The goal of Litecoin is to be the “silver” to bitcoin’s “gold,” but how does it differ from the first cryptocurrency?Satoshi Nakamoto created bitcoin, the world’s first cryptocurrency, in 2009. The code is open source, which means that anyone can modify it and reuse it in other applications. With varied degrees of success, many cryptocurrencies have debuted with modified versions of this code.
Litecoin was launched in 2011 with the intention of serving as the “silver” to bitcoin’s “gold.” After bitcoin, ethereum, XRP, tether, bitcoin cash, and bitcoin SV, Litecoin has the seventh greatest market valuation of any mined cryptocurrency at the time of writing.
Litecoin, like bitcoin, is a cryptocurrency that is created through mining. Former Google employee Charles Lee founded Litecoin in October 2011. Its conception was motivated by a desire to improve upon bitcoin. The main distinction for end-users is the 2.5-minute block generation time, as compared to bitcoin’s 10-minute block generation time. Charles Lee previously worked for Coinbase, one of the most well-known bitcoin wallets on the internet. He now spends his time working for the Litecoin Foundation.
However, litecoin has a lot more significant distinction from bitcoin for miners and aficionados, and that is its alternative proof of work method. The SHA-256 hashing method is used by Bitcoin, and it entails calculations that can be considerably sped in parallel computing. This trait is what has sparked a fierce competition in ASIC technology, resulting in an exponential growth in bitcoin’s difficulty level.
Litecoin, on the other hand, employs the scrypt algorithm, which was initially referred to as s-crypt but is now pronounced as’script.’ This method uses the SHA-256 algorithm, but its calculations are significantly more serialised than the SHA-256 algorithm used in bitcoin. Large volumes of high-speed RAM, rather than sheer computing power, are preferred by Scrypt. As a result, scrypt is referred to as a’memory difficult problem.’
Because there is (so far) no ASIC technology for this method, the consequences of employing scrypt mean that there hasn’t been as much of a ‘arms race’ in litecoin (and other scrypt currencies). However, owing to companies like Alpha Technologies, which is already taking preorders, this is about to change.
To illustrate the gap in hashing strength, the bitcoin network’s overall hashing rate is over 20,000 Terra Hashes per second at the time of writing, whereas litecoin’s is just 95,642 Mega Hashes per second.
For the time being, litecoin mining rigs that are considered “state of the art” are specialised PCs with numerous graphics cards (ie: GPUs). These devices are capable of doing the scrypt calculations and have access to lightning-fast memory integrated into their circuit boards.
There was a time when GPU mining for bitcoin was a viable option, but ASICs have rendered this method obsolete.
The key distinction between litecoin and bitcoin is that litecoin can confirm transactions significantly faster. The following are the ramifications of this:
Because to its speedier block generation, Litecoin can manage a bigger volume of transactions. If bitcoin were to try to match this, it would necessitate considerable changes to the code that is currently operating on the bitcoin network.
Because of the higher block volume, the litecoin blockchain will be proportionally larger than bitcoin’s, with more orphaned blocks.
When both networks have the same hashing power, the faster block time of litecoin minimises the likelihood of double spending assaults.
A retailer would only have to wait five minutes for a minimum of two confirmations, whereas with bitcoin, they would have to wait ten minutes for only one confirmation.
Many people active in bitcoin consider transaction speed (or faster block time) and confirmation speed to be moot considerations because most businesses would enable zero-confirmation transactions for most purchases. It’s important to remember that a transaction is instantaneous; the network just confirms it as it propagates.