Litecoin

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Litecoin

Official Litecoin logo
Ledger The Litecoin peer-to-peer network regulates and distributes through consensus in protocol.
Date of introduction 7 October 2011
User(s) International
Inflation Limited release (geometric series, rate halves every 4 years reaching a final total of 84 million LTC)
 Source Historic and Current Charts for LTC.
 Method Increasing difficulty per every 2016 blocks produced.[1]
Subunit
 0.001 mLTC (millicoin)
 0.000001 µLTC (microcoin)
 0.00000001 Smallest unit
Symbol Ł[2]
Nickname LTC
Plural Litecoin, litecoins

Litecoin (LTC[3]) is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license.[4] Inspired by and technically nearly identical to Bitcoin (BTC),[5] Litecoin creation and transfer is based on an open source protocol and is not managed by any central authority.[4][6] Litecoin is intended by its developers to improve upon Bitcoin,[7] offering several key differences.[8][9] As of November 2013, Litecoin had received extended coverage by mainstream media with agencies such as the Wall Street Journal, CNBC and The New York Times citing it as an alternative (or possibly even successor) to Bitcoin.[10][11]

Litecoin is the second-largest cryptocurrency by market capitalization.[12][7][13] Litecoin has a marketcap of $551 million USD as of Jan 29th, 2014.


History

Litecoin was released via an open-source client on GitHub on October 7, 2011 by Charles Lee, a former Google employee.[14] It was a fork of the Bitcoin-Qt client, differing primarily by having a decreased block generation time, increased maximum number of coins, different hashing algorithm, and a slightly modified GUI.

The largest Bitcoin exchange, Mt.Gox, announced on 25 April 2013 that trading for Litecoin had been delayed due to DDoS attacks on its website.[15][16]

In 2013, The Economist mentioned Litecoin as a Bitcoin alternative, noting that it "has shot up in price of late."[17]

During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.[18]

Litecoin reached a 1 billion marketcap in 2013 [19]

Development

As of November 2013 the most recent version of Litecoin is 0.8.5.1, which, along with previous updates, fixes vulnerabilities and adds enhanced security to the Litecoin network.[20]

The Litecoin developer team released version 0.8.6.1 in early December 2013.[21] The new version offers a 20x reduction in transaction fees, along with other security and performance improvements in the client and network. The source code and binaries were released early to people in the #litecoin IRC channel, on the official Litecoin forums, and on reddit's /r/litecoin—with information for "power users" to add a Litecoin supernode to the configuration file—while the main site was to be updated after enough of the network was running the new version. This release method was used to ensure that the low fee transactions from version 0.8.6.1 clients would not be delayed by clients running older versions.

Differences from Bitcoin

Litecoin offers three key differences from Bitcoin, which its developers hope will make it better than Bitcoin.[8][9]

  • The Litecoin network aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes, which its developers claim allows for faster transaction confirmation.[4][22] - the drawbacks of faster block times are increased blockchain size, and an increase in the number of orphaned blocks. Advantages include greater resistance to a double spending attack over the same period as Bitcoin, if both networks had the same computing power.
  • Litecoin uses scrypt in its proof-of-work algorithm: a sequential memory-hard function first conceived by Colin Percival.[23]
  • The Litecoin network will produce 84 million litecoins, or four times as many currency units as will be issued by the Bitcoin network.

The original intended purpose of using scrypt was to allow miners to mine both Bitcoin and Litecoin at the same time.[24] The choice to use scrypt was also partially to avoid giving advantage to video card (GPU), FPGA and ASIC miners over CPU miners. While CPU mining is no longer "profitable," lone CPU miners are still able to contribute to the network and acquire coins when pool mining--the same is no longer possible in the Bitcoin network. Mining litecoin with a video card is approximately 1000 times slower than mining bitcoin with the same video card.

Due to Litecoin's use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for Bitcoin, which uses SHA-256.[25]

Transactions

A peer-to-peer network similar to Bitcoin's handles Litecoin's transactions, balances and issuance through scrypt, the proof-of-work scheme (Litecoins are issued when a small enough hash value is found, at which point a block is created, the process of finding these hashes and creating blocks is called mining).[26][27] The issuing rate forms a geometric series, and the rate halves every four years (every 840,000 blocks) reaching a final total of 84 million LTC.

Litecoins are currently traded primarily for both fiat currencies and other cryptocurrencies, mostly on online exchanges. Reversible transactions (such as those with credit cards) are not normally used to buy litecoins as Litecoin transactions are irreversible, to avoid the danger of chargebacks.[28]

Addresses

Payments in the Litecoin network are made to addresses, which are based on digital signatures. They are strings of 33 numbers and letters which always begin with the letter L.[29]

Confirmations

Transactions are recorded in the Litecoin blockchain (a ledger held by most clients), a new block is added to the blockchain roughly every 2.5 minutes (whenever a small enough hash value is found for the proof-of-work scheme), a transaction is usually considered complete after six blocks, or 15 minutes, though for smaller transactions, fewer than six blocks may be needed for adequate security.

