What is Litecoin (LTC)?

Litecoin (LTC) is one of the oldest and most well-known cryptocurrencies on the market. The idea behind Litecoin is to provide a faster and more affordable alternative to Bitcoin. Litecoin was created primarily for digital currency (transferring digital value) and is technically based on Bitcoin.

Summary of Litecoin

• Charlie Lee founded Litecoin back in 2011, which makes it one of the oldest cryptos still operating
• Litecoin’s abbreviation (ticker in crypto exchanges) is LTC
• Although Litecoin is not a hard fork of Bitcoin, its program code is largely identical to Bitcoin’s
• Litecoin uses the Proof of Work consensus algorithm, making it a mineable cryptocurrency
• Litecoin’s block time is 2.5 minutes, and its maximum supply is 84 million LTC
• Litecoin is well-suited for micropayments due to its average transaction fee of just $0.005
• Litecoin’s popularity has declined significantly since 2017, and it is no longer featured extensively in the news
• Although Litecoin’s popularity has declined, it has many loyal fans due to the project’s long age
• Litecoin can be easily bought from the popular cryptocurrency exchanges

Facts about Litecoin

Click here to see the current price of Litecoin: Litecoin (LTC) price.

Litecoin’s popularity reached its peak during the 2017 cryptocurrency boom. Founder Charlie Lee was one of the most prominent figures in the crypto industry at the time, and Litecoin was one of the largest cryptocurrencies by market capitalization. Today, Litecoin has disappeared from the headlines. It has also fallen out of the top 25 ranking list of cryptos by market capitalization.

Although Litecoin no longer features in the headlines, it retains a strong supporter base due to its long-standing history and reputation. It is a familiar project to all long-term crypto investors.

This article is a beginner’s guide to Litecoin. We’ll go through the history, technology, and investment potential of Litecoin.

The history of Litecoin

Charlie Lee founded Litecoin. He is an Ivory Coast-born software developer who moved to the United States at the age of 13. Lee graduated from the Massachusetts Institute of Technology (MIT) in 2000 with a Master’s degree in Computer Science.

Below is a picture of Charlie Lee from the 2024 Litecoin Summit.

Charlie Lee discovered Bitcoin in the early 2010s. This was a time when the altcoin market was slowly developing. Charlie Lee was already involved in founding a cryptocurrency called Fairbrix in September 2011, but its launch failed miserably.

Lee’s second venture, Litecoin, was a success. Litecoin was launched in October 2011 when Charlie Lee posted an announcement on the Bitcointalk forum. “We wanted to make a coin that is silver to Bitcoin’s gold,” wrote Lee.

Litecoin was based on Bitcoin’s program code. To simplify things a bit, Charlie Lee changed two parameters of Bitcoin:

1. The total supply: from 21 million to 84 million
2. Average block time: from 10 minutes to 2.5 minutes

The differences between Bitcoin and Litecoin will be discussed in more detail in the Litecoin vs. Bitcoin chapter.

In 2017, several coins forked from Bitcoin through a process known as a hard fork. This means that a new branch was created in the Bitcoin blockchain that did not follow the same rules as Bitcoin. The most famous of such forks is Bitcoin Cash. It is essential to understand that Litecoin is not a Bitcoin fork but an independent blockchain.

Altcoins gained mainstream attention during the 2017 cryptocurrency boom. At that time, Litecoin was also at the peak of its popularity. Below is a screenshot from CoinMarketCap.com on December 19, 2017. Litecoin was the 5th largest cryptocurrency by market cap.

Charlie Lee had already joined Coinbase in 2013, which remains one of the most popular cryptocurrency exchanges in the world. This helped Litecoin be listed on Coinbase, significantly increasing its popularity. At the time, Coinbase only listed Ethereum, Bitcoin Cash, Litecoin, and Bitcoin.

Charlie Lee made headlines in December 2017 when he announced that he had sold his Litecoin holdings. Many accused Charlie Lee of a pump-and-dump operation, as the founder sold his holdings at the height of the bull market.

Litecoin fell out of the headlines after the 2018 bear market. It suffered the same fate as many other popular coins of the 2017 boom (Bitcoin Cash, IOTA, Stellar, NEM, etc.). Smart contract platforms gained popularity in 2019, followed by the DeFi boom, the rise of meme coins, and NFTs, among other developments.

Litecoin has been steadily declining in the cryptocurrency rankings year after year. However, its long history has earned it a strong fan base, and its development continues. We will go over the technical updates later in this article.

Founder Charlie Lee remains actively involved in Litecoin, having donated $1.25 million to the project in August 2024. Lee has largely disappeared from the public eye and has not been seen on popular crypto podcasts lately.

Litecoin development is guided by the Litecoin Foundation, a non-profit foundation that relies on donations. Charlie Lee is the director of the Litecoin Foundation.

Litecoin vs. Bitcoin

Litecoin and Bitcoin share many similarities at the programming code level. This compatibility is also one of Litecoin’s strengths.

Founder Charlie Lee has stated that Litecoin benefits from the new features of Bitcoin. It can directly use many components in its development. Good examples are SegWit and the Lightning Network. Litecoin has also historically been seen as a testbed for Bitcoin.

Litecoin was founded as a “light version” of Bitcoin. This is also where its name, Litecoin (“light coin”), comes from. A lighter version of Bitcoin means two things in practice:

1. Easier mining
2. Faster and cheaper transactions

Bitcoin mining moved to ASIC devices in the early 2010s. The hashing algorithm used by Litecoin, Scrypt, made its mining “lighter,” meaning that mining was also profitable with GPUs. Today, ASIC miners have also been developed for Litecoin.

