Litecoin cryptocurrency

What is Litecoin?

Milad Mirshahi27/02/2022

Litecoin is a blockchain and cryptocurrency that is considered to be the first successful alternative cryptocurrency to Bitcoin, ie the first so-called altcoin.

Litecoin was launched in 2011 and was marketed as digital silver, in a market where Bitcoin was widely considered digital gold. Litecoin today among the largest and most well-known cryptocurrencies. You can easily buy and sell litecoin (LTC) at Firi.

Important facts about Litecoin

Important facts about Litecoin

  • The blockchain for Litecoin is based on Bitcoin's source code, but Litecoin's blockchain still has some modifications that make the two different from each other.
  • Litecoin is a decentralized cryptocurrency. Litecoin can be stored and transferred directly to anyone, anywhere in the world, without going through third parties such as banks or other central institutions.
  • An important modification that distinguishes Litecoin from Bitcoin is that the blocks in Litecoin's blockchain are approved faster than in Bitcoin's blockchain.
  • At the time of writing, Litecoin is among the largest cryptocurrencies in the world. Litecoin's cryptocurrency is limited to a total of 84 million coins.
  • There are around 79 million litecoin in circulation today, and new coins come into circulation by being paid out as prizes to those who secure the Litecoin blockchain (mining). Beyond this, Litecoin has no inflation.
  • The term for Litecoin's cryptocurrency is litecoin or LTC. The term for the smallest unit of Litecoin is defined as a litoshi. 1 litoshi is equivalent to 0.00000001 LTC. This allows very small transactions that traditional money can not perform, and it is perfectly normal to own for example 0.01 LTC.

Who made Litecoin?

Litecoin was created by software developer Charlie Lee in October 2011.

While employed by Google, Lee worked in his spare time to create a modified version of Bitcoin's open source code, which would eventually become Litecoin.

Lee confirmed early on that he does not want Litecoin to compete with Bitcoin, but that Litecoin should rather be an alternative to Bitcoin that relieves the Bitcoin network. This has also been evident in the fact that Litecoin has been very early in testing, and implementing, several of the major network upgrades that were developed for Bitcoin, such as Segregated Witness and Lightning Network.

Lee's vision for Litecoin was that it should be a cryptocurrency that was better suited for smaller transactions in everyday use, and he believed that Bitcoin had more utility value for large international transactions.

In what was a controversial decision in December 2017, Charlie Lee announced on the platform Reddit that he had sold and donated almost all of his Litecoin holdings. Lee believed that his large holding of Litecoin created a conflict of interest, and that his posts on social media could affect Litecoin's course.

Lee has since 2017 had a role in the Litecoin Foundation, and focused on further adoption of Litecoin's technology.

Buy and store litecoin (LTC) with a crypto exchange such as Firi

Buy and store litecoin (LTC) with a crypto exchange such as Firi

An easy and cheap way to buy and store litecoin is through a crypto exchange such as Firi. Firi makes it easy to buy, sell and store your litecoins and other cryptocurrencies.

  • When you create an account through a crypto exchange such as Firi, a Litecoin wallet is automatically generated for you.
  • Firi securely stores your litecoins for you and you do not have to deal with securing your own private keys and the security of your digital wallet.
  • You can access your digital wallets by logging in to your user by e-mail or vipps, and by verifying yourself with BankID.
  • You can easily send and receive cryptocurrencies to your wallet in Firi from other crypto exchanges or decentralized wallets.

Read how you can buy litecoin with three simple steps.

Cryptocurrency can be bought 24/7, and Firi makes it easy to switch between litecoin and NOK. In less than one business day, you can also sell your litecoin and several other cryptocurrencies for NOK and transfer to your bank account if you wish.

How to store litecoin in a decentralized wallet

How to store litecoin in a decentralized wallet

Because Litecoin is a decentralized network, it is possible to create a separate, private Litecoin wallet where you can store your litecoins.

When you create a digital wallet directly on the Litecoin network, you receive what is called a public key (public key) and a private key (private key) that is associated with your wallet. Because Litecoin is a decentralized network, it is possible to create a own, private Litecoin wallet where you can store your litecoins.

When you create a digital wallet directly on the Litecoin network, you receive what is called a public key (public key) and a private key (private key) that is associated with your wallet.

A public key can be compared to an account number for your digital wallet. For example, if someone is going to send you litecoin, they need access to your public key associated with your Litecoin wallet. You can safely send others your public key. A public key is a combination of letters and numbers that are unique to your digital wallet.

A private key can be compared to the password of your digital wallet. A private key is a combination of letters and numbers that are unique to your digital wallet.

A private key can also be generated in the form of a seed phrase, which in practice is 12 words that acts as a backup of your private key. If someone has access to your private key or your seed phrase, they will also have access to their cryptocurrency belonging to their wallet. It is therefore important not to share your private key with anyone.

