Why You Should Care About Litecoin

Litecoin ‘Halving,’ Set for Wednesday, Should Harden Supplies of ‘Digital Silver’ Litecoin founder Charlie Lee, a computer scientist trained at the prestigious Massachusetts Institute of Technology (MIT), created the network in 2011 by cloning Bitcoin’s code, which was the original blockchain, launched two years earlier by inventor Satoshi Nakamoto. ADVERTISEMENT ADVERTISEMENT A couple of years after Litecoin’s debut, two software engineers, Billy Markus and Jackson Palmer, created Dogecoin by allegedly cloning Luckycoin – itself a clone of Litecoin. But there were some deficiencies in Dogecoin’s issuance model – the mechanics of its money supply – partly because it strayed from Bitcoin’s original parameters. All three blockchains rely on a “proof-of-work” system that recruits “miners” to process transactions and secure the network in exchange for a form of compensation called a “block reward.” For Bitcoin and Litecoin, the reward is a combination of variable transaction fees and a predetermined “subsidy” that gets halved approximately every four years – a carefully chosen, marathon-like pace of issuance. (This is what happened Wednesday on Litecoin.) Dogecoin’s halving schedule (and subsequent rate of issuance) before 2015, in stark contrast to that of its progenitors, was akin to a 100-meter dash. Blocks were generating every minute and rewards were getting halved every 69 days, resulting in block subsidies that rapidly depleted the network’s fixed supply of 100 billion DOGE. “Because of that, the network security of Dogecoin went down really quickly,” Lee said.