When Bitcoin (BTC) was launched back in 2009, it revolutionized financial assets, because it was the first cryptocurrency in the world. The idea of a digital currency that doesn’t physically exist except in the form of a cryptographic private key on a blockchain network was so innovative that the whole world was caught by surprise.
Soon after BTC, numerous altcoin projects were launched but many of them ended up as failures, and only a selected few passed the test of time, managing to become immensely popular and amass a huge market cap. Litecoin (LTC) is one of those altcoins that’s been present on the market nearly from the beginning of cryptos.
While Bitcoin is often called digital gold, Litecoin is regarded as digital silver. Both of these cryptos were launched as a form of decentralized, digital cash that works with the help of a peer-to-peer network of system nodes that make it possible to facilitate fast transactions of cash between any two digital locations in the world.
Let’s take a closer look at what Litecoin is, how it works, what are the key similarities and differences compared to Bitcoin, and finally, how many litoshis make a single Litecoin token.
What is Litecoin?
Litecoin was launched in 2011, just two years after Bitcoin, and it was one of the first altcoins on the market. Ethereum (ETH), the most popular altcoin in the world, was launched another four years after LTC. The person behind the Litecoin project was Charlie Lee, a passionate poker player, MIT graduate, and former Google engineer.
When the US government cracked down on online poker websites in what became famous as the 2011 Black Friday Crackdown, Charlie Lee, who was already a huge Bitcoin enthusiast, decided to create a new cryptocurrency that would enable fast and reliable digital payments that aren’t controlled by any central authority such as government agencies.
Lee wanted to take all the best aspects of Bitcoin and create a lighter version of BTC, which would be suitable for facilitating faster transactions and payments. He wanted to create a more versatile cryptocurrency that wouldn’t have such robust network mechanisms as BTC.
In order to do so, Lee took the Bitcoin Core programming code and modified it a bit so he could launch Litecoin. This is how LTC was created and it soon became a widely adopted retail cryptocurrency because it turned out it was much more practical than paying in bitcoins.
When LTC was launched, Lee didn’t keep any coins for himself initially. Instead, he became a Litecoin miner and investor and bought or mined coins just like many other early crypto enthusiasts.
In 2013, Lee became a member of the Coinbase exchange core team up and remained one until 2017, when he left the company and decided to sell all of his litecoins. This prompted some criticism on behalf of the crypto community which accused him of not believing in Litecoin, but he explained that his move didn’t mean that he’s leaving the LTC project.
Charlie Lee remained the director of the non-profit Litecoin Foundation, responsible for the maintenance and development of the open-source Litecoin code.
How Does Litecoin Work?
LTC was designed to be faster than Bitcoin and more convenient for facilitating smaller transactions, suitable for everyday expenses, and buying various retail products or services. The fact that Litecoin was built using the Bitcoin Core code means that its blockchain has the same structure as the original Bitcoin blockchain.
The blockchain is a distributed public ledger of all transactions on the LTC chain. Anyone can track a transaction on the LTC blockchain and see its source address and destination address using a blockchain explorer such as Blockchair.
While the wallet addresses are all publicly visible, they provide a certain degree of anonymity to their owners, similar to BTC, because you don’t need to associate your personal information with your wallet address on the blockchain.
In terms of structure, the blockchain is built in the form of a linear string of data blocks that contain transaction data and are placed chronologically from first to last block. The first, genesis block of Litecoin was mined by Charlie Lee.
The working mechanism of LTC is basically the same as Bitcoin, and miners play an essential part in the Litecoin network. Each transaction on the blockchain needs to get verified by miners before it gets processed to its final destination. The role of miners is to verify transactions and get rewarded with freshly mined LTC for their role in the Litecoin ecosystem.
Litecoin is totally open-source and anyone from the LTC community can propose changes and improvements to the blockchain mechanism.
The LTC community has historically been more flexible and eager to implement blockchain upgrades compared to the BTC community. This resulted in the creation of the Litecoin Lightning Network for extremely fast transactions and the implementation of the SegWit (Segregated WItness) protocol that dumps all excess data from transactions. Both of these innovations were later also implemented within the Bitcoin Core programming code.
Litecoin vs Bitcoin: Key Similarities
Litecoin and Bitcoin have numerous similarities that are a result of the fact that both currencies used the same basic Bitcoin Core technology to power their blockchains.
Both cryptos use a proof of work consensus mechanism to validate transactions. This means that when you want to send some coins from one blockchain address to another, you can’t just instantly facilitate a transaction without any intermediaries because this way anyone could try and double-spend the same coins, pulling off scams and tricking vendors by spending the same funds twice.
