What is Litecoin (LTC)? A Deep Dive Into the Second-oldest Cryptocurrency

Usually referred to as the silver to Bitcoin’s gold and Bitcoin’s lite version, Litecoin (LTC) is the second-oldest cryptocurrency in the market. The assets currently rank 20th by market capitalization, with a value exceeding $8 billion at the time of writing.

Litecoin is the first successful altcoin in crypto history with a structure similar to Bitcoin (BTC). An altcoin is a term derived from the combination of two words, ‘alternative’ and ‘coin’, used to describe all cryptocurrencies other than Bitcoin, including stablecoins, memecoins, utility tokens, and others.

Considering how long this project has existed, the question arises: Is Litecoin still relevant in the present crypto space? This article will teach you everything you need to know about Litecoin and guide you to make a good decision if you are looking to invest in it.

What is Litecoin?

Litecoin is a layer-one blockchain network created by former Google engineer Charles ‘Charlie’ Lee in October 2011. Inspired by Bitcoin’s open-source code, Litecoin is a decentralized payment network void of third-party intervention. 

While Litecoin was not created to replace Bitcoin, the project was born in an effort to design a complement or an alternative cryptocurrency to the latter while embodying all its benefits and improving on its limitations. Thus, Litecoin was promoted as digital silver in an industry that viewed Bitcoin as digital gold.

The native cryptocurrency of the Litecoin blockchain is known as litecoin or LTC for short. Here’s a tip to help you remember the difference between the cryptocurrency and the blockchain: 

The coin starts with lowercase ‘l’, written as ‘litecoin’, while the blockchain starts with uppercase ‘L’, written as ‘Litecoin’.

Since LTC operates on a decentralized platform, you can store your coins and transfer your assets directly to anybody, anytime, and anywhere without relying on a central authority.

Litecoin (LTC) has a capped supply of 84 million coins. This means that only this amount of LTC will ever be mined. At the time of writing, its circulatory supply is over 76 million. On May 10, 2021, Litecoin (LTC) reached an all-time high of $410.26.

The smallest unit of litecoin is known as a litoshi. One LTC is equal to 100 million litoshis.

Litecoin’s History and Background 

Litecoin is one of the first altcoins that proved to be strong competition to Bitcoin. Although its creation process began as a side project for its founder, the asset gained immense popularity after its launch, eventually becoming the third-largest cryptocurrency at its peak. After a while, though, Litecoin’s price gradually took the back seat as the market continued to evolve.

Litecoin’s founder was a graduate of the Massachusetts Institute of Technology (MIT) who developed an interest in Bitcoin. As a Google employee, Charles Lee used his leisure time to create a modified version of Bitcoin’s open-source code. This modification later evolved into a stand-alone blockchain, known as Litecoin, in 2011. When announcing the project’s launch on a popular Bitcoin forum, Lee termed it “a lite version of Bitcoin”, explaining its key features.

In December 2017, however, Lee made a shocking announcement on Reddit, declaring that he had sold and donated most of his LTC. He did this in order to resolve the conflict of interest that arose from his large litecoin holding. According to him, people claimed that his tweets influenced Litecoin’s market price and his posts increased only his personal wealth at the expense of the project’s growth. Although he did not disclose details of how much he sold his coins, he mentioned that the sell action did not crash the market. Moving on, Charlie Lee focused on his role in the Litecoin Foundation to promote the project’s adoption. 

How Does Litecoin Work?

Every digital currency works because of computer codes or smart codes that set the rules to keep on-chain data safe, and handle payments. As a decentralized public ledger, transactions made on the blockchain are immutable and cannot be manipulated once recorded.

Litecoin is similar to Bitcoin because it was created based on its technology. However, it focuses more on faster payments with more coins powering the ecosystem. As such, Litecoin is more suitable to be used as a payment system while Bitcoin, a store of value.

Litecoin functions using the Proof-of-Work (PoW) consensus system, where miners verify and validate transactions by solving cryptographic puzzles. Compared to Proof-of-Stake (PoS), this consensus mechanism requires extensive mining power. However, this crypto project was designed for quicker and less expensive transactions. This is achieved using the Scrypt hashing algorithm, which creates blocks four times faster than Bitcoin’s SHA-256.

