How Litecoin is Technically Different from Bitcoin

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How Litecoin is Technically Different from Bitcoin

The Scrypt Algorithm

Litecoin uses a Scrypt based proof-of-work. Scrypt adds memory-intensive algorithms in order to reduce the effectiveness of the GPUs, which is widely used with Bitcoin also. This means that the Litecoin were mined mainly by the CPU, at least initially. The technique of mining with CPUs was overtaken by software-based GPU with greater energy efficiency. This led to an increase of at least ten times the hashing power in the network. Litecoin currently dominates the GPU mining sector, and is soon to adapt ASIC Scrypt mining as well.

Scrypt is less common and therefore less analyzed than SHA2 hashing algorithm used in Bitcoin. This raises some concerns for any weaknesses in the cryptographic system that could be discovered in the future.

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Speed of the blocks
The block chain of Litecoin differs heavily from Bitcoin as it generates block every 2.5 minutes on average (rate four times greater than Bitcoin). It should however be noted that, compared to Bitcoin, more blocks are needed to get the same confirmation (Litecoin blocks are not equivalent to the blocks of Bitcoin).Unfortunately, this increases the number of hashes that do not use software mining to create new blocks, reducing the overall efficiency.

84 Million Litecoins
Litecoin started with generations of 50 coins per block likewise Bitcoin. But to keep the rate of inflation in control, the block reward is halved every 840,000 blocks. As a result, the prediction is that the network will produce a total of 84 million Litecoins.

Different Addresses
Litecoin addresses starting with L because of their version number, otherwise, would be generated in a manner identical to the Bitcoin addresses.

Pre-mining (Mild)
Litecoin has two pre blocks extracted. Only more than one minimum block can be generated that is needed to start a chain of blocks.

To contact the writer of the article: Yashu Gola at yashu@forexminute.com