The proof of work mechanism requires network nodes (miners) to complete complex mathematical tasks with the computing power of their crypto mining rigs in order to find an appropriate transaction hash that acts as proof of work that the transaction is really legit.
Once a corresponding hash is found by a miner, they disseminate the hash to the rest of the network nodes and several other nodes need to verify the proof of work before a transaction can get included in the next block of the blockchain and reach its final destination.
Just like Bitcoin, Litecoin is also a cryptocurrency with a hard cap, which means that there is a predetermined number of coins that can be put into market circulation thanks to the work of miners. While Bitcoin is capped at 21 million coins, Litecoin has a four-times higher hard cap of 84 million coins.
The automatic inflation control mechanism of both currencies is identical. It’s called halving and it’s used to control the mining difficulty of these cryptos by halving the block reward for each new blockchain data block, every four years. This is a built-in method to make Bitcoin and Litecoin more scarce over time.
Apart from the technology they use, BTC and LTC are also very similar in terms of project goals.
Both cryptos were created as digital cash that challenges the traditional financial system by providing users with assets that don’t rely on central authorities, banks, and government financial institutions. Unlike fiat money, BTC and LTC are currencies that transcend all borders and this was a feature that was revolutionary in the early 2010s.
Litecoin vs Bitcoin: Key Differences
Even though LTC and BTC have some huge similarities, there are numerous key differences that might not be visible right away.
For example, while Bitcoin uses the SHA-256 algorithm to hash new blocks, Litecoin uses a much different hashing algorithm called Scrypt. Bitcoin mining is known to require an enormous amount of electricity and computing power because miners need to find the appropriate 64-digit hash for each transaction. Trying out all the possible combinations and reaching the right one for a transaction requires so much power that very expensive ASIC miners proved to be the only machines that could mine BTC efficiently.
The Scrypt algorithm, on the other hand, enables LTC miners to verify transactions and mine Litecoin with their PCs and laptops because the algorithm was made specifically to allow lower grade computers to also participate in LTC mining with their CPUs and GPUs.
For a long time, Scrypt was considered to be ASIC-proof, but, nowadays, crypto equipment manufacturers have succeeded in creating special ASIC miners for Litecoin mining.
The LTC transaction speed is drastically shorter compared to Bitcoin because the block size and processing time were modified by Charlie Lee and the Litecoin developer team to make the currency fitter for fast retail transactions. While Bitcoin has a standardized block size of 1MB, Litecoin’s blocks can vary and they can be as small as a couple of tens of KB.
Also, a Bitcoin transaction takes around 10 minutes to get processed, compared to just 2.5 minutes for a Litecoin transaction.
This still isn’t as fast as cryptos like Ripple (XRP) that can process transactions in just a few seconds, but when LTC was launched in 2011, this was lightning fast, and don’t forget that Litecoin runs on a fully decentralized network in comparison to centralized traditional payment services like Visa or Mastercard.
So How Many Litoshi Make One Litecoin?
Remember how Bitcoin can be divided into smaller units called satoshis? Well, Litecoin has a similar system, because each LTC coin contains 100 million litoshis.
One Litoshi is the smallest unit of a single Litecoin. This makes it really easy for crypto investors to buy LTC on exchange platforms with fiat money without calculating how much fiat cash like USD they need to buy a certain number of full litecoins.
If you want to spend 1000 USD on Litecoin, you can buy it on a fiat-friendly exchange platform such as Coinbase or Binance and you’ll get a certain number of LTC which can be broken down into litoshis.
Bitcoin and Ethereum are known to have numerous crypto faucets online. These faucets are websites or gaming platforms that award visitors or players with a small number of certain cryptos each hour, day, or after a number of scored gaming points.
Litecoin is also a crypto that has a bunch of online faucets where you can get free Litecoin. You can check a thorough list of Litecoin faucets on Faucetpay.io.
LTC to USD Exchange Rate
Litecoin has managed to maintain its position in the top 20 cryptos by trading volume and market cap ever since its launch, so it’s pretty safe to say it can be a profitable investment, with various volatile market cycles and price changes.
In case you decide to invest in Litecoin, you can check the current Litecoin price and the LTC to US dollars exchange rate on Coinmarketcap in real-time.
A Few Final Words…
The crypto market has more than 14,000 cryptocurrencies according to Coinmarketcap but only the top one hundred crypto projects are the ones that make a real impact on the market with a high market cap and adoption rate.
Litecoin is considered one of the top veteran altcoins right next to Ethereum and Bitcoin Cash (BCH), so it’s safe to say that LTC is a project that will probably be around for a long time.