You can mine LTC using specialized ASIC miners or by joining a mining pool. Serving as an alternative cryptocurrency to Bitcoin, the Litecoin blockchain is often used to test new technologies before they are adopted by Bitcoin. For example, the Lightning Network and SegWit, which improve scaling, were first developed on Litecoin before being added to Bitcoin.

Tokenomics 

Litecoin has a total maximum supply of 84 million LTC coins. Similar to Bitcoin, the rate at which new coins are issued is reduced by half roughly every four years. This is done in a bid to retain or even increase the coin’s value over time. Structured to emulate the scarcity and perceived value of digital gold, akin to Bitcoin, Litecoin’s tokenomics positions it as a deflationary asset.

Reward Mechanism and Halving

Litecoin mining rewards undergo a halving process where the network’s coin supply reduces by half approximately every four years. Currently, miners earn 6.25 LTC each time they successfully verify a block of transactions on the network. 

The last Litecoin halving process took place in 2023. The next halving, which is scheduled for 2027, will reduce the block reward for miners from 6.25 LTC to 3.125 LTC per block.

Initial Distribution

Launched in 2011, Litecoin had no pre-mining phase. As a result, equitable distribution was made from the outset of creation. All circulating LTC has been acquired through mining or trading on the open market.

Features of Litecoin

Litecoin distinguishes itself through several key characteristics, including its:

• Mining algorithm 
• Block time and transaction Speed
• Coin supply
• SegWit upgrade 

Mining Algorithm

Litecoin employs the Scrypt algorithm for mining. This is intended to thwart the dominance of Application-Specific Integrated Circuits (ASICs) in mining. The design fosters broader network participation and makes Litecoin more amenable to individual miners utilizing readily available consumer-grade hardware, such as Graphics Processing Units (GPUs).

Block Time and Transaction Speed

Litecoin boasts of a faster block generation time, an average of about 2.5 minutes per block. This expedited confirmation process translates to quicker transaction processing and a more responsive network experience.

Coin Supply

Litecoin has a maximum supply of 84 million coins. Compared to Bitcoin’s limit of 21 million, this expanded supply was implemented to promote a more equitable distribution and to preserve a sufficient degree of scarcity.

SegWit Upgrade

Litecoin was among the pioneers in adopting the Segregated Witness (SegWit) upgrade. This enhancement reduced the network transaction fees, bolstered security, and increased the blockchain’s capacity by decoupling transaction data from witness data.

Litecoin Vs Bitcoin: Key Differences

As the earliest cryptocurrencies, Litecoin and Bitcoin exhibit a variety of similarities, as well as distinct differences that contribute to the unique roles they play within their ecosystems. Let’s take a look at some of the similarities they share first. 

Similarities Between Bitcoin and Litecoin 

• Blockchain-based Assets: Both BTC and LTC are cryptocurrencies operating on their own blockchain networks, a public ledger of transactions. Thus, earning the layer-one tag.
• Consensus Algorithm: Both assets use Proof of Work (PoW) as their consensus mechanism to secure the network and validate transactions.
• Open-source: Litecoin and Bitcoin are open-source projects. This means that anyone can view, copy, or contribute to the code with which they were developed.
• Halving Events: Both cryptocurrencies undergo halving events, roughly every four years, to reduce mining rewards. This helps to control inflation and stimulate scarcity over time. Bitcoin halves approximately every 210,000 blocks while Litecoin’s halving takes place every 840,000 blocks.
• Finite Supply: Both LTC and BTC have a fixed maximum supply. Bitcoin is capped at 21 million coins while Litecoin has a limited supply of 84 million coins (four times bitcoin’s supply).
• Divisibility: These two cryptocurrencies can be divided into very small units, making micro-transactions possible. You can invest in less than one BTC or LTC and even make transactions with your funds, no matter how small they are. This is a feature absent in traditional finance as fiat currencies cannot be divided into very tiny units.

