Litecoin is a peer-to-peer cryptocurrency created by Charlie Lee. It was created based on the Bitcoin protocol but differs in terms of the hashing algorithm used. Litecoin uses the memory intensive Scrypt proof of work mining algorithm. Scrypt allows consumer-grade hardware such as GPU to mine those coins.
Litecoin was the first to alter Bitcoin and the most significant difference is that it takes 2.5 minutes for Litecoin to generate a block, or transaction, in comparison to Bitcoin’s 10 minutes.
As explained, Litecoin can transact a lot faster than Bitcoin. Litecoin can handle higher volumes of transactions because of the capability of transacting faster and if Bitcoin attempted to transact on the scale of its altcoin, a code update would be needed. However, Litecoin’s blocks would be larger, but with more ‘orphaned blocks’. The faster block time of litecoin reduces the risk of double spending attacks – this is theoretical in the case of both networks having the same hashing power.
Litecoin has inspired many other popular alternative currencies (eg. Dogecoin) because of its Scrypt hashing algorithm in order to prevent ASIC miners from mining those coins.