The better Bitcoin? This is behind Litecoin

A physical Litecoin: Bitcoin's "little brother" wants to make paying with cryptocurrencies easier and faster.

A physical Litecoin: Bitcoin’s “little brother” wants to make paying with cryptocurrencies easier and faster. (Source: agefotostock/imago-images-bilder)
A payment with Bitcoin takes ten minutes – too long, according to the inventor of Litecoin. He developed a currency that was supposed to be faster and cheaper.

Cryptocurrencies are intended to make payments easier, safer and more digital. But do you want to stand at the checkout for ten minutes until your coffee is paid for (and cold)? If Bitcoin were to become established as a means of payment, this would be a conceivable scenario: an average transaction, i.e. a payment, takes an average of ten minutes for the largest cryptocurrency.

Litecoin is supposed to help here . The goal of the cryptocurrency, which the American computer scientist Charlie Lee invented in 2011, is simple and ambitious: Litecoin should be the better, cheaper and faster Bitcoin.

What is Litecoin?

Litecoin is an open-source, decentralized cryptocurrency based on blockchain technology. This was created from the Bitcoin blockchain, so it is a kind of decoupling of Bitcoin. In expert circles, this process is called a hard fork. An example of another hard fork of Bitcoin is Bitcoin Cash .

  • Important: A hard fork involves changing the blockchain of a cryptocurrency. The old blocks no longer allow the blocks of the changed blockchain for the old system, i.e. for the original currency. If enough users accept the new blocks, a new currency will be created. This shares the past with the original currency – such as Bitcoin – but the blockchains go separate ways for the future.

What can Litecoin do better than Bitcoin?

Litecoin is faster and cheaper in processing payments than its “big brother” Bitcoin. There are several reasons for this, including:

  • more transactions,
  • better scalability,
  • simpler algorithm,
  • higher cap of coins.

A major criticism of Bitcoin is its lack of scalability. In simple terms, this means that the cryptocurrency cannot adapt well to increased demand for payment processes. Scalability includes aspects such as how much data can be processed in a period of time, how long a payment takes and how secure your payment is. Read how cryptocurrencies work here.

Litecoin promises the solution here: The blocks of the cryptocurrency are smaller and a new block is created every two and a half minutes – making the currency four times as fast as Bitcoin.

Because payments are stored and encrypted on the blocks of the blockchain, Litecoin can process many more payments in less time. For you as a user, this means: your coffee will no longer get cold when you pay, and you no longer have to be prepared for as long waiting times as with Bitcoin.

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The algorithm that encrypts the individual blocks is also less complicated and therefore faster than Bitcoin. We will explain to you here how a blockchain works in detail .

The more complex the algorithm, the more securely the transactions are encrypted. But even if Litecoin has made some compromises here, the currency is still considered safe in expert circles.

Another side aspect of the faster blockchain: A Litecoin is created four times as quickly as a Bitcoin, which is why there are four times as many of them. A total of 84 million Litecoins can be mined and then it’s over.

What advantages does Litecoin have for users?

The modification of the blockchain makes Litecoin more user-friendly for everyday use. The currency is faster during the payment process and can better accommodate higher transaction volumes. It also offers you as a user another major advantage: Due to the less complex structure behind the currency, the fees are significantly lower than with Bitcoin.

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However, very few merchants accept Litecoin as a payment method – a problem that is currently shared by all cryptocurrencies. At the moment, the cryptocurrency Litecoin is still used primarily on the Darknet as an anonymous means of payment.

Does Litecoin have a future?

This is difficult to predict with medium-sized cryptocurrencies. Litecoin is one of the ten most important digital currencies and, like Bitcoin , Ethereum and Cardano, was able to benefit from the uncertainties of the corona pandemic. In mid-March 2020 the price for a Litecoin was still 27 euros , in March 2021 a Litecoin was already worth 166 euros. However, it is now only around 59 euros (as of mid-October 2023).

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However, some industry analyzes continue to expect strong growth for Litecoin. By 2025, an LTC is expected to be worth between $ 437 and $950, depending on the forecast . However, such statements are very difficult to evaluate in the dynamic crypto market. With Litecoin, there are factors that could speak for growth, but also some negative development possibilities

Opportunities for Litecoin are:

  • Mining is easier than Bitcoin. This means more people can actively participate in the network.
  • The founder, Charlie Lee, is highly respected in the industry. For Litecoin, Lee is said to have quit his job at Google and also retired as technical director of the major crypto exchange Coinbase.
  • Litecoin is traded on all major and important exchanges. All hardware wallets – options for storing the currency offline – also support Litecoin.
  • Paypal also opened up to Litecoin.
  • On the Darknet, more and more users pay with Litecoin than with Bitcoin. This market also helped Bitcoin become more widespread, as many people bought the digital currency to pay anonymously on the Internet. The low fees now make Litecoin more attractive for these customers.

But there are also some risks for Litecoin:

  • Bitcoin as its big brother and largest digital currency is difficult to overcome.
  • Litecoin is considered a test track for Bitcoin. Innovations and facilitations that prove themselves in Litecoin’s blockchain are then also adopted by Bitcoin. This means that Litecoin loses its unique selling point.
  • Litecoin is not the only hard fork of Bitcoin that enables fast payments. Bitcoin Cash split from Bitcoin in 2017 and is hot on the heels of Litecoin.
  • The Litepay scandal has lost user trust. Here the developers of Litecoin announced new technological innovations in 2018, which they were ultimately unable to implement. The price then collapsed sharply.
  • Increased use on the dark web can lead to reputational damage. Bitcoin still has the stigma of being a “criminal currency”, although many well-known investors are now betting on the cryptocurrency. If Litecoin replaces Bitcoin on the dark web, it could also inherit a reputation as a criminal currency.

Litecoins are currently significantly cheaper than the major currencies Bitcoin and Ethereum. It is therefore much easier for you as an investor to purchase an entire Litecoin than an Ether or Bitcoin.However, Litecoin also lacks the support of large investors to the extent that they enjoy Ether and Bitcoin. As with other cryptocurrencies, an investment offers you as an investor opportunities, but also risks.


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