Many analysts believe that Bitcoin is digital gold and that Litcoin is silver in that sense. But what is Litecoin in the first place and how is it different?
Litecoin was the first Altcoin
Litecoin or LTC is historically the second cryptocurrency that came into existence in the year 2011. Unlike with Bitcoin the creator of Litecoin is very well known. Charlie Lee invented LTC because he believed that Bitcoin hasn’t been created with transaction speed in mind.
In fact, Litecoin is based on Bitcoin, but had seen some changes in its development regarding block transaction times, hard cap and its algorithm. While Bitcoin produces a new block every 10 minutes on average, the Litecoin blockchain has a block time of 2,5 minutes.
Bitcoin is going to see 21 Million BTC that will ever come to existence, since Litecoin is producing more blocks its hard cap has been raised to 84 Million LTC. Litecoin is using the so-called scrypt proof of work algorithm. It allows a better GPU performance which was important the first couple of years after the start, even though GPU mining isn’t very profitable anymore today.
What is the use of Litecoin?
Many people believe that it only needs one crypto to succeed the traditional financial system. Most of them are strong proponents of Bitcoin. However, Bitcoin as solid as it may be, has only a certain set of features.
When Litecoin came into existence users were concerned about transaction speed and fees. Both features are implemented and offer an advantage over BTC. So, this question is more general, because in the end of the day one could always ask why the world needs yet another altcoin.
The use case is what drives the market. Ethereum offers smart contracts, while Bitcoin has no such thing to offer, since it is limited to a script language that isn’t Turing complete. Litecoin offers speed while having the same security features as Bitcoin. The fact that Litecoins and other Altcoins are different reassure that Bitcoin and its features stay unique. In this sense there is simply no coin on the market that is going to take away its status as digital gold.