that the latest Lightning Network technology was developed, the key feature of which is the ability to create bidirectional channels in the payment scheme. The commission on the Lightning Network is considered to be near zero.
The best way to understand this technology is with an example:
Let there be two payment system objects: Tanya and Andrey. They intend to send money transfers to each other frequently, so they want to create a bidirectional payment channel. To do this, they credit 30 LTC to an address with a “2 of 2” multisig. Any spending from this address is possible only if there are two signatures: Tanya and Andrey.
Additionally, a secret string of numbers and a hash are created for them. Tanya creates a new commitment transaction, through which she sends herself 10 LTC, and sends the remaining 20 LTC to another multi-signature address. Since the address has a CSV lock, Andrey will only be able to access them after a thousand blocks. The address can be unblocked by the second party (Tanya), but only if she has a hash from the secret string of numbers that Andrey gave her.
The signed commitment transfer does not enter the network, but is transferred to Andrey, who forms the opposite transaction: he sends 20 LTC to himself, and 10 LTC to another address with a multisignature. Similar to the previous description, Tanya will be able to access the amount only after a thousand blocks, or the account can be unlocked by Andrey, knowing the hash of Tanya’s secret string.
When the exchange of obligations and hashes has occurred, the transaction enters the Litecoin blockchain and the channel becomes open.
Features of the Lightning Network are as follows:
- Unconfirmed transactions do not immediately enter the network; they can be stored on the local computers of participants and enter the blockchain as needed.
- Double spend protection mechanism: If 2 transactions have the same output, only one of them can receive confirmation.
- Multi-signature addresses, which become accessible only if you have several private keys (2 out of 3, 10 out of 15, 20 out of 20, etc.).
- Lightning Network temporary bans: These can be absolute (CLTV) or relative (CSV). The first type blocks coins until a certain time, the second - until a certain number of blocks have passed.
- Fundamental basis: secrets and hashes. A secret is a unique set of symbols that is impossible for even computers to guess. A hash is a transformation (hashing) of a secret, another of its meanings. Knowing the secret, you can create a hash, but using a hash it is impossible to determine the secret. This is a one-way operation that reliably protects all internal network operations.
Commissions
The amount of commission in the Litecoin system does not depend on the value of the transaction, as is usually the case in payment systems working with fiat, but on its size in bytes. This is logical, because the more voluminous the information, the more resources are spent on processing it. But more recently, Litecoin developers introduced the ability to conduct transactions without commissions.
This became possible thanks to the introduction of the Lightning Network protocol. In the fall of 2022, the founder of the network, Charles Lee, received 0.01 LTC worth of litecoins from Jack Mollers, the developer of the new protocol. The operation was carried out without commission.
Charles Lee.
The technology is a channel that works, as it were, on top of the blockchain, allowing transactions to be carried out according to its own rules, namely, without charging a commission. Such transactions are carried out instantly, but the funds remain in the channel. Payment information will not be viewable on the blockchain until the recipient withdraws it from the channel. Only after this the operation will be recorded in the blockchain.
The Lightning Network is not new; it has been successfully used in other less popular cryptocurrencies. But for Litecoin it became a fresh breath of air. Thanks to its implementation, it was possible to attract the attention of investors. And the very opportunity to transfer money without commission is very attractive to users.
List of wallets
For each digital coin you need to have your own digital wallet. They can be stored in individual wallets or in multi-currency vaults. The most secure options are those that store private keys on the local computer or hardware device.
Depending on your needs, rhythm of life and frequency of use of cryptocoins, you can choose different types of storage for digital cash:
- desktop;
- mobile;
- online;
- hardware;
- paper
You can read the full article “Litecoin wallets: where is the best place to store LTC coins”, in which we reviewed the most reliable and popular options.
Litecoin Wallets
In order to use the Litecoin crypto coin as a means of payment, exchange, or for investment purposes (long-term storage), there are several proven and working options.
- Option one is to use the official wallet of the Litecoin network. This is an Internet platform called Litecoin Core and located at the official Internet address www.Litecoin.org. This platform has a special application, by downloading which to your computer you can open your cryptocurrency wallet and store on it both native Litecoin tokens and other crypto-assets supported by the platform. You can read his detailed review in this article.
