Litecoin (LTC) shares many similarities with Bitcoin, but a key difference is that Litecoin transactions are currently faster and cheaper to process.
The speed and low cost of Litecoin transactions make it potentially more useful for everyday payments, while Bitcoin has shifted more towards becoming a store of value.
A little bit more detail
To understand more about Litecoin and its origin, you’ll first need to learn a bit more about Bitcoin mining.
Firstly, when Bitcoin is transferred from one person to another, this gets recorded on the Bitcoin blockchain, a distributed ledger that contains all the Bitcoin transactions that have ever taken place. Computers around the world compete with one another to “unlock” new blocks on the blockchain, so that new transactions can be recorded and confirmed. Once a block is unlocked, the computer that unlocked it is rewarded with some new Bitcoin. This process of unlocking new blocks is known as mining.
In the early days of Bitcoin, it was a relatively quick, cheap, and easy cryptocurrency to mine. Anyone with a decent computer could get involved. However, the Bitcoin blockchain was purposefully designed so that each new block takes a bit more computational power to unlock than the one before. Today, mining Bitcoin requires very powerful and expensive computing rigs.
Still with us? The technology may be complex to understand at first, but think of it like mining a mineral resource such as gold: the more you mine, the scarcer the resource becomes, so it takes greater effort to discover and mine some more.
This is where Litecoin comes in.
Founded in 2011 by a former Google employee, Charlie Lee, Litecoin was designed to be a “lighter” version of Bitcoin. Litecoin is mined in a similar way to Bitcoin, but it requires a lot less computing power. This makes it quicker, easier, and more cost-effective to mine, which is why Litecoin is often thought of as the “silver” to Bitcoin’s “gold”.
What's the difference between Bitcoin and Litecoin?
|
Bitcoin |
Litecoin |
|
Launched in 2009 |
Launched in 2011 |
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Has a total coin supply of 21 million |
Has a total coin supply of 84 million |
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Average transaction time = 10 minutes |
Average transaction time = 2.5 minutes |
|
Higher average transaction fees |
Lower average transaction fees |
|
Requires extremely powerful, expensive computer rigs to mine |
Can be mined with relatively more accessible hardware |
Tip
Keen to explore Litecoin a bit more? You can learn about Litecoin basics and get all the latest cryptocurrency news on Luno Discover.
Want to know how to buy, sell, send, or receive Litecoin? We’ve got answers in the following help articles:
This information is not intended to be nor does it constitute financial, tax, legal, investment or other advice; nor is it a call to trade. The information is intended as general market commentary for information purposes only. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Advisor.