Litecoin was created by Charlie Lee.
He was an employee of Coinbase, one of the most prominent exchanges for Bitcoin. Litecoin has since been made available for purchase directly with fiat on the platform, and Charlie Lee has become a major persona in the space.
Basics of Litecoin
- Litecoin is an open source fork of Bitcoin.
- It has four times as many total coins
- The block confirmation time is 2.5 minutes instead of 10
- An algorithm used for mining is Scrypt instead of Sha-256
- “Silver to Bitcoin’s gold” – Charlie Lee
- Launched on October 13, 2011
- Only seven Altcoins came before Litecoin
The main focus
The focus by Charlie was to fill a void in the market, to help recreate an asset class that people are used to. He had spent a lot of time trading commodities. Many Altcoins were released and continue to be released that have strong references to the tech industry and programming that many people wouldn’t understand. Charlie wanted something that leads to easy and efficient marketing. People already know gold and silver. He was looking to hold the number two spot below Bitcoin.
By using a different mining algorithm, it attracts more miners and creates less competition. This plays into the price stability of a coin because if miners are jumping from coin to coin to keep mining what is most profitable at the time, it causes greater fluctuations in the availability of the coins.
As a coin’s price increases, miners will mine more which will reduce the scarcity.
Inflation is one of the main issues cryptocurrencies aim to fix
Unlike contemporary monetary bills that can be printed without limits, all cryptocurrencies are set with a limit. Once they have all been mined, they can no longer be newly generated.
Another important factor to Charlie Lee for Litecoin’s development was to be as fair as possible with the launch of the coin.
Many coins have been released that are simply scams. There are many ways to do this, such as “pre-mining,” when the company or individual that started the coin begins mining the coin before the public has access to do so.
Essentially, it is Bitcoin Lite
As improvements are added to Bitcoin, they can be applied to Litecoin.
As the network for Bitcoin transactions becomes too clogged, there will always be Litecoin to make quicker transactions at a lower fee.
He focused on five main metrics for success:
- Network Security – ensuring that the protocols running the coin prevent hacks
- Market Capitalization – maintaining high value
- Exchange Liquidity – easy to transact large volumes without crashing its trade value
- Merchant Support – having vendors of consumer goods accept the coin
- Currency Usage – allowing ease of use to gain popularity as a daily exchanged coin
One of the main critiques of cryptocurrencies is their actual usage.
There are very few payment processors that work with them. In this way, it’s important not to see coins in a major competition for dominance. This entire industry is still in the very early stages of development. They were developed on blockchain technology with open-sourced programming in order to help the mutual progression of technology to benefit the sector and how our society functions as a whole.