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.
They gave everyone their chance at being an "early adopter", they preannounced Litecoin several days ahead of launch day for you to be able to prepare your mining setup on our Testnet. There have also been no more than two blocks mined ahead of release; the genesis block followed by a block to verify it
- Proof of Work
- Litecoin uses Scrypt as a proof-of-work scheme. Scrypt uses the low-latency cache memory of modern processors to provide greater hash-speeds on CPUs in comparison to GPUs. We would like to extend our thanks to ArtForz for the implementation.
- 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 merchants get faster confirmations for their online products.
- Command-line Miner
- If you would like to squeeze every last piece of performance out of your processor, you can download and compile ArtForz's branch of Jeff Garzik's command-line cpuminer which is optimized for the scrypt cryptographic algorithm.
- Wallet Encryption
- Fresh from the Bitcoin codebase is encryption, which allows you to lock down only the private keys in your wallet, so that you can still see new transactions and your account balance, but are required to enter your encryption key in order to spend. This serves as not only a protection to dumb trojans, but also a sanity check before sending all your funds away.
- Miners will generate 50 coins per block. In light of our faster blocks, to properly mimic Bitcoin's generation trajectory, the amount of coins generated gets halved every 840,000 blocks. For those of you doing the math, Litecoin is scheduled to produce roughly 4 times as many coins as Bitcoin, about 82 million litecoins.
According to some people, the only difference from Bitcoin is replacing the SHA256 proof-of-work with scrypt, making it more vulnerable to attack from rich entities (on the scale of big corporations and governments).