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The world’s first ever cryptocurrency was bitcoin. It was launched by Satoshi Nakamoto in 2009. Its code is open source which means that anybody can modify it and use it freely for other projects. Since then, other people have launched different cryptocurrencies with modified versions of the code, with different levels of success.
In 2011, Charles Lee launched Litecoin with the aim of it being “the silver to bitcoin gold.” Litecoin has the second highest mining cap after Bitcoin.
Litecoin is generated by mining just like Bitcoin. The goal of creating Litecoin were to improve Bitcoin. For end-users, the primary difference is the 2.5-minute time taken to produce a block, unlike Bitcoin’s 10 minutes. Charles Lee, the founder of Litecoin, works for Coinbase now—one of the most used online Bitcoin wallets.
For miners, the fundamental difference between Litecoin and Bitcoin is the proof of work algorithm. Bitcoin has incorporated the SHA-256 algorithm which mainly uses calculations that can be significantly accelerated in parallel processing. This feature has made the race in ASIC technology intense and has raised Bitcoin difficulty level.
Litecoin, on the other hand, has incorporated the Scrypt algorithm, originally “s-scrypt” but pronounced as “script.” This algorithm is composed of the SHA-256 algorithm but has much more serialized calculations. Scrypt favors massive amounts of high-speed RAM as opposed to raw processing power only. This is why it is known as “Memory Hard Problem.”