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 cryptocurrency that is considered silver to Bitcoin’s gold. LTC aimed to maintain the unique traits and attributes of Bitcoin, while adding to the mixture GPU-resistant mining and a 2.5 minute block rate. This meant that Litecoin wouldn’t have a reason to compete with Bitcoin for the used up computational cycles of your graphics card, but working independently on your processor instead. LTC uses a memory hard hashing algorithm called scrypt. The algorithm utilizes SHA256 and a stream function called salsa20 to force devices that mine it to use a lot of memory or dramatically more ALU cycles to perform a hash.
Started out to be CPU only
LTC was stated to be GPU resistant and started out to be a CPU only coin. However, in late 2011 a solidcoin programmer made the reaper miner which was capable of mining using the GPU at good hashrates. The performance gain was not as big as with bitcoin but a decent GPU can mine at least 5-10 times faster than a CPU. Since then more and more GPU miners started to move to Litecoin, the coin is still pretty small with low and volatile exchange rates but has a good chance to grow. LTC is now a good alternative to Bitcoin where the FPGAs and ASICs are rolling in raising the network difficulty so much that mining bitcoin with a GPU is becoming less and less profitable very quickly.
- 50 Coin reward per block
- 21 million coins will be available
- Block target is 2.5 minutes so a new block is generated every 10 minutes on average
- Difficulty adjusts every 2016 blocks, approximately every 3.5 days
- Hashing protocol is Scrypt
- Launch Date: October 7th, 2011
Because LTC uses a different algorithm it is not mined in the same way as bitcoin. Litecoin can currently be mined with a CPU and a GPU where the GPU is more efficient if you look at hashes per Watt. De difference between CPU and GPU isn’t as big as with bitcoin though. If you want to get started with mining you can check out one my guides:
ASICs and FPGAs for Litecoin?
With the scrypt parameters used in litecoin’s implementation (N = 1024; p = 1; r = 1), each thread needs about 64-128 KB depending on the lookup_gap and thread_concurrency settings when mining with a GPU. This makes litecoin actually ideal to mine with a GPU, GPUs have very fast memory (bandwidths going into hundreds of GB/s) and generally 128-512 KB RAM per stream processor. Due to the fast memory requirement Litecoin is pretty FPGA and ASIC resistant, ASICs may come out one day for Litecoin but they wont have the same peformance gain as the have for Bitcoin. Fast memory is generally expensive and due to the smaller performance gain it is probably not be worth the investment on the short term.
Currently Litecoin can be traded on these exchanges with BTC-e having the highest volume. Mt.Gox also confirmed that they will start supporting Litecoin within the near future.
The Litecoin Client
The Litecoin client can be downloaded here