Litecoin (LTC): An alternative to Bitcoin (BTC)

A few months ago I found myself enchanted with the idea of bitcoin; which as you probably already know, is a digital currency. The interesting part about it is that there is actually a market for bitcoin where real cash can be exchange for the virtual currency and back. Basically what happened is that the popularity of bitcoin exploded, sending the price up to almost 30$/BTC. Early adopters who held their coins suddenly had fortunes worth $100k+!

My biggest criticism of bitcoin was always that it was pretty wasteful. Essentially throwing away GPU and electricity in order to enforce the security of the bitcoin system. The waste was in some sense required as the system functioned by assuming that the majority of the computing power of the network would never be under control of a single entity or group capable of exploiting the system (basically the larger it became the more secure it became).

Ultimately the market brought bitcoin into balance. The number of people with powerful GPU cards increased the hashing rate of the network, produced enough bitcoins to satisfy demand which along with waning interest brought the price of the currency down about 10 fold to $3 or so currently. I’m a big proponent of digital currencies, but I would really like to see a little less waste in terms of computing resources. That is where litecoin comes in.

Litecoin is basically a fork of bitcoin which uses a modified hashing algorithm that benefits more from CPU than GPU computing power. In a sense, this makes litecoin more easily accessible, and generally less wasteful as CPU can consume substantially less power. While I think that crypto-currencies are generally pretty wasteful, I think Litecoin is a step in the right direction. You know I take that back, as wasteful seems to be a loaded word here — perhaps a better term is “resource intensive”.

I would love to eventually see some sort of currency which allows useful work to be done in addition to managing a distributed currency. This would give the currency some sort of intrinsic value aside from maintaining its own integrity.

Anyway, if you are like me and feel like you can’t adequately contribute to bitcoin because of the size of the network, you should head over to Litecoin’s website and give them a try. You can even run bitcoin alongside litecoin since it runs completely independently of your GPU.