What is Litecoin?

Litecoin is one of the earliest Bitcoin forks, created by former Google engineer Charlie Lee in October 2011 with the explicit goal of being a faster, lighter complement to Bitcoin for everyday transactions. It uses the Scrypt proof-of-work algorithm instead of Bitcoin's SHA-256, generates blocks every 2.5 minutes (versus Bitcoin's 10), and has a maximum supply of 84 million LTC — four times Bitcoin's 21 million cap. Litecoin was also the first major chain to activate Segregated Witness (SegWit) and test Lightning Network in production before Bitcoin.

Litecoin's Scrypt algorithm was originally designed to be memory-hard, intended to resist ASIC mining and keep mining accessible to consumer hardware. In practice, Scrypt ASICs were developed within a few years, and Litecoin mining is now also dominated by specialized hardware — though a separate subset of ASICs from Bitcoin's, meaning the two networks do not directly compete for the same mining infrastructure. Litecoin supports merge mining with Dogecoin, meaning the same proof-of-work can simultaneously secure both chains. In 2022, Litecoin activated MimbleWimble Extension Blocks (MWEB), adding an optional privacy layer where transaction amounts and addresses can be obscured — making Litecoin the largest proof-of-work chain with a native privacy option.

The durable criticism of Litecoin is the erosion of its original value proposition. Its faster blocks and lower fees were a meaningful advantage when Bitcoin mainnet was the main alternative for payments; the rise of Bitcoin's Lightning Network, Ethereum L2s, and dedicated payment chains (USDC/USDT transfers) offers comparable or better speed with broader liquidity. Litecoin has not introduced significant protocol innovations beyond MWEB in recent years, and developer activity on the Litecoin Core codebase is modest relative to competing chains. Charlie Lee publicly sold the majority of his LTC holdings in December 2017, which remains a recurring criticism regarding founder commitment.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.