What is Litecoin?
Litecoin (LTC) is a cryptocurrency alternative, created by Charles “Charlie” Lee in October 2011. It is a fork of the popular Bitcoin (BTC) and shares many similarities, such as being based on an open-source global payment network that is decentralized and not controlled by any central authority. However, Litecoin differs from Bitcoin in two main ways: it has a faster block generation rate and uses Scrypt as a proof of work scheme instead of the SHA-256 algorithm.
Lee, a graduate of the Massachusetts Institute of Technology and a former Google engineer, became interested in Bitcoin in 2011. He then decided to create a fork of Bitcoin, which became known as Litecoin. The main reason behind its creation was to experiment and have fun with the code base.
The Scrypt proof-of-work algorithm used in Litecoin was originally developed for the Tarsnap online backup system. It was designed to make large-scale hardware attacks on the currency more difficult compared to other algorithms like PBKDF2 or bcrypt.
Lee specifically incorporated this algorithm to avoid the potential vulnerability of Bitcoin to specialized hardware attacks like application-specific integrated circuits (ASICs). However, as the mining industry began to develop specialized hardware for Litecoin as well, the advantage of Scrypt being memory-intensive proved to be less effective.
This was because the introduction of graphics processing units (GPUs) provided the necessary RAM for parallel processing, making it easier to mine Litecoin with specialized hardware.
