Calling itself the ‘silver to Bitcoin’s gold,’ Litecoin aims to complement Bitcoin, optimizing Bitcoin’s blockchain to best serve the high volume, low value peer-to-peer payment space. To make Litecoin a viable alternative to Bitcoin, Lee needed to make Litecoin faster, cheaper, and more accessible. To accomplish these goals, Lee reduced the targeted transaction confirmation time, increased maximum Litecoin (LTC) supply, reduced the consensus threshold from 95% to 75%, and implemented a different cryptographic algorithm at the heart of the protocol.
Beyond the aforementioned adjustments to block creation time and consensus threshold, the implementation of the Scrypt (pronounced ‘ess-crypt’) algorithm represented the only other significant change distinguishing Litecoin from its predecessor at the time of launch. Whereas Bitcoin’s proof-of-work consensus protocol is based on the well-known Secure Hashing Algorithm 2 (SHA-2) cryptographic hash function, Litecoin utilizes the memory-intensive yet computationally simpler Scrypt algorithm.
Litecoin was released via GitHub on October 7, 2011. Charlie Lee wanted to ensure a ‘fair launch’ that did not give him an advantage over community participants. After pre-mining only 150 Litecoin, Lee launched the source code one week before the genesis block was created and encouraged people to mine the testnet to help locate any last-minute bugs. By the time the genesis block was released, many miners had already set-up and optimized their hardware. Lee included the following message within the genesis block: “NY Times 05/Oct/2011 Steve Jobs, Apple’s Visionary, Dies at 56.”