Litecoin (LTC)

Litecoin (LTC) is a cryptocurrency designed for instant global payments. Created by Charlie Lee, a former Google employee, in 2011, Litecoin functions similarly to Bitcoin but has a higher maximum supply, allowing for 84 million litecoins to be mined, which is four times that of Bitcoin. One of Litecoin's main advantages is its quicker transaction times compared to Bitcoin, along with lower fees. Litecoin generates blocks every 2.5 minutes, while Bitcoin's blocks are produced every 10 minutes. Furthermore, Litecoin includes features such as Segregated Witness and the Lightning Network, which improve processing speed and reduce costs.

The importance of Litecoin lies in its capacity to enable everyday purchases using cryptocurrency. When Bitcoin prices were low, transactions were quick and inexpensive; however, during its peak in December 2017, purchasing a simple item like a cup of coffee could result in fees exceeding $30, with transaction times potentially taking over an hour. Although the cryptocurrency community is developing solutions like the Lightning Network for Bitcoin, these technologies are not yet fully operational. In contrast, Litecoin was specifically created for fast payments, allowing transaction verifications to occur in minutes instead of hours, thereby minimizing fees.

Litecoin operates through a mining process where network computers compete to solve complex puzzles to validate transactions. Miners receive rewards in the form of newly minted cryptocurrency for their computational efforts. This mining model, known as proof-of-work (PoW), ensures that once a transaction is recorded on the blockchain, altering it is extremely difficult due to the significant computational power needed to reverse confirmed transactions.

Both Bitcoin and Litecoin use proof-of-work, but they implement different methods, resulting in differences in transaction speed and costs. Bitcoin utilizes the SHA-256 hashing algorithm, which requires expensive and specialized ASIC (Application-Specific Integrated Circuit) hardware, while Litecoin can be mined using more affordable and widely accessible GPU (Graphics Processing Unit) technology found in standard computer graphics cards. Litecoin employs the Scrypt algorithm, which initially hindered the shift to ASIC mining, thus lowering entry barriers for miners, although mining has since become more complex and costly.