Whitepaper

Litecoin never published a formal academic whitepaper like Bitcoin. Instead, creator Charlie Lee (forum name coblee) announced the project on Bitcointalk on . That launch post is the closest thing Litecoin has to an original whitepaper.

Below is an edited presentation of that announcement - cleaned for readability, with outdated or broken links removed. You can still read the original thread here: [ANN] Litecoin - a lite version of Bitcoin. Launched!.

Launch

Litecoin went live on (03:00 GMT. Source code and downloads remain available from:

Why Litecoin

Litecoin came from people who met on IRC and wanted a real alternative currency similar to Bitcoin - often compared to silver, with Bitcoin as gold. Various alternative currencies had come and gone. Some brought innovation, but they all had problems.

  • ixcoin - Nasakioto premined 580k coins. Seemed like a pump and dump. Competed with Bitcoin for GPU resources - Dead (~2 gh/s)
  • i0coin - Basically ixcoin without the premine. Not much support after release - Dead (~5 gh/s)
  • SolidCoin - Innovative quick transaction times. Appeared to have been run aground by CoinHunter, its creator, due to insecure changes and an immature forum presence - Dead, shut down by CoinHunter
  • GeistGeld - Lolcust premined 7.7 million coins. 15-second block time is probably a bit extreme - Alive, but limping (~15 gh/s)
  • Tenebrix - Lolcust premined 7.7 million coins. CPU proof of work using Scrypt is very innovative. Price doing fairly well on btc-e.com - Alive (~0.003 gh/s)
  • Fairbrix - Basically Tenebrix without the premine. First launch was crippled due to bad config. Relaunch attacked initially - Doing OK, but no exchange so far - Alive, but limping (~0.0001 gh/s)

The goal was to take the best innovations of Bitcoin and these other currencies and build a coin with their benefits, but nearly none of their problems.

Proof of work

The team really liked Tenebrix’s Scrypt proof of work. Using Scrypt allows one to mine Litecoin while also mining Bitcoin. A big thanks went to ArtForz for the implementation.

Premines

Litecoin came with 150 premined coins: just the genesis block and the first 2 blocks to confirm the genesis is valid. The belief was that a coin needs to be released in a fair manner. Having one person (or a group) control a large amount of coins that can be used as they see fit is against the decentralized vision of Bitcoin.

Without a stash of premined coins, the founders would not be able to afford to pay for bounties - but they believed people would see the virtue of the coin, invest as early adopters, and spend time creating services to make it better.

Fast transactions

SolidCoin’s fast transactions were impressive. Although fast confirmations are not necessarily as secure as Bitcoin’s slower confirmations, they are very convenient for small merchants who do not need transactions to be super secure.

The average Litecoin block takes 2.5 minutes - one quarter of Bitcoin’s 10 minutes. Merchants who want to be as safe as Bitcoin can wait for 4 times the number of Litecoin confirmations compared with Bitcoin. Most merchants can readily accept 1-confirmed transactions for small amounts of litecoins.

Difficulty retarget

Litecoin kept the retarget block the same as Bitcoin’s 2016, but because blocks are found 4 times faster, difficulty retargets about every 3.5 days. The combination of fast retarget times and Scrypt proof of work (Litecoin would not compete with Bitcoin for miners) was meant to avoid the sort of problem Namecoin encountered: hashing power that leaves more suddenly than it came, causing a high-difficulty slog for everyone who stayed.

Coin generation

Miners generate 50 coins per block. With faster blocks, the halving schedule had to change to properly mimic Bitcoin’s generation trajectory. Bitcoin generation is halved every 210,000 blocks. Litecoin generation is halved every 840,000 blocks.

For those doing the math, Litecoin is scheduled to produce roughly 4 times as many coins as Bitcoin - about 84 million litecoins.

Fairness

Some previous coins were released without Windows binaries or without source code - unfair and unsafe. Litecoin released the source code and binaries ahead of time: 3 days before launch. People had time to compile the source and run the client against the Litecoin testnet, and to make sure everything was working before launch.

There was also a poll so people could vote for a launch time that best suited them. At launch, the genesis hash was released and everyone started mining at the same time. All it took was a simple change in the config file to mine the real coin instead of the testnet coin.

51% attack

The problem with alternative currencies is that network hashrate is likely low when a coin starts up, making an easy target for any potential 51% attacker. With a little hope, a little prayer, a lot of hype, and due to the release approach, there was a large hashrate from minute one. That was believed to deter attackers from targeting the chain.

As expected, there was a lot of natural orphaning of blocks because so many people were mining at once. With block locking at every difficulty change, attacks were avoided from succeeding - if there were any.

Source code

The source is based on the latest Bitcoin code of that time: github.com/litecoin-project/litecoin. You can build the daemon (litecoind) or the GUI (Litecoin QT). See the build docs in the repository.

Similar to Bitcoin, you may want to create a litecoin.conf file here:

  • Windows: C:\Documents and Settings\<user>\Application Data\Litecoin
  • Win7: C:\Users\<user>\AppData\Roaming\Litecoin
  • Mac: ~/Library/Application Support/Litecoin
  • Unix: ~/.litecoin

P2P port is 9333. Open it on your router if you know how - this will allow you to have more than 8 connections. Default RPC port is 9332 - the port miners use to communicate with your client or daemon.

Sample litecoin.conf:

server=1
rpcuser=user
rpcpassword=password
#Change this if you want to use a different rpc port for mining
#rpcport=9332
#Only uncomment this if you are running litecoind and want to run
#Litecoin in the background (not Litecoin QT)
#daemon=1

How Litecoin differed from Fairbrix

In the same thread, Charlie Lee also answered how Litecoin differed from Fairbrix: Fairbrix, like Tenebrix, had no cap on the total number of coins, so it keeps inflating forever. Litecoin has a cap similar to Bitcoin. Fairbrix averaged 5 minutes per block with 25 coins generated per block. Litecoin is 2.5 minutes with 50 coins per block.

One of the goals was not to change what was working in Bitcoin unless there was a good reason. Litecoin was forked directly from the Bitcoin source code, so it would not have new security holes that did not also plague Bitcoin. One reason the first Fairbrix launch failed so badly is that it was a fork of Tenebrix, a fork of Multicoin, a fork of Bitcoin - and somewhere in those forks a nasty bug crept in.

Note on this page

This page is a historical presentation of Charlie Lee’s Bitcointalk announcement for the Litecoin Club site. Wording is lightly edited for clarity. Dead project sites and IRC links from 2011 were omitted. For the primary source, see the original Bitcointalk thread.