The Basics of Litecoin
Litecoin is a peer to peer cryptocurrency that is open source software that was released under the MIT/X11 license. Litecoin is created and is transferred on an open source, which means that is not managed by any central authority.
There are three key differences between Litecoin and Bitcoin.
The first is that the Litecoin network aims to process a block every 2.5 minutes which beats Bitcoins 10 minutes. This then according to the developers allows for faster transaction confirmation. However, the downside to this is that there is an increased blockchain size and increase in the number of orphaned blocks. The advantages though include a greater resistance to a double spending attack over the same period at Bitcoin, but this will only work if both of the networks have the same hash rate.
Litecoin in its proof of work algorithm uses a scrypt, which is a sequential memory hard function that requires asymptotically more memory than an algorithm that is not memory hard.
The Litecoin network will also be able to produce 84 million litecoins. This is then four times the currency units that the Bitcoin network will produce.
The transactions on Litecoin are handled by a peer to peer network as well as the balances and issuance through scrypt which is the proof of work scheme. A geometric series is formed through the issuing rate and the rate will then half every 840 000 blocks every four years or so which then reaches the final total of 84 million LTC.
Litecoins are traded as a flat currency as well as for other cryptocurrencies for online exchanges. Credit card reverses are not used by litecoins as the transactions with Litecoins are irreversible.
In the Litecoin network, payments are made to addresses. These are Base 58 encoded hashes of the user’s public keys.
The Litecoin blockchain records the Litecoin transactions. Every 2.5 minutes a new block is added. A transaction is generally counted as complete after every six blocks or 15 minutes.