What is Litecoin (LTC)
Litecoin (LTC) is a decentralised cryptocurrency for P2P transfers, created in 2011 as a fork of Bitcoin with a shorter block time (faster confirmations). It runs on Proof-of-Work and uses the Scrypt algorithm.
Who created it
Charlie Lee (creator of Litecoin; further development is driven by the open-source community/ecosystem).
Why it was created
To build a PoW cryptocurrency suited to everyday payments: faster confirmations via a shorter block time (≈2.5 minutes) and different network/mining parameters (Scrypt) compared with Bitcoin.
How it’s used
- P2P transfers (between individuals)
- Paying for goods and services with merchants
- International transfers/remittances
- Fast transfers between wallets/exchanges
- Long-term holding as a “Bitcoin-like” asset
Risks
- High price volatility (sharp drops/pumps, potentially long sideways periods)
- Strong dependence on the broader market and BTC’s price action (correlation, “risk-on/risk-off”)
- Competition from Bitcoin payment solutions (Lightning) and stablecoins (as the “digital dollar” payment standard)
- Risk of fading narrative and market interest: Litecoin is often seen as a “legacy” asset without a new catalyst
- More limited ecosystem compared with smart-contract L1/L2s (fewer dApps/DeFi → less organic demand)
- Technology risks around upgrades/compatibility (bugs, contentious protocol changes, release delays)
- Risk of restrictions due to privacy features (MWEB) — some platforms may tighten rules/listing
FAQ
- Question: How does Litecoin differ from Bitcoin in practice?
- Answer: Litecoin is a fork of Bitcoin with different parameters: blocks roughly every 2.5 minutes and a PoW mining algorithm called Scrypt (Bitcoin uses SHA-256).
- Question: Why is LTC often used for transfers between exchanges?
- Answer: Because confirmations are relatively fast and fees are often lower in practice than on “heavier” networks during peak congestion.