Difference between revisions of "Litecoin"
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== What is Litecoin? == | == What is Litecoin? == | ||
Litecoin is the result of some of the bitcoin community who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. They wanted to make a cryptocoin that is considered silver to Bitcoin's gold. | Litecoin is the result of some of the bitcoin community who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. They wanted to make a cryptocoin that is considered silver to Bitcoin's gold. | ||
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Litecoin manages to maintain the unique traits and attributes of Bitcoin, while adding to the mixture CPU-specific mining and a 2.5 minute block rate. This means that Litecoin doesn't have to compete for the used up computational cycles of your graphics card if you're already mining Bitcoins, but can work independently on your processor. | Litecoin manages to maintain the unique traits and attributes of Bitcoin, while adding to the mixture CPU-specific mining and a 2.5 minute block rate. This means that Litecoin doesn't have to compete for the used up computational cycles of your graphics card if you're already mining Bitcoins, but can work independently on your processor. | ||
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| − | == | + | == Differences from Bitcoin == |
| − | + | ||
| + | === (Slight) Premining === | ||
| + | Litecoin had two blocks premined, one more than the minimum single genesis block needed to start a block chain. | ||
| + | |||
| + | === Scrypt Proof of Work === | ||
| + | Litecoin uses Scrypt as a proof-of-work scheme. | ||
| + | Scrypt adds memory-intensive algorithms to reduce the efficiency of GPUs down to the level of CPUs. | ||
| + | This greatly limits the ability of commodity hardware to mine at high rates, making it easier for big corporations and governments to obtain a monopoly over mining. | ||
| + | |||
| + | === Faster, Smaller Block Chain === | ||
| + | The Litecoin blockchain differs from its Bitcoin counterpart in that it tries to have smaller blocks, and generate them four times as fast as the Bitcoin network allows. | ||
| + | This means that 1-confirmation (low value) merchants get faster confirmations for their online products, but increases the network overhead. | ||
| + | |||
| + | === Total Coinage === | ||
| + | Miners generate 50 coins per block, like Bitcoin. | ||
| + | In light of faster blocks, to properly mimic Bitcoin's generation trajectory, the amount of coins generated gets halved every 840,000 blocks. | ||
| + | As a result, Litecoin is scheduled to produce roughly 4 times as many coins as Bitcoin, about 82 million litecoins. | ||
| + | |||
| + | ==Criticism== | ||
| + | === Redundancy === | ||
| + | Litecoin does not provide anything significant that Bitcoin does not already provide. | ||
| + | Because of this, and Bitcoins much greater size, it is unlikely to gain any significant momentum. | ||
| + | |||
| + | === Vulnerability to mining monopoly === | ||
| + | Because Litecoin has replaced the SHA256 proof-of-work with [[scrypt]], it is more vulnerable to attack from rich entities (on the scale of big corporations and governments). | ||
| + | If Litecoin were to ever become popular, such an attack is inevitable and would negate the benefits of it being a crypto-currency. | ||
| + | |||
| + | === Pyramid scheme === | ||
| + | Since the aforementioned reasons mean Litecoin has no future potential, it effectively functions as a pyramid scheme, rewarding those who get in sooner at the expense of those who adopt it just before it finally fails (and are left with nothing). | ||
| + | This is not the case for Bitcoin, since it has significant potential to become a long-term currency and continually be beneficial to adopters no matter when they begin using it. | ||
==External links== | ==External links== | ||
Revision as of 17:25, 16 November 2011
Contents
What is Litecoin?
Litecoin is the result of some of the bitcoin community who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. They wanted to make a cryptocoin that is considered silver to Bitcoin's gold.
Litecoin manages to maintain the unique traits and attributes of Bitcoin, while adding to the mixture CPU-specific mining and a 2.5 minute block rate. This means that Litecoin doesn't have to compete for the used up computational cycles of your graphics card if you're already mining Bitcoins, but can work independently on your processor.
Differences from Bitcoin
(Slight) Premining
Litecoin had two blocks premined, one more than the minimum single genesis block needed to start a block chain.
Scrypt Proof of Work
Litecoin uses Scrypt as a proof-of-work scheme. Scrypt adds memory-intensive algorithms to reduce the efficiency of GPUs down to the level of CPUs. This greatly limits the ability of commodity hardware to mine at high rates, making it easier for big corporations and governments to obtain a monopoly over mining.
Faster, Smaller Block Chain
The Litecoin blockchain differs from its Bitcoin counterpart in that it tries to have smaller blocks, and generate them four times as fast as the Bitcoin network allows. This means that 1-confirmation (low value) merchants get faster confirmations for their online products, but increases the network overhead.
Total Coinage
Miners generate 50 coins per block, like Bitcoin. In light of faster blocks, to properly mimic Bitcoin's generation trajectory, the amount of coins generated gets halved every 840,000 blocks. As a result, Litecoin is scheduled to produce roughly 4 times as many coins as Bitcoin, about 82 million litecoins.
Criticism
Redundancy
Litecoin does not provide anything significant that Bitcoin does not already provide. Because of this, and Bitcoins much greater size, it is unlikely to gain any significant momentum.
Vulnerability to mining monopoly
Because Litecoin has replaced the SHA256 proof-of-work with scrypt, it is more vulnerable to attack from rich entities (on the scale of big corporations and governments). If Litecoin were to ever become popular, such an attack is inevitable and would negate the benefits of it being a crypto-currency.
Pyramid scheme
Since the aforementioned reasons mean Litecoin has no future potential, it effectively functions as a pyramid scheme, rewarding those who get in sooner at the expense of those who adopt it just before it finally fails (and are left with nothing). This is not the case for Bitcoin, since it has significant potential to become a long-term currency and continually be beneficial to adopters no matter when they begin using it.
External links
Litecoin website
Litecoin forum
Litecoin block explorer
Litecoin network graphs
