Charlie Lee is behind Litecoin. His father was a Chinese who came to Africa in the 1960s. Charlie was born in Côte d'Ivoire, but he emigrated to the US in 13 years, where he graduated from MIT in 2000. Since 2007, he has worked as a programmer in Google.
In 2011, Charlie learned about Bitcoin in a well-known Wired magazine. He immediately contacted Bitcoin developers and bought the first Bitcoin from them. After that, he bought a powerful computer and began mining.
As an experienced programmer, he downloaded Bitcoin's source code from GitHub and began studying it. It did not take long, and Charlie decided to make his own cryptomite, which he called Litecoin. Litecoin is said to be digital silver. The golden stake is held by Bitcoin (see previous review). This is also reflected in the CoinMarketCap.
Litecoin was created by Bitcoin. Fork is nothing but making a copy of the source code of a project. This creates a new project that is originally the same as the original and carries all its strengths and weaknesses. Both projects, Bitcoin and Litecoin in our case, develop independently of each other. However, due to the similarity they can continue to describe to a certain extent. Sometimes it is said that Litecoin is a test platform for Bitcoin, for example, the lightning network we first saw on Litecoin and is now being tested for Bitcoin.
Litecoin is mined similarly to Bitcoin. Charlie wanted Bitcoin to improve, so he set up the mining block for 2.5 minutes (Bitcoin block will be mined every 10 minutes).
Litecoin has a different PoW algorithm than Bitcoin - firstly a bit in general: during a POW mining, it is necessary to unravel the complex mathematical task of having a hash. The more powerful your computer has, the more hash-rate (more computational mathematical operations at a given time).
Hash algorithms exist more. Bitcoin uses SHA-256, which allows Bitcoin to exploit parallelization of the calculation. Graphics cards were good for this, and this has led to a rapid development of ASIC technology (China's Bitmain is well known).
ASIC is nothing but a specialized chip for one activity - mining. The CPU (processor) is versatile and can handle many types of tasks. But it is slower. GPUs (chips in graphics cards) are a bit more specialized, so in specific tasks faster. ASIC is specialized in one type of business, so it can handle it much more efficiently than CPU and GPU. Bitmain has made an ASIC chip specializing in Bitcoin's mining, making it virtually impossible or significantly disadvantageous to mining on CPU and GPU.
Charlie has decided that Litecoin will use the Scrypt algorithm, which also comes from the SHA-256, but ensures that the calculation is much more serialized (not easy to parallelize) and requires a large amount of RAM memory. Calculation power is less important. He wanted to ensure the availability of mining for miners. Litecoin is therefore partially resistant to ASIC mining, but for example Vertcoin (see one of our reviews) is far ahead.
Litecoin is able to confirm the transaction much faster than Bitcoin and can handle multiple transactions. On the other hand, faster transaction confirmation means faster block generation and hence larger blockchain size. Litecoin i Bitcoin have a maximum block size of 1 MB. There are approximately 8400 transactions in the block.
As for transaction fees, Bitcoin has exceeded $ 50 in his legendary campaign in December 2017. Now we are around $ 5. Litecoin had a maximum of $ 1.5. Normally it is $ 0.20 per transaction.
Bitcoin and Litecoin support Segregated Witness (SegWit). This is an enhancement that frees up space in a block by removing specific unnecessary data from transactions. By saving space, multiple transactions will take place in the block. This improvement has been in the world for some time, but Coinbase has begun to use it for Bitcoin quite recently.
Litecoin and Bitcoin blockchains are very slow mainly due to PoW. Mining has one negative consequence: if the transaction is a lot and it does not manage to be processed in time (all new ones do not fit into the block), the miners are picking up a higher charge transaction (and those with a lower fee are lying in the queue). Whoever gives more will be cleared before - is it fair? It happens that low fee transactions can wait long hours, while those who are willing to pay up to fifty dollar fee will be cleared faster.
This malady may partially solve the Lightning Network (LN). LN is based on the assumption that not every transaction must occur directly in the on-chain block. If more people change over time with multiple transactions (eg exchanges), these transactions can take place in a different chain (off-chain).
Once a channel opens, thousands of transactions can take place and the channel can be open hours, days and years. Transaction details are only maintained on this network. They will only get into the blockchain when the channel closes (any side can close it). In terms of fees, blockchain fees are payable when the channel is opened and closed (mining). Fees on LN are significantly lower.
LN works on a multisignature wallet (the transaction must confirm multiple subscribers, not necessarily all). Wallet maintains the current balance of all participants. Let's give an example: The LN channel opens between Adam and Eve. Adam sends Eve 10 LTC. The next day, Eve will send back to Adam 2 LTC and the next day will turn 2 LTC. Once Adam or Eve decides to close the channel, the transaction is projected into a blockchain (mining). Adam will have 4 LTC and EVA 6 LTC. There were more transactions (in a matter of seconds) for a significantly lower fee.
