History of the Litecoin LTC cryptocurrency
Litecoin was launched by Google engineer Charlie Lee to be a real alternative to Bitcoin, “silver to Bitcoin’s gold”. It was a deliberate change in the code from Bitcoin, called a hard fork. Lee’s aim was to build on the older cryptocurrency and not change things unless there was good reason to.
Litecoin was released to the world in October 2011 with just 150 premined coins to allow people to get in at the beginning. Lee said: “We believe a coin needs to be released in a fair manner. Having one person (or a group) control a large amount of coins that can be used as they see fit is against the decentralized vision of Bitcoin.”
One of the changes Lee made was to the mining algorithm, discarding Bitcoin’s SHA-256 for the Scrypt system. Scrypt is a faster and less complicated algorithm and its hash rate – the speed at which the calculation can be made – makes it easier for individual miners to compete.
Litecoin blocks are created roughly every 2.5 minutes, compared with Bitcoin’s one every 10 minutes. This means it can handle a higher volume of transactions than Bitcoin and merchants can confirm transactions in a quarter of the time needed for the older currency.
The downside of this speed is that Litecoin’s blockchain will be proportionately larger than Bitcoin’s and be more prone to having orphan blocks which risk transactions not being completed.
In May 2017 Litecoin was the first of the big cryptocurrenices to adopt the SegWit scaling solution, which by removing signature data allows greater throughput without changing the block size.
And also that month, the first lightning network transaction was completed through Litecoin, transferring Litecoin from Zurich to San Francisco in under a second. Lightning network operates on top of a blockchain and allows instant transactions.
Litecoin is currently the sixth largest cryptocurrency by market capitalisation. For a brief period in 2015 it got as high as second place. CoinMarketCap places its current value at $7.8bn. Its peak market cap of more than $19bn was reached in December 2017 and it broke through the $1bn barrier in November 2013.
Litecoin’s highest price on CoinMarketCap, which takes a weighted average from all the exchanges, was $375.29 on 19 December 2017. The exchanges trading the highest volumes of Litecoins are OKEx, Binance and ButZ. By volume most Litecoins are traded against Bitcoin, Tether and US dollars.
There are currently more than 56 million Litecoins in circulation and fractions of coins can also be sent and received.
Litecoin’s main player is Charlie Lee, who was born in the Ivory Coast to Chinese parents. The Lees relocated to the US when Charlie was 13.
Lee studied computer science at MIT and worked in Silicon Valley for more than a decade after graduating. He was a software engineer at Google when he decided to start his own cryptocurrency. His first try, Fairbrix, was riddled with technical problems. Litecoin was his second attempt.
Lee left Google for Coinbase in 2013 before concentrating full time on Litecoin in June 2017. Concerned that he was seen as having a conflict of interest with tweeting about the currency while holding it himself, Lee sold all his Litecoins in December 2017.
He said on Reddit: “Whenever I tweet about Litecoin price or even just good or bad news, I get accused of doing it for personal benefit.” He is currently still working on Litecoin but has hinted that at some point he will “step away” from the cryptocurrency to make it less centralised.
Interest in cryptocurrencies runs in the Lee family as Charlie’s brother Bobby is the founder of China’s largest exchange BTCChina.
Litecoin is promoted by the Litecoin Foundation, a not-for-profit organisation whose “mission is to advance Litecoin for the good of society by developing and promoting state-of-the-art blockchain technologies”.
Registered in Singapore, its board of directors is Charlie Lee, Singaporeans Xinxi Wang and Zing Yang, and Franklyn Richards from the UK.
Litecoin’s reputation took a bit of a hit with the LitePay incident. LitePay, which seems to have been a one-man-band, had touted itself as a payments processor for Litecoin, similar to BitPay for Bitcoin. It was due to launch in February 2018 and Litecoin’s price made healthy gains that month.
However, the launch didn’t happen in February and in March LitePay’s CEO, Kenneth Asare, gave a worryingly bad performance on an Ask Me Anything session on Reddit, which led many contributors to conclude that LitePay was a scam.
LitePay shut down later that month and Litecoin’s price fell, with people feeling that the Litecoin Foundation was to blame for the failure. Charlie Lee tweeted an apology: “Like everyone else, we got too excited about something that was too good to be true and we optimistically overlooked many of the warning signs,” he said.
What other people say
Elizabeth Stark, CEO of Lightning Labs told International Business Times that Litecoin is able to adopt technological advances quicker than other cryptocurrencies. She said: “It’s implementing a lot of things that folks in Bitcoin have wanted to do, but it takes them longer to get the community on board in a kind of consensus …while Litecoin can be iterative, put all these cool new technologies onto it without changing the direction in which it’s heading.”
Chronology of dates
- October 2011 Founded by Charlie Lee
- July 2013 Lee leaves Google for Coinbase
- November 2013 Market capitalisation hits $1bn
- May 2017 SegWit (Segregated Witness) activated on the Litecoin blockchain
- May 2017 First lightning network transaction through Litecoin
- June 2017 Lee leaves Coinbase to concentrate on Litecoin
- December 2017 Lee sells all his Litecoins to avoid a conflict of interest
- March 2018 LitePay doesn’t launch and closes down