- The second option is to open a wallet for storing and using the LTC crypto token as a payment asset on those cryptocurrency exchanges that support this option. Such cryptocurrency exchanges are popular trading platforms - Binance, Huobi, Coinbase, Bitfinex, EXMO and others.
- The third option is to use the capabilities of specialized Internet services for storing cryptocurrency assets. Platforms that support transactions with Litecoin can be chosen - Jaxx, Electrum (custom version of the wallet for LTC), Exodus, Block.io or a reliable resource from the creators of the Ripple project - GateHub. What makes such services convenient is that they have mobile applications for smartphones. You can use these crypto wallets to make payments using cryptocurrency while traveling. What especially needs to be noted here is that such specialized platforms for storing cryptocurrencies have a very high degree of cryptographic protection and are an order of magnitude more reliable than many well-known crypto exchanges.
- Option four is cold storage wallets or hardware wallets. They are created on the basis of special USB flash cards. The most popular and reliable at the moment are wallets from manufacturers such as Trezor or Ledger (S and M). The only and significant drawback of these means of storing cryptocurrencies is that if such a wallet is lost, it is almost impossible to restore the account.
- The fifth option is wallets made on paper or “paper wallets”. Using special applications (such as liteadress.org), the account of the cryptocurrency user, its owner, is encoded in the form of a special barcode or QR code. It is then printed on suitable paper and stored in a safe place. This wallet is 100% protected from any hacking. However, as with the use of hardware media, its loss means a complete loss of access to your cryptocurrencies.
Mining Features
Litecoin is the third cryptocurrency in the world in terms of capitalization. Naturally, many users are interested in how it can be mined.
The Litecoin system uses the Scrypt algorithm to prove work done. It requires fast access to huge amounts of memory, so the most profitable method will be using GPU processors.
For more profitable mining, it is better to join mining pools and participate in the joint generation of coins. Cloud mining is also considered very popular, which allows you to receive coins on rented servers.
We have a separate article on this topic, which describes all possible options for Litecoin mining. Follow the link and find out the best way to get LTC coins and which sites are in great demand among users in 2022.
On which exchanges is LTC traded?
If Bitcoin is digital gold, which is very expensive for use in everyday life, then Litecoin is digital silver. This is a very popular cryptocurrency, which ranks third in terms of capitalization. It is presented on all popular exchanges and online exchangers. You can buy Litecoin on the following resources:
- HitBTC;
- cryptonit;
- LocalBitcoins;
- Kraken;
- Exmo;
- BTC-e;
- Binance;
- Bitflip;
- Yobit.
In terms of trading turnover, the leading cryptocurrency platforms are OKEx, Upbit, GDAX and Bitfinex.
About transaction confirmation
As soon as the operation is included in the blockchain, the next stage begins - confirmation of the Litecoin transaction. 6 blocks must be created (in terms of time - 15 minutes), which eliminates the possibility of repeated spending. If the transaction is a payment for a service/product, the number of blocks created is reduced to two, and no more than 5 minutes are spent approving the transaction. The seller has the right to independently regulate the number of blocks required to confirm the operation.
If the purchase price is insignificant, it is possible to reduce the number of blocks to increase the speed of the transaction. If approval does not occur, the crypto is credited back to the sender’s balance.
Development plans and prospects
Although the price of the cryptocurrency is not yet close to its December record of $375, it is still firmly on its feet and continues to interest investors. Its creator, Charlie Lee, notes that the main indicator of the success of the project is not the cost of the coin, but the dynamics of its use in trading operations.
You can analyze the graph below, which contains comparative statistics of various cryptocurrency transactions. Transactions with Litecoin are marked in red:
Demand largely determines the competitiveness of a currency. The value of the coin is based on it.
Litecoin in Qiwi, Payeer and AdvCash
In order to carry out basic operations with cryptocurrencies - depositing and withdrawing fiat money (rubles) to crypto exchanges, exchangers or faucets, in addition to traditional banking services and cards, you can use the capabilities of electronic payment systems - Qiwi, Payeer and Adv Cash.
Such systems can be used to transfer money for the purpose of purchasing cryptocurrency on exchanges such as Binance, EXMO, etc. The only drawback of such systems is the relatively large commissions, reaching 10% of the transfer amount.