Bitcoin’s smallest possible unit is a satoshi (often abbreviated as sat), named after the project’s pseudonymous founder, Satoshi Nakamoto. One BTC is equal to 100 million sats. Litecoin’s smallest unit, litoshi, is equivalent to 0.00000001 LTC.

• Peer-to-Peer (P2P): Bitcoin and Litecoin are designed to function as peer-to-peer payment systems, allowing users to send value directly without the need for intermediaries as in traditional financial banks.
• Decentralized Networks: Neither Bitcoin nor Litecoin is controlled by any central authority. Both ecosystems are maintained by decentralized networks of miners and nodes.
• Similar Codebase: Litecoin was originally forked from Bitcoin’s source code, leading to a shared structure and many technical foundations.
• Store of Value: Both assets are regarded as potential stores of value, although Bitcoin is more commonly recognized for this role.
• Medium of Exchange: Litecoin and Bitcoin were both designed to serve as digital currencies for online payments and value transfers.
• Multi-platform Wallets: Many crypto wallets and exchanges support both BTC and LTC, making them easy to store and trade.

Differences Between Litecoin and Bitcoin 

Owing to the fact that Litecoin was inspired by Bitcoin, the two assets share many similarities. Despite this, Litecoin’s blockchain has some modifications that make the two different in several ways. These differences influence their functionality and use cases:

• Creation History: Bitcoin was created in 2009 by the pseudonymous individual or group, Satoshi Nakamoto. Litecoin was launched two years later, 2011, by former Google engineer  Charles Lee.
• Algorithm Used: Bitcoin uses SHA-256 (Secure Hash Algorithm 256-bit), the most widely used cryptographic hash function and mining algorithm, for its Proof-of-Work (PoW) consensus protocol. This algorithm requires high computational power and is dominated by Application-Specific Integrated Circuit (ASIC) miners.

On the other hand, Litecoin uses the Scrypt algorithm for PoW. This consensus mechanism is more memory-intensive and was initially designed to be ASIC-resistant, although now there are Scrypt ASIC miners too.

• Mining: As a follow-up to the point above, both Litecoin and Bitcoin can be mined. However, Bitcoin can only be mined by individuals who have elaborate mining hardware while Litecoin mining is open to almost everyone who have internet access
• Block Generation Time: This is another important modification that distinguishes Litecoin from Bitcoin. In the Bitcoin network, a new block is created approximately every 10 minutes. Litecoin, on the other hand, creates a new block every 2.5 minutes. This is four times faster than Bitcoin and has made LTC more suitable for everyday payments.
• Maximum Supply: Bitcoin has a fixed supply of 21 million coins, while Litecoin boasts of a capped supply four times that of Bitcoin’s, 84 million coins.
• Market Position and Adoption: Bitcoin is often referred to as “digital gold” due to its widespread adoption in the cryptocurrency market as a store of value and hedge against inflation. Litecoin, however, takes a lower position as “the silver to Bitcoin’s gold”. It is the 24th largest cryptocurrency by market capitalization and is used for smaller, everyday transactions.
• Transaction Fees: Bitcoin generally incurs higher transaction fees, especially during network congestion. On the other hand, Litecoin has lower transaction fees, making it more cost-effective for small payments.
• Development and Upgrades: Bitcoin is very conservative about implementing new technologies. This is why upgrades in the network are usually slow and heavily debated. Litecoin, on its part, is more experimental. The network adopted SegWit earlier than Bitcoin, and implemented MimbleWimble Extension Blocks (MWEB) for privacy and scalability.
• Privacy Features: Bitcoin lacks built-in privacy features, offering a fully transparent blockchain. Litecoin, on the other hand, introduced optional privacy with MimbleWimble (MWEB), making transactions more confidential if users prefer that feature.

In summary, while Bitcoin and Litecoin share foundational similarities, their unique features, purposes, and development philosophies offer diverse opportunities within the cryptocurrency landscape, allowing users to make a choice based on their unique needs and preferences.

Litecoin Vs Dogecoin 

Let us discuss some similarities and differences between the layer-one network, Litecoin (LTC), and the world’s first memecoin, Dogecoin (DOGE).

