Litecoin was created in October 2011 by former Google engineer Charles Lee. The idea behind Lee’s project was to create a digital currency that fixed many of Bitcoin’s issues or improved in areas where Bitcoin was perceived to be weak.
Transactions are super-fast with block transactions typically around 2-3 minutes compared to Bitcoin’s 10 minutes. Because of this, it has created a lot of industry support, has a decent trading volume and for those looking to buy and sell Litecoin, it has very good liquidity.
The fundamental and technical difference between the two – Litecoin and Bitcoin – is centred around their respective mining capabilities. When users mine Litecoin (LTC) they do so using a different kind of algorithm, known as the scrypt algorithm. It incorporates Bitcoin’s SHA-256 hashing algorithm, but improves upon it by running calculations that can be greatly accelerated in parallel processing.
As a result, Litecoin can handle a higher volume of transactions, thanks to its considerably faster block generation process. The one slight disadvantage of this higher volume of blocks is that the Litecoin blockchain will be proportionately larger than Bitcoin’s, which means it will have more orphaned blocks.
However, Litecoin boasts greater efficiency and more supply for the market while still being inflation proof due to limiting the number of coins that are in circulation, with potentially 84 million coins rather than the 21 million that Bitcoin has as its upper limit. Consequently, it could be argued that Litecoin has the upper hand for general day-to-day buying and selling as there’s a larger amount in supply.
For cryptocurrency traders and investors, Litecoin has many attractive qualities. Because it is years behind Bitcoin in its integration into global systems and adoption by commercial enterprises, it is currently a lot cheaper to invest in. Bitcoin is further down the track and Litecoin may never catch it up, of course, but it clearly has some compelling features and advantages over Bitcoin that could make it a more attractive proposition to retailers and banks in the long run.
If Bitcoin trips over a few major obstacles, such as the ongoing and much-debated scalability challenges it needs to overcome, then major commercial brands may become frustrated and, in a bid to accelerate their own corporate growth and expansion plans, particularly overseas, turn to Litecoin as a viable alternative.