Bitcoin and Litecoin
A lot of people are wondering; what’s the deal with the litecoin?
Bitcoin isn’t the only cryptocurrency out there. An alternative called Litecoin is starting to gain traction.
Bitcoin and Litecoin are incredibly similar. Both are decentralized electronic currency, meaning that they aren’t linked in any way to big banks. They’re independent. And where the money supply of US dollars is always fluctuating, both Bitcoin and Litecoin will reach eventually reach a gross sum and maintain a finite, unchanging supply. And just like Bitcoins, Litecoins are store in virtual wallets and can be used for purchase online.
Some people are already speaking of Litecoin as the silver to the gold (which is Bitcoin). Just like in the physical silver and gold markets, Litecoin is trading at less than Bitcoin, but there’s more of it.
Litecoin is gaining popularity because of the ways it differs from Bitcoin. One of Litecoin’s most significant claimed improvements over Bitcoin is that it allows transactions to be confirmed as legitimate much more quickly. Litecoin is able to process a block every 2.5 minutes transactions more quickly, rather than Bitcoin’s 10 minutes.
The way the currencies are secured is different too.
Bitcoin uses the highly parallelizable SHA256 hash function, and therefore Bitcoin mining is a GPU-friendly task. Litecoin uses scrypt instead of SHA256 for proof of work. The scrypt hash function uses SHA256 as a subroutine, but it also depends on fast access to large amounts of memory rather than depending just on fast arithmetic operations, so it is hard to run many instances of scrypt in parallel by using the ALUs of a modern graphics card. GPUs still do prove useful for Litecoin mining, though the improvement over CPUs is less significant than it was for Bitcoin mining.
The purpose of Litecoin is to function as silver to Bitcoin’s gold, in the sense of being a relatively less valuable coin that is easier to obtain and transact with.