Litecoin is most similar in form to Bitcoin but has innovated to provide faster payments and processes to allow many more transactions. On 12 January 2019, Litecoin had mined 60 million coins, with another 500,000 within the next month, leaving around 23.5 million coins still to mine. Some people are said to be buying into Litecoin simply to diversify away from Bitcoin, whilst others are taking advantage of the potential for Litecoin to be a more useful alternative to Bitcoin as a practical currency.
Litecoin was created in 2011 as a decentralised, streamlined alternative to Bitcoin. Running on blockchains, like Bitcoin, it produces a block of information, including encrypted data and details of transactions every 2.5 minutes in comparison to Bitcoin’s 10 minutes. It also has much lower transaction fees in comparison to Bitcoin. This means it can process a higher volume of transactions.
Whilst the founder of Bitcoin remains shrouded in mystery with the still unidentified Satoshi Nakamoto, Litecoin was founded by Charlie Lee, a former Google engineer and cryptocurrency advocate. Lee did not plan to replace Bitcoin, but to reduce the amount of time required to confirm a new transaction as well as change the way new coins are generated, so that it was open to more people.
"There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle-tested, it is moving faster, has better leadership, and has more developer mindshare." — Fred Ehrsam, co-founder of the digital currency exchange company Coinbase
On 14 February, the conversion rate for Litecoin was around £32, and a total volume exchanged of roughly £793K, a fall of around 70% from the previous year. Yet more and more people are signing, up, buying and storing Litecoin in a similar way to Bitcoin by setting up a wallet online exchanges offering the security of the coins.
The main disadvantage of Litecoin is the same as some of the other cryptocurrencies in that it is totally anonymous, which means it is often used for illegal transactions on the DarkNet. In terms of mining value, when the value was low, mining on ASICs became profitable. This led to a large number of miners to the market, which increased the system’s complexity so that it became unprofitable to mine. With no big players in the market, there are opportunities for small private enterprises, though the rate may not make this particularly profitable.