It is worth mentioning the fact that in time, other people can be added to Adam and Eve, and it will still work through the same multisignature wallet until someone decides to close the channel.
LN will allow for faster transactions. When you pay for coffee, you are paid in a few seconds. As for the transaction fee in a blockchain, you will pay as soon as the channel closes. If you go to coffee daily, you can leave the canal open for a long time, saving you time and money.
Atomic swap, or cross-chain trading, is a way to replace the cryptome between two different blockchains without having to trust the third party (the stock market). Again, if Eve agrees with Adam that one BTC gets 100 LTCs, special time-locked contracts (HTLCs) are created to arrange exchanges between the two blockchains. Contracts will ensure that transactions are verified in both blocks and do not mind that everyone has a different blocktime.
The first atomic swap took place between Litecoin and Vertcoin. In December 2017, it took place between Litecoin and Bitcoin. It's an interesting feature and we'll see how much it will be used. Personally, I have never used it and I assume that there is not much experience with people, or they do not even know about it.
I have seen many FB groups where Litecoin is used to pay for membership (occasionally I see Ethereum). Litecoin is used in cafes and is accepted by some dealers. Bitcoin has simply too large fees for paying a small purchase. Litecoin is more suitable for this purpose.
Litecoin should have his own credit cards. Unfortunately, it was a collaboration with a third party to deliver them. Currently, Litecoin prepares payment cards for the TenX project. It should work and it is being tested. It should be officially announced soon.
Like Bitcoin, Litecoin is a shift agent and a value keeper. Let's see if it's ever real digital silver.
Charlie did not bother writing whitepaper;)
The official site is not listed. There is only a link to other pages where there is only an email. I suppose the community is working on it. Litecoin will come a little more agile about adopting good or new functionality.
A large number of people participated in the project. One developer has over half a million lines. The next one has 10 thousand rows. Surprisingly quite a bit of change to being a fork. Litecoin is basically finished and he's got to worry about it only when there's a need to do some new adjustments. There are currently a few code updates per week on GitHub. Last summer there was almost 100 updates in one week.
The biggest drawback comes from the fact that Bitcoin and Litecoin are no longer evolving. Occasionally, a bug fixes itself. So the code gets obsolete over time (Bitcoin is still getting bigger). Evolution will not stop, and we will soon see new currencies that will be better in many ways (faster, more transaction-intensive, more secure, more environmentally friendly in terms of konsesus algorithms, etc.). The question is whether Litecoin can compete in this competition.
Once the Bitcoin lightning network is used, people can use it more often, and Litecoin will no longer have the big advantage it now has.
Litecoin probably stays forever behind the other behind Bitcoin, and their fate will probably go the same way. If Litecoin had grown up Bitcoin, sometime Litecoin would have grown. I do not count this alternative. Bitcoin will stay forever with gold, and Litecoin will take second, or they will both retire together. The third option is that only Bitcoin will remain here to move away from Litecoin. Litecoin will be replaced by another currency that is more suitable for daily use.
Let's see if the LX's price makes something from TenX. Litecoin may be interested in some of the great players (Google, Amazon, Facebook, Alibaba, ...), but I really do not see much about it. These giants will be slow to slow down when compared to existing competitors and especially high volatility. If they were thinking in this direction, they would rather reach Ripples or Stellar Lumens.
Everything that exists for some time has the advantage that people know it and trust it (often unconsciously). A good mark is counted.
Litecoin, by using PoW, has an inherent property in it to be slow compared to PoS. This will not move much, at least for the mining period (in 2035, the mining fee will be 0.78 LTC).
I have not read a relevant attitude to what will happen after all. Transition to PoS? Will the miners pay for the mines? What do miners get when most transactions go to the lightning network? For PoW projects this is an open topic that will find its solution over time. PoS projects do not have to solve this problem.
When the whole market had recently come to life, it was beautiful to see how Stellar Lumens and Cardano were growing and other projects. There was not much interest in Litecoin. He showed up with a delay. But it does not have to be a sign - litecoin can stagnate for a long time and then suddenly leap, but a certain trend suggests it.
Litecoin i Bitcoin may have a certain psychological disadvantage that people do not want to have only 0.00x of something. They want to have the whole piece. Ideally more pieces. From this point of view, the currencies with a significantly higher number of coins in circulation once again win.
I hope that the analysis did not seem too pessimistic for the popular Litecoin. At this point, it makes sense to think about the investment, but I recommend watching its movement and comparing it with the competition.
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