Wallets

The most common Wallet available today is Litecoin-Qt for Linux, Windows and Mac. Litecoin-Qt is an offline wallet.[30] A light wallet is being written and will be released in the coming months.[31]

On January 19th 2014, the Litecoin Android wallet was released.[32][33]

Exchanges

As of 2014 there are many market exchanges that deal with Litecoin, the biggest one being BTC-E. Most exchanges allow only BTC/LTC trading while three exchanges also allow LTC/USD and LTC/EUR trading.[34]

See also

Wikimedia Commons has media related to Litecoin.

References

  1. ↑ "Difficulty - Litecoin Wiki". Litecoin Wiki. Retrieved 2014-01-19. 
  2. ↑ str4wm4n (2012-05-06). "Ł as the litecoin "symbol"?". Retrieved 2014-01-19. 
  3. ↑ "Litecoin charts". ltc-charts.com. Retrieved 2014-01-19. 
  4. ↑ 4.0 4.1 4.2 "Litecoin.org". litecoin.org. Retrieved 2014-01-19. 
  5. ↑ "Mining digital gold". The Economist. Retrieved April 27, 2013. 
  6. ↑ Satoshi, Nakamoto. "Bitcoin: A Peer-to-Peer Electronic Cash System". Bitcoin.org. Retrieved 24 April 2013. 
  7. ↑ 7.0 7.1 Simonite, Tom. "Bitcoin Isn’t the Only Cryptocurrency in Town". MIT Technology Review. Retrieved 24 April 2013. 
  8. ↑ 8.0 8.1 Powers, Shawn. "Cryptocurrency: Your Total Cost Is 01001010010". Linux Journal, March 2012. Linux Journal. p. 29. Retrieved 21 October 2012. 
  9. ↑ 9.0 9.1 BATR. "Bitcoins Risk Reward". The Market Oracle. Retrieved 24 April 2013. 
  10. ↑ Popper, Nathaniel (2013-11-11). "The Rush to Coin Virtual Money With Real Value - NYTimes.com". New York Times. Retrieved 2013-12-16. 
  11. ↑ Matt Clinch. "Who needs bitcoin? Check out these virtual currency alternatives". Cnbc.com. Retrieved 2013-12-16. 
  12. ↑ "Crypto-Currency Market Capitalizations". coinmarketcap.com. Retrieved 2014-01-19. 
  13. ↑ "LTC/USD alltime - Litecoin / US Dollar chart from BTC-e". cryptocoincharts.info. Retrieved 2013-12-16. 
  14. ↑ "Litecoin - Litecoin Wiki". Litecoin Wiki. Retrieved 2014-01-19. 
  15. ↑ Dan Goodin. "Potent DDoS attacks on Mt. Gox delay rollout of new virtual currency". Ars Technica. Retrieved 27 April 2013. 
  16. ↑ "Mt. Gox Press Release - April 24th, 2013". Mt.Gox Team. Retrieved 24 July 2013. 
  17. ↑ (April 13, 2013). Mining digital gold. The Economist.
  18. ↑ "Litecoin Value Leaps 100% in a Day as Market Cap Passes $1bn - IBTimes UK". Ibtimes.co.uk. 2013-11-28. Retrieved 2013-12-16. 
  19. ↑ "Crypto-Currency Bubble Continues: Litecoin Surpasses Billion Dollar Market Capitalization". Forbes. Retrieved 2014-01-19. 
  20. ↑ "Litecoin GitHub Repository". Retrieved 19 November 2013. 
  21. ↑ warren. "Litecoin 0.8.6.x - READY FOR POWER USERS". Retrieved 2014-01-19. 
  22. ↑ "Wary of Bitcoin? A guide to some other cryptocurrencies". Ars Technica. Retrieved 2014-01-19. 
  23. ↑ Percival, Colin. "Stronger Key Derivation Via Sequential Memory-Hard Functions". Retrieved 2013-04-24. 
  24. ↑ coblee. "[ANN] Litecoin - a lite version of Bitcoin. Launched!". Retrieved 2014-01-19. "Using Scrypt allows one to mine Litecoin while also mining Bitcoin." 
  25. ↑ Coventry, Alex. "Nooshare". MIT. Retrieved 2012-09-21. "These hash functions can be tuned to require rapid access a very large memory space, making them particularly hard to optimize to specialized massively parallel hardware." 
  26. ↑ "Litecoin Miner Status". FishGuy876's Blog. Retrieved 2014-01-19. 
  27. ↑ Solar Designer (2012-09-02). "Re: using scrypt for user authentication". Openwall. Retrieved 2014-01-19. 
  28. ↑ "Comparison of online payment methods". blockchain.info. Retrieved 2014-01-19. 
  29. ↑ "Litecoin Block Explorer". Retrieved 2014-01-19. 
  30. ↑ "Litecoin wallets". Litecoin.org. 2012-11-11. Retrieved 2013-12-18. 
  31. ↑ warren. "Light Wallets - Android Wallet and Electrum". Retrieved 2014-01-19. 
  32. ↑ hank. "Re: Litecoin Android 2014 Fund". Retrieved 2014-01-21. 
  33. ↑ Litecoin Project. "Litecoin Wallet". Retrieved 2014-01-21. 
  34. ↑ "Service directory". Litecoin Wiki. Retrieved 2014-01-19. 

External links

SHA-256-based
scrypt-based
Other
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