Similarities 

• History: Both cryptocurrencies trace their history back to Bitcoin, serving as their foundational base. Litecoin emerged directly as a fork of Bitcoin. Dogecoin, on the other hand, was created using the open-source code from Litecoin.
• Consensus Mechanism: Both Litecoin and Dogecoin utilize the Proof-of-Work (PoW) consensus protocol, indicating that both LTC and DOGE are mined. Furthermore, both projects employ security mechanisms to safeguard transactions and data, making them immutable.
• Transaction Speed: Both cryptocurrencies facilitate rapid transaction speeds, ensuring quick digital transactions.

Differences

Beyond coin valuation, the fundamental differences between Litecoin and Dogecoin lie in their core attributes:

• Circulating Supply: Litecoin currently has a circulating supply of over 75 million LTC coins and a maximum supply capped at 84 million. Dogecoin, on the other hand, has a circulating supply of over 148 billion DOGE coins and an indefinite maximum supply at the time of writing.
• Market Capitalization: Data from CoinGecko reveals that Litecoin currently has a market capitalization of over $7 billion, while Dogecoin has a higher figure, more than $27 billion by market capitalization.

Litecoin’s Recent Developments 

• 300 Million Transactions

 In January 2025, Litecoin reported that it processed its 300 millionth transaction, showing that more and more people are using the network.

• Litecoin ETF Acknowledgement

The U.S Securities and Exchange Commission (SEC) recently acknowledged Canary Capital’s proposal for a spot Litecoin exchange-traded fund (ETF).  This development followed Nasdaq’s recent submission of 19b-4 forms to the SEC, seeking to list CoinShares’ XRP and Litecoin ETFs.

Should these ETFs be approved, they could furnish institutional investors with novel avenues for gaining exposure to Litecoin, potentially amplifying liquidity and bolstering demand for the asset. Details of the news revealed that the SEC’s acknowledgement met a price increase in the asset, over 19% in 24 hours. It has also bolstered investor optimism, as market sentiments suggest a belief that a Litecoin ETF will secure approval before the end of 2025.

To know why crypto ETFs hold so much value in the market, read this detailed guide to learn about spot Bitcoin ETFs. You can also learn about Ethereum ETFs in this beginner-friendly article.

• Telegram Wallet

On March 24, 2025, Litecoin announced that the cryptocurrency is now available in Telegram’s internal cryptocurrency wallet maintained by the Toncoin team. This wallet currently boasts over 100 million users and may contribute to Litecoin’s market adoption and upward price movement.

Use Cases of Litecoin (LTC)

• Payments: Litecoin facilitates secure and efficient online payments. The network’s speed, combined with swift transactions and minimal fees, positions Litecoin as an ideal solution for everyday digital transactions. The acceptance of Litecoin as a payment method is steadily growing, with companies such as eGifter, Snel, and Travala integrating the cryptocurrency into their payment systems.
• Investment Option: Litecoin boasts of high liquidity and speed, making it an attractive investment option. While not a guaranteed path to wealth, Litecoin offers a viable option for diversifying investment portfolios.
• Non-fungible Tokens (NFTs): Litecoin entered the NFT space in 2023 when developers forked a Bitcoin NFT collection onto the network, marking its first foray into NFTs since its inception in 2011.
• Decentralized Finance (DeFi) and Smart Contracts: Litecoin’s high liquidity positions it to play a significant role in smart contracts and DeFi, such as lending, trading pairs, and cross-chain functionality.
• E-commerce Integrations: Litecoin’s speed, cost-effectiveness, and security features make it a valuable asset for e-commerce businesses and startups seeking to expand their payment options and provide a more seamless shopping experience for their customers. E-commerce platforms that accept cryptocurrencies, such as ZenCart, have already integrated Litecoin payment gateways.

What is Litecoin Mining?

Litecoin mining is the process involved in validating transactions and incorporating them into the Litecoin blockchain. Miners employ specialized hardware and software solutions to tackle intricate mathematical challenges, referred to as hashes, for the purpose of generating new blocks.

