Understanding Litecoin Cash – Inside the recent Fork
February 27, 2018 by Janhavi Arora
Litecoin is an open source software project released under the MIT/X11 license. It is a peer to peer cryptocurrency. Creation and transfer of coins under this cryptocurrency are not managed by any central authority. Rather it is based on an open source cryptographic protocol. It enables near zero cost payments to anyone in this world. This coin is inspired by, and is nearly identical to Bitcoin except a few other changes originally designed with merchants in mind ,differing primarily by having a decreased block generation time (2.5 minutes), increased maximum number of coins, a different hashing algorithm (scrypt, instead of SHA-256)and a slightly modified GUI.
Its initial release was on 7 October 2011. In January, Litecoin released a new version featuring code for SegWit and an activation threshold of 75% of miner signalling. It is latest released on 21 November 2017. It was released via an open source client on GitHub by Charlee Lee, a former Google employee. During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.
The coin reached a $1 billion market capitalization in November 2013. In May 2017, Litecoin became the first of the top 5 (by market cap) cryptocurrencies to adopt Segregated Witness (Segwit)
Differences From Bitcoin
- The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin’s 10 minutes. The developers claim that this allows the coin to have faster transaction confirmation.
- Litecoin uses scrypt in its proof-of-work algorithm, a sequential memory-hard function requiring asymptotically more memory than an algorithm which is not memory-hard.
While bitcoin is struggling hard to secure the needed levels of support from miners for the upgrade, the coin has almost reached the necessary threshold. It was never intended to replace Bitcoin but to complement it like the silver to Bitcoin’s gold.
One important aspect of the project is that its founder, Charlee lee as mentioned above is very famous. He is known by everyone and he actively participates in the cryptocurrency community. Whereas the anonymous creator of Bitcoin, Santoshi Nakamoto has disappeared and isn’t able to provide leadership and guidance to the technical direction of Bitcoin. Having the founder available is important when it comes to helping others understand and rally behind Litecoin’s vision. It can be easily purchased and sold on a number of exchanges using all types of currencies.
Numerous forks in the cryptocurrency chains over the past few years have been seen.However, one cryptocurrency that has so far escaped from forking was Litecoin which is the second oldest cryptocurrency in the ecosystem. But it too has been forked now. Litecoin Cash came into existence on February 18, 2018, Sunday in London, the United Kingdom more than six months after Bitcoin Cash – a fork of Bitcoin – was created The main reason for the fork was to provide a better SHA 256 coin. Litecoin Cash is designed to have lower transaction fees and better difficulty adjustments than Litecoin. Although the developers stated that this is not an official Litecoin project and they are merely using Litecoin in the name to keep up with the tradition of other cryptocurrency forks.
The fork changed the hashing algorithm that is being used on the Bitcoin network and is different from the Scrypt algorithm on Litecoin. The network will use a new address prefix and replay attack prevention to eliminate inter-chain issues and minimize user confusion. There is a claim ratio of 10:1 which implies that for every1 Litecoin that you hold, you will receive 10 of Litecoin Cash (LCC).There is also a minor premine of only 1% of the coins that will be used for the development fund.
The snapshot block occurred at block 13711111.All existing Litecoin holders were credited with ten LCC tokens for every LTC they held at the time of the fork, but only if you used a Litecoin wallet that allows access to your private keys.f your LTC is stored by a third party such as an exchange, then you must inquire with them about claiming your Litecoin Cash.
Litecoin Cash will have a supply of 840 million coins, which is 10 times the amount of Litecoin. The team have stated that they do not wish to compete with Litecoin directly, warning users that they should be very careful and never split coins from their Litecoin address.Transactions are promised to be 90% cheaper than Litecoin. Litecoin rallied, climbing to its highest in more than a month following the Litecoin Cash hard fork that took place on Sunday.The altcoin price rose to as much as $253.90
Litecoin cash is appearing to have substantial interest from the investors with Bitcoin Cash repeatedly ranking as one of the top five cryptocurrencies by market capitalization (market cap) on CoinMarketCap.
However hard forks are essential. With these forks, a completely new version of the currencies can be created and can be modified with slight advantages. Hard forks like the one that produced Litecoin cash spark the interest of the investors as stated above. More and more investors try to invest in these because they are sure of their return.
However, Litecoin’s creator Charlee Lee tweeted a few days ago that the fork can be a scam. He stated that no problem is being faced by Litecoin in any terms. All the investors were bit confused about it but now it has finally been forked and is showing tremendous results just in such a short time.