Litecoin: Instant, Near-Zero Cost Payments To Anyone In The World

Litecoin was released as an open-source project in October 2011 by Charlie Lee. The idea of Litecoin was not to be a competitor to Bitcoin, but to complement it by having a currency more suited for smaller transactions.

The project was released to the public so it could be fairly mined from the beginning, rather than the founder granting themselves a large premine as compensation.

While Litecoin is very similar to Bitcoin, there are a few differences which dramatically change the economic and security models.

• The block times were reduced to average 2.5 minutes. This change means that the throughput of onchain transactions is quadrupled while keeping the blocksize the same.
• To compensate for more frequent blocks, the supply cap was quadrupled to 84 million LTC.
• The mining algorithm was changed to use Scrypt. This was initially done to avoid ASICs (Application Specific Integrated Circuits) being used to mine on the Litecoin Network, which would disadvantage miners with less powerful hardware. Eventually though, Scrpyt capable ASICs were developed and are now used to mine LTC.