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What is Litecoin? Blockchain beginner’s guide

Learn more about Litecoin and see why it’s sometimes called “the silver to Bitcoin’s gold.”

IconSymbolInitial release dateAlgorithm typeMax. supply
Litecoin iconLTC, ŁOctober 7, 2011scrypt84 million LTC
Disclaimer: This information is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk. Do your own research and seek financial advice before buying. Please check with providers if their services are available in your state.

What is Litecoin (LTC)?

Litecoin was created in 2011 as a fork of Bitcoin. Since then, it has grown from a price of zero to a multi-billion-dollar project.

Litecoin has attracted a lot of attention as one of the world’s best-performing cryptocurrencies, price-wise. Unlike most other alternative cryptocurrencies, or altcoins, Litecoin prices outperformed Bitcoin for several years after its launch, cementing its position as one of the world’s best-known cryptocurrencies.

Functionally, it can be succinctly thought of as a Bitcoin quarter. Its total supply is four times higher than Bitcoin’s, but it is created four times faster. The functional result is a cryptocurrency that’s about four times faster to transact with than Bitcoin, with fees that are often a quarter as much as Bitcoin’s.

A brief history of Litecoin

Litecoin was created by ex-Google engineer Charlie Lee in October 2011, with the goal of creating a more efficient version of Bitcoin. At the time of its creation, he described it as “the silver to Bitcoin’s gold.”

To create it, he forked Bitcoin. Essentially, Lee modified the Bitcoin DNA and then released his new creation into the wild for people to start mining if they thought it had a future. Two things to note:

  • First, Lee quartered Bitcoin by raising its supply and reducing its block time to create a faster and cheaper coin.
  • Second, he changed Bitcoin’s mining algorithm to a new system called scrypt.

Pronounced ess-crypt, Litecoin is the third cryptocurrency to ever use scrypt. The first was a long-dead cryptocurrency called Tenebrix, whose creators “pre-mined” the coin in an effort to accumulate a large portion of it for themselves before releasing it publicly.

The second was called Fairbrix, in a nod to its predecessor. It was also created by Lee, but it was plagued by technical problems.

Litecoin was Lee’s next attempt, which successfully solved the technical problems of Fairbrix and created the first fair and functional scrypt cryptocurrency.

Today’s Litecoin price

Litecoin’s two innovations explained

Litecoin brought two key innovations to the table when it emerged in 2011.

  1. It reduced block times and increased total supply compared to Bitcoin.
  2. It used a scrypt mining algorithm.

The first change was very simple. It required no particular innovations and was almost as easy as simply substituting some numbers in the Bitcoin code. The second innovation the use of scrypt was more complex.

Why Litecoin uses scrypt

When Bitcoin was first created, people would mine it with home computers. But over time, people started making high-powered, specially designed machines specifically for mining Bitcoin.

Miners using these specially-made machines started outcompeting home crypto miners and began professionalizing the cryptocurrency mining business. This didn’t sit well with people who felt that crypto mining should be for everyone, not just for well-funded professional miners.

At the same time, there were growing concerns about how much energy Bitcoin mining would require if it grew into an enormous global currency.

Scrypt was intended to solve both of these problems.

  • It let you profitably mine cryptocurrency at home. Scrypt mining is deliberately memory-intensive. At the time of Litecoin’s creation, it was much more difficult and expensive to create a specialized cryptocurrency mining machine with enough memory to outperform home computer mining
  • It’s more energy-efficient than Bitcoin mining. Scrypt mining is energy efficient, in that it allows for the creation of more “mining power” for the amount of energy consumed than Bitcoin does.

The problems with Litecoin

The benefits Litecoin enjoyed in 2011 don’t apply today, and with the passing of time, both of scrypt’s advantages have disappeared.

  • People created specialized scrypt miners. The deliberately memory-intensive design of scrypt only delayed, rather than prevented, the industrialization of Litecoin mining. It’s no longer realistically possible to profitably mine Litecoin at home.
  • Receive payment in Litecoin. In the real world, energy-efficient crypto mining just means miners end up using more machines to consume the same amount of energy, instead of consuming less energy.

As for Litecoin’s other advantage a faster block time this is completely arbitrary. There’s nothing stopping another cryptocurrency from improving on that with an even faster average block time.

But even though Litecoin’s initial points of difference are no longer relevant, there are still reasons people like Litecoin.

  • Despite its volatility, Litecoin has consistently retained a healthy price tag. Litecoin is an undeniably cheap and fast way of transferring monetary value anywhere in the world.
  • There are plans to develop Litecoin further and to introduce useful new features.
  • Litecoin has a much longer history than most other cryptocurrencies in existence today.

