Litecoin (LTC) is a virtual currency that was proposed by Charlie Lee, a former engineer at Google, and launched in October 2011.
Litecoin was developed to solve the long transaction confirmation time and scalability problem inherent in Bitcoin.
Bitcoin's issuance is capped at 21 million BTC, but Litecoin is set to quadruple the cap at 84 million LTC.
Characteristics of Litecoin
Avoids the Scalability Problem
The scalability problem occurs due to limitations on the size of blocks. Having a low scalability means that data processing may take a considerable amount of time.
A system modification was required to avoid this constraint. Litecoin implemented SegWit technology through a soft fork to avoid the scalability problem.
SegWit separates the signature data which allows more transactions to fit in each block.
Short Approval Times, Good for Small Settlements
On the Bitcoin blockchain, the block generation time (time needed to confirm transactions) is about 10 times on average.
Litecoin's generation speed is about four times faster than Bitcoin, with an average confirmation time at around 2 minutes 30 seconds.
The length of time for confirmations is proportional to the mining difficulty. If mining is easier, the time required to generate blocks becomes much faster.
Litecoin's faster confirmation time compared to Bitcoin means that the mining difficulty is lower than that of Bitcoin.
Since mining is much easier due to the probability of success being higher, this means that Litecoin as a virtual currency is more suitable for small transactions than Bitcoin.
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