Litecoin mining also has a connection to Dogecoin. You can read more about it in the Dogecoin guide.

Like Bitcoin, new Litecoins are created through mining, as both are proof-of-work cryptocurrencies. Litecoin blocks are mined four times faster than Bitcoin blocks, on average every 2.5 minutes.

Litecoin transactions are also significantly less expensive than Bitcoin transactions. The average transaction fee is well under $0.01. Litecoin transaction fees have never even risen above $0.1 in the 2020s. For comparison, Bitcoin transaction fees have increased to as much as $50-$ 100 during peak hours.

Technically, Litecoin and Bitcoin are very similar. If you want to know more about the working logic of Litecoin, you can check out our Bitcoin guide. Litecoin nodes and the blockchain operate on the same principle as Bitcoin’s.

Litecoin halvings

Litecoin is a disinflationary currency with block rewards that are halved at regular intervals. Halvings work in precisely the same way as Bitcoin’s halvings. While Bitcoin’s block rewards are halved every 210,000 blocks, Litecoin’s halving occurs every 840,000 blocks. In terms of time, we’re talking about four years in both cases.

The Litecoin blockchain was launched on October 13, 2011. The initial block reward was 50 LTC. Litecoin has seen three halving events throughout its history:

1. First halving: August 25, 2015
2. Second halving: September 5, 2019
3. Third halving: August 2, 2023

The block reward was first halved from 50 LTC -> 25 LTC (2015), then it was halved from 25 LTC -> 12.5 LTC (2019), and for the third time from 12.5 LTC -> 6.25 LTC (2023). The next halving is likely to occur in August or September 2027.

At the time of writing, approximately 75 million Litecoins are in circulation. This represents roughly 89.5 percent of the total supply of 84 million Litecoins.

Litecoin’s Development

Litecoin has evolved technically and adopted many of the same features as Bitcoin. This is possible due to their nearly identical program code.

Let’s go through the most critical updates to Litecoin, which are:

• SegWit
• Lightning Network
• Taproot
• MWEB

Litecoin introduced SegWit in 2017, slightly before Bitcoin. The SegWit update marked a watershed in Bitcoin’s development, as it represented a significant step towards Layer 2 scaling, also known as the Lightning Network. This choice divided the Bitcoin community into two and even caused a “civil war” as part of the community wanted to scale Bitcoin by increasing the block size.

SegWit was followed by the Lightning Network in 2018. Both Bitcoin and Litecoin developed the Lightning Network simultaneously. Lightning Network usage began to grow in the 2020s. Bitrefill integrated Litecoin’s Lightning Network in 2022, significantly increasing its adoption.

Taproot is a third example of a technological update made to Bitcoin and Litecoin. Bitcoin activated Taproot in November 2021, and Litecoin adopted it in the summer of 2022. Taproot was a collection of minor updates focused on privacy, scalability, and security.

The fourth major update is MWEB, which stands for MimbleWimble Extension Blocks. MWEB ​​differs from previous updates because it has not been activated for Bitcoin. MWEB is a soft fork or optional update. It introduces privacy features to Litecoin, enabling the recipient’s address and the amount being sent to be concealed.

The use of MWEB technology has grown significantly in 2024.

Litecoin's #MWEB Year to Date 🚀
What's in your wallet? $LTC pic.twitter.com/IcuCGVMDFy

— Litecoin Foundation ⚡️ (@LTCFoundation) November 28, 2024

It is also worth noting that Charlie Lee performed an atomic swap between Litecoin and Bitcoin as early as 2017. An atomic swap means a user can make a direct LTC -> BTC swap from one blockchain to another without a third party.

January 2025 presented some intriguing news for investors. Litecoin is likely to become the third cryptocurrency to receive a spot ETF approval in the US market, further solidifying Litecoin’s strong brand presence in the market.

Litecoin as an investment

Litecoin’s popularity has declined significantly since 2017. Despite this, it is still a top 25 market cap cryptocurrency with a large fan base. Does Litecoin still have potential as an investment?

It’s not easy to make a compelling investment case for Litecoin. The primary issue is its currency classification. Investors have lost interest in this type of coin due to the abundance of more appealing options.

For example:

• Bitcoin has taken on the role of digital gold and also offers fast transactions using the Lightning Network
• Smart contract platforms provide an ecosystem for various applications and enable staking
• DeFi tokens are a new and growing sector
• Meme coins provide volatility and massive price increases

Furthermore, new sectors have emerged, with AI cryptocurrencies leading the charge.

Litecoin offers a well-known and reliable digital currency, but cryptocurrencies are not becoming more common as a means of payment. The main reason is taxation. Additionally, Bitcoin’s Lightning Network enables its use as a means of payment, offering even cheaper and faster transfers than Litecoin. Not to mention, there are new smart contract platforms with block times of less than a second.

Stablecoins are increasingly becoming a primary method of payment in the cryptocurrency space. Their advantage is a stable value, meaning the sender and receiver do not have to worry about taxes or fast-changing exchange rates.

Despite everything, Litecoin’s development continues, and there is steady activity on the Litecoin blockchain. It is by no means a dead project. Litecoin also boasts one of the oldest and most trusted brands in the cryptocurrency sector, following Bitcoin and Ethereum.

However, the potential as an investment is a different matter. Many good and interesting projects in the crypto sector have poor investment potential. We feel that Litecoin falls into this category.

If you disagree and believe in the future of Litecoin, check out this article: How to Buy Litecoin. It provides detailed instructions on how to purchase Litecoin from a secure and reputable cryptocurrency exchange. The most popular crypto wallets also support Litecoin.