Litecoin (LTC) was one of the first blockchain networks and cryptocurrencies, originally aiming to be faster and more efficient than Bitcoin. Learn about Litecoin and what makes it different from other cryptocurrencies, and discover more about the price of LTC.
How does Litecoin (LTC) work?
Litecoin was created as an alternative to Bitcoin, with the intention of enabling faster and cheaper cryptocurrency payments. The two blockchain networks share many similarities, with Litecoin previously serving as a testnet for Bitcoin.
Unlike Bitcoin, Litecoin utilises Scrypt, an algorithm designed to prevent large-scale mining operations from exerting excessive control over the network, thus increasing decentralisation.
Litecoin (LTC) is one of the earliest and most widely recognised altcoins. It has a total supply of 84 million coins, quadruple that of Bitcoin’s 21 million. In addition, at 2.5 minutes, Litecoin has a faster block time than Bitcoin, meaning that Litecoin can create a new block quicker than its rival. This allows on-chain transactions to be processed more quickly, enabling lower fees.
Litecoin is designed to serve as a medium for everyday transactions, as well as a store of value. But what exactly is Litecoin, how does it work, and what does the future look like for LTC?
“Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.”
Litecoin.org
What makes Litecoin different?
Litecoin stands out in the crypto market by closely following its roots as a direct fork of Bitcoin. Due to similarities between Bitcoin and Litecoin’s codebases, the latter is able to benefit from the former’s enhanced security.
However, Litecoin has attempted to differentiate itself from Bitcoin through the implementation of unique features, such as MimbleWimble, a blockchain protocol that enhances network performance and increases a user’s control over their financial privacy.
With MimbleWimble, Litecoin users can make confidential transactions, ensuring that addresses and amounts remain hidden from public view. Litecoins can also be moved into and out of Mimblewimble Extension Blocks that run parallel to the main Litecoin chain. Furthermore, MimbleWimble also reduces the footprint of transactions on the blockchain by removing unnecessary data, making the network faster and more efficient.
Tip: Litecoin is often referred to as the “silver to Bitcoin’s gold” due to its lower value and use in smaller-value transactions.
Litecoin is able to seamlessly integrate with the Lightning Network, a secondary network layer utilised by Bitcoin for small-value transactions.
What is the Litecoin price and forecast for the future
As one of the first altcoins ever created, Litecoin’s price history goes back almost as far as Bitcoin’s . In fact, historic Litecoin price moves provide an indication of how the entire crypto market has fared over the years, with new all-time highs being hit in 2017 and 2021.
| Year | Start Price | Mid-Year Price | End Price | Percentage Change |
|---|---|---|---|---|
| 2014 | – | – | $2.72 | – |
| 2015 | $2.72 | $4.09 | $3.48 | +28% |
| 2016 | $3.48 | $4.19 | $4.33 | +24% |
| 2017 | $4.33 | $40.40 | $232.10 | +5260% |
| 2018 | $231.67 | $81.50 | $30.47 | -87% |
| 2019 | $30.46 | $122.11 | $41.34 | +36% |
| 2020 | $41.33 | $41.43 | $124.69 | +202% |
| 2021 | $124.67 | $144.14 | $146.51 | +18% |
| 2022 | $146.54 | $53.70 | $70.00 | -52% |
Past performance is not an indication of future results
Source: Yahoo! Finance
In the past, Litecoin has focused on being a cheaper alternative to Bitcoin as a means of exchange, but the development of layer 2 Bitcoin protocols, such as the Lightning Network, has made this less necessary.
However, Litecoin can still fulfil a useful role in crypto if it can continue to differentiate itself from Bitcoin. If it manages to do so, there is potential that the price of LTC can rise in line with the wider cryptocurrency market in the future.
Who created Litecoin?
Litecoin, introduced in October 2011 by Charlie Lee, an ex-Google engineer, was originally envisioned as a simple fork of Bitcoin’s source code. It aimed to retain many of Bitcoin’s strengths, while optimising it for use as a medium of exchange.
For Proof of Work (PoW) networks, developers will often conduct a premine, which involves creating and setting aside a certain amount of cryptocurrency tokens before making them publicly available. To ensure a fair launch, Litecoin conducted a limited premine of 150 coins to promote early participation.
Since its launch, Litecoin has served as a testnet for Bitcoin. For example, in 2017, the Segregated Witness (SegWit) protocol was activated on the Litecoin network. Because of Litecoin and Bitcoin’s relatively slow block-time, SegWit was designed to divide transactions into two, thus creating more space in a block and allowing more transactions to be added to the blockchain. After seeing success on Litecoin, SegWit was then implemented on the Bitcoin network.
In June 2017, Charlie Lee joined the Litecoin Foundation, the organisation responsible for overseeing the Litecoin project and funding the development of Litecoin Core. Around this time, Lee also stated that he had sold the remainder of his Litecoin holdings.
Final thoughts on investing in Litecoin
Some experts believe that Bitcoin’s Lightning Network eliminates the necessity for Litecoin as an alternative method of payment. However, there remain several unresolved concerns regarding Bitcoin’s scalability solutions, and it is evident that handling low-value payments on Bitcoin remains a challenge.
This suggests that Litecoin may continue to have a relevant role in the future, although this depends on its ability to distance and differentiate itself from Bitcoin and address the issues of scalability experienced by its predecessor.
Visit the eToro Academy to learn more about Litecoin and other cryptoassets.
FAQ
- What is LTC used for?
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LTC, or Litecoin, is a cryptocurrency used for transactions and as a store of value. While it aims to be a faster and cheaper alternative to Bitcoin, its real-world adoption and use cases are limited compared to more established cryptocurrencies.
- Where can I spend Litecoin?
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Litecoin can be spent at many of the same locations as Bitcoin, although Litecoin is not as widely accepted. Some of the better-known merchants that accept Litecoin include Travala, eGifter and Sheetz.
- What is the Litecoin Foundation?
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The Litecoin Foundation is a non-profit organisation that aims to promote and develop Litecoin. The foundation supports various projects and initiatives that leverage Litecoin’s blockchain technology and help to foster its adoption and education.
This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments.
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