It is important to note that a digital Litcoin wallet only supports Litecoin. For example, if you send bitcoins from a Bitcoin wallet to a Litecoin wallet, the bitcoins that are sent will be gone forever. Therefore, you need to be very aware of which public key you send and receive cryptocurrency on.

How does Litecoin work?

Litecoin is a solution based on blockchain technology. Satoshi Nakamoto launched Bitcoin in 2009 as the world's first cryptocurrency, and Charlie Lee created Litecoin based on Bitcoin's open source code.

Like, for example, Bitcoin's blockchain where you can send and receive bitcoins, Litecoin's blockchain is used to send and receive litecoin globally, without a third party being able to see or enter unexpectedly.

Firi explains: What is a blockchain?

A blockchain is simply explained as a database that contains data, and which is secured through a distributed network of participants. A database is a collection of information. This data is stored in blocks, and each block of data is linked together and forms a chain - that is, a block chain.

The most common data in a blockchain is transactions. Instead of a key player being responsible for storing the data, the majority of blockchains are secured through the use of cryptography and through a decentralized network of people around the world.

An important factor that distinguishes blockchains from ordinary databases is that the information in a blockchain cannot be manipulated by individual parties and cannot be changed without the consent of the majority of the network.

Bitcoin and Litecoin differ in several areas

  • Litecoin uses a different mining algorithm than Bitcoin, which has led to Litecoin having much faster confirmation times for transactions. Where Bitcoin's confirmation time for transactions is 10 minutes, Litecoin confirms transactions in 2.5 minutes. Litecoin generates blocks four times faster than Bitcoin, and is therefore able to process a higher volume of transactions.
  • Both Bitcoin and Litecoin use Proof of Work (PoW) as a mechanism for ecosystems. PoW is one of the most common algorithms in cryptocurrency. The most important difference between Litecoin and Bitcoin's Proof of Work is the different cryptographic algorithms they use. Bitcoin uses the SHA-256 algorithm, while Litecoin uses a newer algorithm called Scrypt.
  • Bitcoin's SHA-256 calculations can be accelerated to a large extent by parallel processing. Scrypt is more "memory intensive", which means that it requires more memory to solve the problem. Scrypt thus favors large amounts of high-speed RAM instead of just raw processing power.
  • The goal of Litecoin is that absolutely everyone who owns a computer should be able to participate in the network and extract (my) litcoins with Scrypt, as the Litecoin algorithm is significantly easier to solve and requires less computing power than Bitcoin. Unfortunately, Litecoin mining is no longer profitable without special equipment. You can buy "mining" rigs that consist of specially built equipment for this specific task, but it requires a significant investment as this equipment is expensive.

Litecoin has various advantages and disadvantages compared to Bitcoin:

The choice of Litecoin's algorithm means that transactions in Litecoin's blockchain are approved much faster than Bitcoin, and that it handles a much higher volume of transactions. At the same time, the change in the algorithm has an impact on the security and decentralization of the network.

Some factors that show the advantages and disadvantages of the two protocols:

  • If Bitcoin were to handle the same volume and as fast confirmation time as Litecoin, then it would require major updates in the Bitcoin code. Because the Bitcoin protocol has not been updated with these changes, and because Litecoin is less used, transactions with Litecoin are often cheaper than with Bitcoin.
  • During transfers, you have to wait five minutes for two confirmations with Litecoin, but with Bitcoin you have to wait for 10 minutes for only one confirmation. This means that transactions are often approved faster on Litecoin's network.
  • Among the majority of Bitcoin enthusiasts, there is a common consensus that increased transaction speed and confirmation time is not something that should affect the security and decentralization of the network. Because it is more cumbersome to participate as a miner (extractor) on the Litecoin network, there are significantly fewer players securing this network. This means that Bitcoin's network is significantly more decentralized, secure and protected against a so-called 51% attack (where an attacker controls most of the computing power and can take control of the network).
  • Despite the fact that the protocol to Bitcoin has not been upgraded with the changes that were made in Litecoin, there are still alternative solutions that will address the scaling challenges Bitcoin has with transaction speed, confirmation time and high fees. The most popular solution proposal is Lightning Network, which can preserve the security that exists in Bitcoin's protocol, while addressing the scaling challenges.

Litecoin is often seen as digital silver, or as the "little brother" of Bitcoin. Litecoin is also one of the largest and most popular cryptocurrencies and can be easily bought, sold and stored on a crypto exchange such as Firi. You can also create a decentralized wallet on the litecoin network and store your LTC there if you prefer to secure your own cryptocurrency.

The advantage of litecoin is technical upgrades which, among other things, make transactions faster and cheaper on the Litecoin network compared to Bitcoin. There is also a lower entry barrier for those who want to participate in the "mining" of Litecoin compared to Bitcoin. At the same time, many also believe that Bitcoin is an even more decentralized network and more secure against attacks. Litecoin is often earlier in testing technical upgrades that are being considered for Bitcoin. If you want to learn more about Litecoin, you can also visit the public website and read more there: