What is Litecoin (LTC)? The Bitcoin alternative

Alternative to Bitcoin: The history and technology behind crypto's digital “silver”

August 3, 20254 mins Read

Litecoin is one of the oldest projects in crypto. Founded in 2011 by Charlie Lee, a former Google employee, it was created as a “lighter” alternative to Bitcoin.

While it shares many similarities with Bitcoin, its main differences lie in:

The replacement of the SHA-256 hash algorithm used in Bitcoin with the Scrypt model
A reduction in block processing time from 10 (Bitcoin) to 2.5 minutes
An increase in the total number of coins (21 million for Bitcoin) to 84 million, resulting in a blockchain with:

Lower transaction fees
Faster transaction confirmation
Lower barrier to entry for mining – at least at the early days of the project…

History of Litecoin

Charlie Lee often described Litecoin as “digital silver,” in contrast to Bitcoin, which he called “digital gold.” This metaphor conveyed a clear proposal: while Bitcoin represented a reserve currency, with higher transaction costs, strict scarcity, and mining dominated by large industrial structures, Litecoin sought to be the more accessible and agile alternative — a cryptocurrency geared towards everyday use, with faster and cheaper transactions.

Litecoin was therefore born as a popular alternative to Bitcoin, just as gold has been for the elites and silver for the people. To this end, Lee made important technical choices: he replaced the SHA-256 hash algorithm used by Bitcoin with Scrypt, which was more memory-dependent and, at the time, resistant to mining by ASICs. This made it possible to mine Litecoin using CPUs and GPUs, thus democratizing access and attempting to preserve the decentralized spirit that had marked the early years of Bitcoin.

However, from 2014 onwards, the industry responded with ASICs adapted to Scrypt, and the Litecoin mining process also became centralized — albeit on a smaller scale.

In addition to the mining algorithm, other structural changes reinforced Litecoin's reputation as “digital silver.” Block time was reduced to 2.5 minutes (compared to Bitcoin's 10 minutes), resulting in faster transaction confirmations and generally lower costs. The maximum number of coins has also been increased: 84 million LTC, exactly four times the supply of Bitcoin, reinforcing the idea of a more abundant and tradable asset. Over time, Litecoin established itself as one of the most stable and enduring cryptocurrencies on the market, regularly ranking among the top 20 projects by market value.

More than that, it has become an experimental hub for innovations in the Bitcoin ecosystem. It pioneered the adoption of Segregated Witness (SegWit) in 2017, a scalability improvement that would later be implemented in Bitcoin. It also served as a testing ground for the Lightning Network, a second-layer instant payment solution, and in 2022 introduced the MimbleWimble Extension Block (MWEB), offering an optional layer of privacy to transactions — a feature missing from Bitcoin.

Bitcoin vs. Litecoin

	Bitcoin (BTC)	Litecoin (LTC)
Design objective	Being a decentralized store of value (digital gold)	Being a more accessible and faster alternative (digital silver)
Hash algorithm	SHA-256 – Computationally intensive, favours ASICs	Scrypt – More memory-intensive, designed to be ASIC-resistant at the outset
Block time	~10 minutes	~2,5 minutes
Transaction speed	Slower	Faster
Emission rate	Halving every 210,000 blocks	Halving every 840,000 blocks
Maximum number of coins	21 millions	84 millions
Network architecture	Peer-to-peer	Peer-to-peer
Mining	Highly centralized on large ASIC farms	It started out accessible via CPU/GPU, but today it is also dominated by ASIC
Native privacy	Absent, transactions are public	Absent, with optional privacy via MWEB

The LTC ecosystem

The Litecoin community is one of the longest-standing in the crypto market, with strong involvement from the Litecoin Foundation, which is responsible for promoting the development and adoption of the currency. Although smaller than Bitcoin's, it is an engaged community, present in forums such as Reddit, Telegram, and the official GitHub where improvements are continuously discussed.

The currency also remains relevant due to its wide acceptance on exchanges, payment processors (such as BitPay and PayPal), and multi-crypto wallets, as well as serving as a laboratory for technologies such as SegWit, Lightning Network, and MWEB.

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Conclusion

More than 10 years after its launch, Litecoin remains one of the oldest, most efficient, and well-established projects in the crypto market, with a market value of approximately US$ 8.25 billion. Its proposal to be a lighter, faster, and more accessible alternative to Bitcoin has resulted in a stable network with low transaction costs, high liquidity, and international acceptance, as well as pioneering contributions to the Web3 ecosystem.

We can confidently say that Litecoin has succeeded in its role as the “silver of cryptocurrencies” thanks to its focus on reducing transaction costs, ensuring economic predictability through scheduled halvings, and enabling global trading. It is indeed akin to being a “crypto for the people”: a decentralized, low-cost financial alternative to fiat currencies, with the added option of private transactions through MWEB (MimbleWimble Extension Blocks).

Simply put, it’s just more lite.