What is Litecoin?
Litecoin is a network currency based on “peer-to-peer” technology and an open source software project under the MIT/X11 license. It helps users make instant payments to anyone in the world. Litecoin was designed and programmed by a former Google programmer (Li Qiwei), and it was launched and launched on January 9, 2011. Litecoin is an improved digital currency inspired by Bitcoin. The technical principle of Litecoin is the same as that of Bitcoin. It also adopts a decentralized architecture, without any central agency control, new currency issuance and transaction payment transfer are all based on open source encryption algorithms, etc. These are all design principles that imitate Bitcoin. However, Litecoin has tried its best to improve the shortcomings that Bitcoin has shown before, such as the transaction confirmation is too slow, the total cap is too small, the proof-of-work mechanism leads to the emergence of large mining pools, etc. SHA256 algorithm.
Compared with Litecoin, which aims to improve Bitcoin, Litecoin has three significant differences. First, the Litecoin network can process one block every 2.5 minutes (rather than 10 minutes), thus providing faster transaction confirmation. Second, the Litecoin network is expected to produce 84 million Litecoins, which is four times the amount of currency issued by the Bitcoin network. Third, Litecoin uses the scrypt encryption algorithm first proposed by Colin Percival in its workload proof algorithm, which makes it easier to mine Litecoin on ordinary computers compared to Bitcoin. Each Litecoin is divided into 100,000,000 smaller units, defined by eight decimal places.
Litecoin Similarities with Bitcoin
- Both virtual currency
Like Bitcoin, Litecoin is a virtual currency and has no physical form.
- Decentralized Architecture
Litecoin, like Bitcoin, is a decentralized architecture without any central agency control. New currency issuance, transaction payment, and transfer do not require a central bank or a commercial bank.
- Blockchain technology
Both Bitcoin and Litecoin use blockchain technology, and both have the problem of 51% attack. They use blockchain technology, and all historical records are packaged into individual blocks in chronological order, and then these individual blocks are linked together to form a general ledger. In addition to transaction records, these blocks also contain newly issued Litecoins and transaction fees, which are paid to miners for mining. No matter who digs the block, the newly issued Litecoin and transaction fees contained in the block will belong to the miner, so as to encourage miners to actively participate in the settlement. Blockchain technology is prone to 51% attacks: no matter any organization or even an individual, as long as they control 51% of the total computing power of a virtual currency based on blockchain principles, this person or organization can manipulate the virtual currency arbitrarily of all transactions. If the blockchain only recognizes the person with the largest computing power, whoever has the largest computing power can grab the next block. If an individual or organization controls 51% of the total computing power, it means that no one is better than him. The computing power is stronger, so he can manipulate it at will. Therefore, for a virtual currency based on the principle of blockchain, the more people involved in mining, the more robust it will be, and the more distributed its computing power, the more robust it will be; the fewer diggers, the more fragile it will be, and the more concentrated its computing power, the more vulnerable it will be, and the more concentrated its mining pool will be. It is also more fragile.
- Decentralized anonymous issuance
“Mining” competition, fair competition. Litecoin, like Bitcoin, is a virtual currency based on the principle of blockchain. The issuance of new coins is also decentralized and appears in the form of rewards to miners. The miners participating in the “mining” compete in computing power, and whoever has the stronger computing power can grab the next block and compete fairly. And they are all account anonymous. There is no corresponding relationship between the account and the identity information of the owner.
Litecoin Differences from Bitcoin
- Workload Proof Mechanism
The workload proof mechanism of Litecoin adopts the scrypt algorithm, and the workload proof mechanism of Bitcoin is SHA256. The scrypt algorithm takes longer to calculate and takes up more memory. This algorithm makes it difficult to concentrate computing power, and the miners for mining are more dispersed than Bitcoin, which is conducive to preventing 51% attacks. It is precisely because Litecoin’s scrypt algorithm is different from Bitcoin’s algorithm that Bitcoin chip mining machines cannot be used to mine Litecoin, which makes Litecoin free from attacks and maintains normal development.
- Block processing speed
Litecoin is 2.5 minutes and Bitcoin is 10 minutes. One of the disadvantages of Bitcoin is that the confirmation of the transaction is relatively slow. It takes 10 minutes to package the block, and after packaging, it needs to be verified by the nodes of the whole network. The verification time is longer. The two times add up to about 40 to 50 minutes in total. The block packaging speed of Litecoin is four times that of Bitcoin, plus the transaction confirmation time, it can be completed within about 20 minutes in total.
- Total cap
The upper limit of the total amount of Litecoin is 84 million, the upper limit of the total amount of Bitcoin is 21 million, and the upper limit of the total amount of Litecoin is four times that of Bitcoin.
In May 2013, the computing power of Bitcoin was 8 times that of the top 500 supercomputers in the world, reaching 158 THash/s. However, due to the performance limitation of cPu mining in Litecoin, the computing power of the entire network is only 15 GHas/s. Litecoin processes a block every 2.5 minutes, and Bitcoin takes 10 minutes. The progress of launching a double payment attack on the blockchain obeys the Poisson distribution, and the probability of a successful attack decreases exponentially with the increase in the number of blocks. When the number of blocks is greater than 6, the probability of a successful attack will drop to a negligible level, which is exactly the basis for Bitcoin to recommend 6 confirmation numbers to ensure transaction security. When the block processing speed increases to 4 times that of Bitcoin, the success probability of an attacker creating a fake node also increases sharply. By calculating the probability density of the Poisson distribution, the number of node confirmations required to avoid double payment attacks will also increase It has risen to 4 times that of Bitcoin, that is, Litecoin needs 24 node confirmations to achieve the security of Bitcoin’s 6 node confirmations.
What kind of mining machine is used to mine Litecoin?
The following is the sorted model computing power/power consumption
- Antminer L3++ (580M/1050W)
- Antminer L3+ (504M/875W)
- Innosilicon mining machine A4 (280M:1050W)
- Innosilicon mining machine A4+ (620M/750W)
- Innosilicon mining machine A6 (1230M/1500W)
- Antminer L5 (1473M/1425W)
- Innosilicon mining machine A6+ (2200M/2100W
- Goldshell mining machine X5S (1100M /1260W
- Goldshell mining machine X6 (1620M/1600W)
- Fansi mining machine X6 (860M/1080W)
- Binet L21 (550M/950W)
- Avalon L7 series (9050-9.5G/3425W)