What is Litecoin (LTC)? The Bitcoin alternative

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:

1. The replacement of the SHA-256 hash algorithm used in Bitcoin with the Scrypt model
2. A reduction in block processing time from 10 (Bitcoin) to 2.5 minutes
3. 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
• マイニングへの参入障壁が低い――少なくともプロジェクトの初期段階においては……

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. 同社は2017年にSegregated Witness（SegWit）の導入を先駆けて行いました。これはスケーラビリティを改善する技術であり、後にビットコインにも実装されることになりました。また、第2層の即時決済ソリューションであるLightning Networkの実証の場としても機能し、2022年にはMimbleWimble Extension Block（MWEB）を導入しました。これにより、ビットコインには欠けていた、取引に対するオプションのプライバシー保護層が提供されるようになりました。