Litecoin (LTC) is referred to as “silver” with Bitcoin being “gold”. Going live back in October of 2011, Litecoin began with a goal of reducing transaction times and increasing decentralization of mining pools. Starting off as a fork or clone of Bitcoin, Litecoin changed a few technical details..
The main difference between the blockchains is mining procedure. Bitcoin uses the SHA-256 hashing algorithm for mining that allows for parallel processing. This has lead to the rise in ASIC (application-specific integrated circuit) chips, which are specifically designed to parallel process and mine Bitcoin. A concentration of operations has arisen due to the availability of ASICs. Here is where Litecoin comes in. Litecoin uses a different hashing algorithm called “s-cript” that is a more memory-intensive process. Memory is relatively cheaper then ASICs and are available to more people, therefore the mining is more spread out and democratic.
S-cript ASIC’s were recently created by several companies. ASIC’s can start to tilt the scale towards miner centralization in a similar way to Bitcoin.
The speed of Litecoin comes from its faster block generation. New Bitcoin blocks are validated every 10 minutes compared to Litecoin’s 2.5 minute blocks. In theory, this can help avoid “double-spending”, which is the main type of fraud possible with cryptocurrencies. It gives more rewards, more often and to a larger miner base. Theoretically this spreads the mining rewards more evenly.
An interesting fundamental difference between the cryptocurrencies “gold” and “silver” are the founders. Following the creator of Litecoin, Charlie Lee, is a great way to stay up-to-date in the crypto world. Unlike Bitcoin, the founder of Litecoin is a known and active member of the cryptocurrency community. Whether this is good or bad for the project is yet to be seen, but having a leader help push the conversation towards a positive change has made a noticeable difference. Litecoin ungraded to SegWit incredibly quick in part because of how much of a vocal proponent Charlie was during the process.