Litecoin is a peer-to-peer, open-source cryptocurrency that was developed as an alternative to Bitcoin. Litecoin is nearly identical to Bitcoin from a technical perspective, but with a few modifications that make Litecoin easier to mine and less expensive compared to its predecessor.
History of Litecoin
Litecoin was created in 2011 by Charlie Lee. A previous derivative of Bitcoin called Tenebrix had introduced an alternative scrypt function to Bitcoin’s mining algorithm, which meant miners could use CPU resources instead of GPUs. However, this currency was embedded with a clause that allowed the developers to claim a large portion of the currency for themselves for free. Lee introduced Litecoin as an alternative to Bitcoin that was more egalitarian than Tenebrix.
After Litecoin’s network was launched in 2011, it experienced significant growth in 2013. By 2017, Litecoin had become one of the top 5 cryptocurrencies and was available on most mainstream cryptocurrency exchanges. Several fintech platforms like PayPal, Venmo, and Robinhood began supporting Litecoin exchanges in 2020, along with a limited number of other cryptocurrencies like Bitcoin, Ethereum, and Bitcoin Cash.
Why is Litecoin so cheap?
Litecoin is simultaneously one of the most popular and least expensive cryptocurrencies available today, especially compared to Bitcoin. Litecoin’s value can be tied to a few different factors.
First is Litecoin’s higher maximum coin capacity—84 million compared to 21 million bitcoin. The higher volume means each coin is worth less. Additionally, Litecoin can be mined more quickly than Bitcoin. The algorithm changes that allow miners to use their computers’ CPU speed up the mining time and also make transaction processing faster. It’s worth noting that Bitcoin’s value was at one time equivalent to what Litecoin’s value is now. As more Litecoin is mined and exchanged, it’s very likely that its value will increase accordingly.
Learn more about cryptocurrency mining.