These blocks of transactions encompass a chronological record of the most recent transactions and are subsequently appended to the blockchain. The mining procedure involves discovering a specific hash value that satisfies the criteria stipulated by the Litecoin protocol.

Miners engage in a competitive endeavor to be the first to identify the correct hash, with the victor being compensated with a predetermined quantity of Litecoins. This mechanism guarantees the security and maintains the integrity of the Litecoin network.

Litecoin Staking Explained 

While Litecoin staking isn’t natively supported on its blockchain because of its Proof-of-Work (PoW) design, you can still generate returns on your Litecoin holdings. This can be achieved by utilizing third-party platforms and decentralized finance (DeFi) protocols. For instance, DeFi lending platforms, such as Nexo, enable users to lend out their Litecoin and accrue interest on their assets.

Litecoin Price Prediction for 2025

Litecoin’s price has experienced numerous fluctuations since the asset was launched over a decade ago. From an all-time low of $1.15 in 2015 to an all-time high of $410.26 in 2021, and with a current price of around $93 (subject to volatility), the cryptocurrency has experienced several notable price movements. This suggests that even though the crypto market is quite unstable, the network’s features have played a huge role in enabling it to stay relevant in the industry.

Market trends and regulatory changes, such as the SEC’s approval of a Litecoin ETF before the end of 2025, could influence the project’s price. Considering these factors, crypto analysts predict that the price could rise as high as $201.25 or settle at a low of $186.62 in 2025.

How to Buy Litecoin (LTC)

You can buy Litecoin (LTC) on various cryptocurrency exchanges, including Binance, Coinbase, Bybit, Bitget, OKX, KuCoin, and others. Regardless of the buying platform you choose, here is a general step-by-step guide on how to buy Litecoin without any struggles:

• Choose your preferred cryptocurrency exchange: Do research to find a suitable (safe and reputable) crypto exchange to buy your coins. We strongly recommend Binance if available in your country.
• Create an account and complete the Know Your Customer (KYC) verification process.
• Fund your account with the amount you need to buy the coins: Common methods include transferring fiat currency through credit card transactions, initiating a bank transfer, or transferring some stablecoins from another wallet to the exchange.
• Proceed to buy LTC directly on the platform 
• Move your LTC to a safe cryptocurrency wallet to secure your funds.

How to Sell Litecoin (LTC)

Here is how to convert your Litecoin (LTC) into fiat currency with ease:

• Log in to your cryptocurrency exchange account. For instance, you can create a Binance account if you do not already have one.
• Specify the Litecoin amount: Indicate the quantity of Litecoin you wish to exchange for fiat currency.
• Select your preferred fiat payout method: Choose your desired method for receiving your funds.
• Provide essential information: Supply the required details, such as your wallet address and bank account information.
• Review and finalize the transaction: Carefully examine the transaction details and confirm your agreement.
• Receive your fiat currency: Your fiat currency will be deposited into your designated account.

What is a Litecoin wallet?

A Litecoin wallet is a digital wallet designed for users to manage, trade, send, receive, and store securely the keys to their LTC tokens. The wallet itself does not physically house Litecoin. Rather, it safeguards the private keys necessary to access your coin holdings on the blockchain. Envision it as a secure vault diligently protecting the keys to your funds.

Choosing the right Litecoin wallet is germane to interacting with the Litecoin network, executing fast and low-cost transactions and securing your investment funds.

• Securing your LTC Tokens: Litecoin wallets allow you to keep your tokens safe from malicious individuals by giving you full control of your private keys.
• Interacting with the Litecoin Network: Litecoin processes payment transactions faster and cheaper than Bitcoin and Ethereum. Thus, a wallet that supports the network would allow you to interact with it and process transactions seamlessly.

Numerous wallet options exist for Litecoin, spanning from convenient mobile wallets to more robust hardware wallets. This allows investors to select based on their specific usage and storage preferences.

Common mobile crypto wallets that support Litecoin (LTC) include Litewallet, the official Litecoin wallet, Coinbase wallet, Trust wallet and Atomic Wallet and others. A popular hardware wallet is Ledger.

