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Its said by some that if Bitcoin is digital gold, then Litecoin is digital silver a relatively less valuable cryptocurrency thats easier to obtain, and easier to make transactions with. Created by an ex-Google engineer, Litecoin was made to supersede Bitcoin; it featured a higher market cap, a faster block generation time, a different hashing algorithm, and a modified GUI. The result was something that gave digital currency a much needed foothold in the door of the financial revolution.

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Litecoin was born out of the ashes of failure or, more specifically, the ashes of Fairbrix. A clone coin (and a fork of Tenebrix), Fairbrix was plagued with problems that led to its swift downfall. A premine period put seven million coins in the hands of a developer before launch; a software bug saw the genesis block fail to mint coins. Fairbrix left the cryptocurrency community clamouring for a Bitcoin substitute that the average Joe could mine on his hardware. And engineer Charles Lee decided to give them just that.

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Lee wasnt happy with the state of mining. At launch, Bitcoin was fair anyone could mine with a CPU, and profit. GPU mining emerged, and it became a little more difficult, but the divide still wasnt too great until ASICs arrived.

ASICs are specially engineered hardware, designed to do one thing, and do it well and it blew CPUs and GPUs away in terms of efficiency. Now, the average hobbyist could only dream of making a profit if you didnt have multiple ASICs, you didnt have a chance.

Fairness was an outfit Litecoin wore best, and a staple theme in Lees discussion and work. A proof of work algorithm, he decided, was the best choice a system where finding a problem is difficult, but verifying it is simple.

Scrypt the algorithm that Litecoin and its deceased brothers chose aimed to even the great divide between ASIC owners and the average miner. It did this by forcing the use of a specific part of the CPU (and GPU), called the scratchpad.

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First, a comparison: Bitcoin uses Sha-256d. Sha-256d only needs computing power this means that, given enough computing power, you can calculate rounds of Sha-256d very quickly.

Scrypt, on the other hand, uses computing power and memory. This is because it generates a large amount of pseudo-random data, storing it in the scratchpad, and referencing the data in a random way.

The scratchpad is a fixed amount of space that lives in your CPU or GPU, independent of things like VRAM and actual machine RAM. You cant add to it, and it fills up fast. At launch, this made it impractical if not impossible to run on specific hardware like FPGA or ASICs. A very specific machine with a large scratchpad size would need to be made for Scrypt mining.

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It was the approach to launching Litecoin rather than the technology behind it that generated the wave of publicity. The source code for Litecoin was launched a week before the genesis block, and Lee encouraged people to mine on the Testnet (a testing ground for altcoins, which doesnt generate rewards or add blocks to a live chain).

This had a joint effect: not only did it get people talking about Litecoin, and its benefits, but their hardware was set up and optimized for the launch.

On October 7th, 2011, after mining only 150 LTC, Charles Lee released Litecoin to the world.

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Litecoin was, primarily, a vehicle for investors who wanted to get in early on what could be the next wave of digital currencies.

Six years on, its left a very impressionable history. Sure, its not easy to find a pub that will take your coins or a taxi but youll be able to spend your coin on gift cards, pet food, and even jewelry.

Its become a testing ground, too big changes to Bitcoin could cost the market a lot of money, but with Litecoin, more risk is able to be taken. The community is smaller, so its easier to convince a large portion of people to upgrade often, Litecoin tests out new features or experimental ideas that Bitcoin cannot.

The project got a small boost when Warren Togami a former engineer at Red Hat signed on as Litecoins lead developer and created a nonprofit foundation to manage the Litecoin software, much like the Bitcoin Foundation.

Charlie Lee is still engaged with the Litecoin project and gives thoughts for improvement on various crypto-topics, for example including SegWit and Lightning Networks in Litecoin and Bitcoin.

Litecoin is traded on Poloniex, Kraken, Shapeshift and many more.

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Official Website CoinMarketCap Litecoin Reddit

Stay tuned for our next report! If youd like to start mining Litecoin you can do so here!

Disclaimer: Our AltcoinReports are provided to give an overview of available Altcoins in our mining catalog and the cryptocurrency market. We are not affiliated with any of Altcoin development teams and we dont guarantee the accuracy of the displayed information. Furthermore, this is no investment advice.

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The Altcoin Report #4: Litecoin - Genesis Mining