What to consider before buying Litecoin

Before buying Litecoin, you may want to consider the following:

  • Whether it will be able to develop fast enough to remain at the forefront of the cryptocurrency space.
  • Whether Litecoin’s foundations a fast block time and scrypt mining are still relevant today.
  • Whether being “the silver to Bitcoin’s gold” is enough to justify Litecoin’s current price.

Where to get Litecoin

Litecoin is available on almost every cryptocurrency exchange, and it has enjoyed a position in the top 10 largest market cap cryptocurrencies for most of its lifeline. Compare exchanges on deposit method, fiat currency support and more to find the right fit for your Litecoin purchase.

Name Product Deposit methods Fiat Currencies Cryptocurrencies
eToro USA LLC Cryptocurrency Trading
Wire transfer, Online banking
USD

25
cryptocurrencies

Disclaimer: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

Copy the trades of leading cryptocurrency investors on this unique social investment platform. Non-US residents can read our review of eToro's global site here.
Robinhood Cryptocurrency Exchange
Bank transfer, Cash, Debit card
USD

17
cryptocurrencies

Trade a handful of leading cryptocurrencies with this easy to use mobile app.
Gate.io Cryptocurrency Exchange
Cryptocurrency
USD, EUR, GBP, HKD, SGD, AUD, CHF, MXN

267
cryptocurrencies

Finder exclusive: New users get $90 worth of Gate.IO points and an airdrop of $5 in random tokens if trade volume exceeds $100 in their first week. T&Cs apply.
A feature-rich exchange with over 700 tokens including derivatives, yield farming and lending products.
KuCoin Cryptocurrency Exchange
Cryptocurrency, PayPal, Wire transfer, Credit or Debit Card, SEPA
USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more

247
cryptocurrencies

Finder Exclusive: Get up to 10 USDT in trading fee rebates for signing up and making a deposit, and up to 30 USDT in trading fee rebates after buying with fiat. T&Cs apply.
Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Coinmama Cryptocurrency Marketplace
Bank transfer, Credit card, Debit card, SWIFT, SEPA
USD, EUR, AUD, CAD, GBP, JPY

10
cryptocurrencies

Founded in 2013, CoinMama lets you buy and sell popular cryptos with a range of payment options and quick delivery.
Coinbase Digital Currency Exchange
Bank transfer (ACH), Credit card, Debit card, PayPal, Bank transfer (SEPA)
USD, EUR, GBP, CAD, MXN, HRK, CZK, DKK, CLP, BGN & 10+ more

63
cryptocurrencies

Buy and sell major cryptocurrencies on one of the world's most renowned cryptocurrency exchanges.
Webull Cryptocurrency Exchange
Bank transfer (ACH), Wire transfer
EUR, GBP, USD, CHF, JPY, CAD, HKD, INR, CNY, AUD

8
cryptocurrencies

Trade a handful of leading cryptocurrencies on this mobile app with as little as $1 per trade, plus access to stocks and ETFs.
Crypto.com App
Credit card, Cryptocurrency, PayPal, TransferWise, SEPA
USD, AUD, CAD, CHF, EUR, GBP, NZD, SGD, JPY, ZAR & 9+ more

125
cryptocurrencies

Get 0% fees on credit/debit card purchases for 30 days after signup.
Buy 80+ cryptocurrencies, earn up to 8% on holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform.
Gemini Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, CAD, EUR, GBP, SGD, HKD

41
cryptocurrencies

Trade bitcoin, Ethereum and more at a US-based exchange where payments can be made in USD.
SoFi Cryptocurrency Exchange
SoFi Cryptocurrency Exchange
Bank transfer
USD

21
cryptocurrencies

Instantly purchase a handful of leading cryptocurrencies with the SoFi app, which also insures your coins against potential hacks or theft.
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Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.
Disclosure: At the time of writing, the author holds BTC, BNB.

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2 Responses

    Default Gravatar
    JessicaFebruary 21, 2018

    How do i transfer my paper wallet back to coinbase?

      Avatarfinder Customer Care
      nikkiangcoMarch 12, 2018Staff

      Hi Jessica!

      Thanks for your questions and for visiting finder.

      According to the Coinbase website, Coinbase wallets currently do not support a wallet import feature. If you have paper wallets, private keys, wallet.dat files, or brain wallets, they can be imported into another wallet (Bitcoin QT, Electrum, Multibit, Armory, Blockchain.info, etc) before being sent to your Coinbase wallet. The steps to do this will vary depending on the wallet you are using.

      Hope this information helped you with your concern.

      Thank you!

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