How to Create a Litecoin Wallet

Although the specific setup process varies slightly across different wallets, the fundamental steps remain largely consistent. Provided below is a general guide on how to create  a Litecoin wallet:

• Select a crypto wallet: Review your investment needs and choose a reputable and secure crypto wallet that meets them. Some popular options include Trust Wallet and Coinomi
• Follow the instructions as prompted to create your new wallet.
• Fund your wallet and manage your LTC.
• Secure your wallet: Implement robust security measures to protect your wallet and, by extension, your crypto assets. During wallet setup, always create strong and unique passwords. Additionally, enable two-factor authentication (2FA) if available. Crucially, keep your recovery phrase strictly confidential, as it serves as the key to recovering your LTC, should you forget your password or lose access to your device.

Challenges Facing Litecoin

Since the time it was launched, Litecoin (LTC) has always been viewed in connection to Bitcoin. As one of the first cryptocurrencies in the industry, the network has become known as a reliable, faster, and cheaper payment option. 

Considering that the crypto space has greatly evolved over the years, the project has faced some challenges, such as these:

• Persistent Market Volatility: Following its all-time high price in 2021, Litecoin’s value has faced downward pressure, creating uncertainty among investors.
• Rising Competition from Blockchain Innovations: The advent of new-generation blockchains, such as Solana and SUI, and blockchain projects is introducing a new era of competition in the cryptocurrency space. These technologies are extending the limits of efficiency, automation, and smart contract functionalities. This suggests that Litecoin needs to innovate further to maintain its competitive edge.
• Regulatory Uncertainty: While Litecoin has largely avoided significant regulatory setbacks, the broader cryptocurrency sector remains susceptible to evolving regulatory policies. Any adverse legal developments could impede Litecoin’s adoption and growth trajectory.

What is the Future of Litecoin?

As the second-oldest cryptocurrency in history, Litecoin has withstood the test of time and experienced its fair share of ups and downs in the industry. Considering that it has continued to exist despite all these years is an indication of a good long-term investment potential. Moreover, the project has a limited total supply of coins, indicating that the price may go up over time.

However, the market is unstable and very unpredictable. Factors such as regulatory adjustments and market trends can lead to significant changes in Litecoin’s ecosystem in the future. In essence, although Litecoin appears to have good potential for future growth, only time can tell what will really happen.

Frequently Asked Questions 

• Who is the owner of LTC?

LTC has no owner because it is a digital currency built on a decentralized blockchain platform. The project, however, was developed by a MIT graduate and former Google engineer, Charles ‘Charlie’ Lee, in October 2011.

• Should I invest in Litecoin?

Litecoin offers stability and growth potential in the cryptocurrency industry. However, it also faces challenges such as market volatility, regulatory uncertainty and the rise of AI-powered cryptocurrencies. Thus, it is important to do careful research before buying the asset while bearing in mind to invest only what you can afford to lose.

• Is LTC mining profitable?

Yes, LTC mining is profitable. Miners always receive block rewards for their services. Currently, they earn 6.25 LTC each time they successfully process a block of transactions. All you need to get started is the right setup which includes internet access. 

• Can I mine Litecoin on my phone?

Yes, you can mine Litecoin on your phone. To get started, download a mining application compatible with mobile devices. Next, create a crypto wallet to store your mined coins. Finally, join a mining pool, a group of miners, to start mining.

Bear in mind that mining Litecoin on your phone may not be as fast as using a dedicated mining rig. However, it can be a rewarding experience for those who love to be adventurous.

• How much is LTC’s mining fee?

LTC’s mining or transaction fee ranges between $0.01 and $0.05 per transaction.

• What is Litecoin used for? 

Among other things, Litecoin is used as a cryptocurrency investment option and to facilitate secure and decentralized payments.

Bottom Line

Litecoin was designed to serve as an alternative to Bitcoin. Over the years, the cryptocurrency has seen major changes and challenges involving network upgrades and price movement.

As with other cryptocurrencies, it is essential to have adequate information before investing in Litecoin. This article contains everything you need to get started.

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