Litecoin is a cryptocurrency that is nearly identical to Bitcoin. The creator of Litecoin, Charlie Lee, intended Litecoin to be a “lighter” version of Bitcoin, allowing for faster transaction times while also being cheaper. While it shares many similarities with Bitcoin, Litecoin also has a few fundamental differences.
One of the most basic characteristics of Litecoin, which also differentiates it from Bitcoin, is the way a user mines the coins. Bitcoin allows miners to use parallel processing in order to increase their mining power, whereas Litecoin uses a different algorithm, Scrypt, to serialize its calculations in order to prevent parallel processing as much as possible.
In order to provide faster transactions, Litecoin’s average block mining speed is two and a half minutes, compared to Bitcoin’s ten minutes. This is beneficial to merchants who may need to process many small transactions a day. Like Bitcoin, Litecoin also has a fixed maximum number of coins, which has been set at 84 million. This is four times the maximum amount of Bitcoin that will be released.
Litecoin is currently the fifth largest cryptocurrency by market cap ($9.7 billion, March 12, 2018).