What is Litecoin?
Summary
Litecoin is a network for transferring LTC. It builds on Bitcoin’s code but has its own blockchain. Its protocol targets a block every 2.5 minutes, compared with Bitcoin’s 10-minute target. That does not guarantee when any particular payment will be final.
- Litecoin is a separate network focused on LTC transfers.
- LTC pays transaction fees; new blocks are targeted more frequently than on Bitcoin.
- Virtune Litecoin ETP gives physically backed LTC exposure through a security listed on Nasdaq Stockholm.
Litecoin and LTC transfers
Litecoin is a separate network for sending the crypto-asset LTC. Bitcoin is the natural comparison because Litecoin began from its code and retains a transfer-focused design. It grew out of Bitcoin's code, but a Litecoin payment goes onto Litecoin's own ledger, not Bitcoin's. Litecoin's protocol targets a block every 2.5 minutes1, compared with Bitcoin's 10-minute target2. That creates more frequent opportunities for a payment to be included in a block; it does not promise when a particular recipient will regard the payment as final.
Litecoin's focus is relatively narrow: transferring LTC. Ethereum, by comparison, is designed to run applications using smart contracts.
What happens when LTC is sent?
A wallet signs a transfer, network nodes check it against the rules, and miners assemble valid transfers into blocks3. The recipient can then see the transfer on Litecoin's ledger. Owning LTC directly also means choosing a wallet or custodian for access to it.
LTC is both what is sent and what pays the network transaction fee3. Mining introduces new LTC as block rewards under the network's rules. Litecoin's stated maximum supply is 84 million LTC4. These features explain the network's design; they do not set a fair market price.
Why is Litecoin called “digital silver”?
The phrase compares Litecoin with Bitcoin's familiar “digital gold” nickname. It points to their shared lineage and Litecoin's shorter block interval, not to a fixed relationship between LTC and BTC prices or to a claim about investment quality. Both networks use mining, but they have separate ledgers and assets.
LTC directly or through an ETP
Virtune Litecoin ETP follows the price of LTC in an exchange-traded security. It is physically backed with LTC held as collateral5, so the investor gets LTC exposure without managing a crypto wallet. The holder owns the security and cannot send it on Litecoin's network. The ETP is listed on Nasdaq Stockholm; access through a broker depends on that broker's available markets. The crypto ETP buying guide explains the purchase route.
Costs when buying Virtune Litecoin ETP
| Cost | Charged by | When |
|---|---|---|
| Brokerage commission | Broker | On every purchase and sale |
| Difference between bid and ask price | Market | On every trade |
| Management fee, 1.95% per year | Issuer | Ongoing, from the product's value |
| Currency conversion | Broker, if applicable | If the product trades in another currency |
Risks to understand
LTC's price can change sharply, and the ETP's physical backing does not prevent a price fall. Direct ownership requires secure access to LTC. The ETP introduces issuer, collateral custody and exchange-trading risks, including the possibility of a difference between its market price and the value of its holdings. Crypto-assets can lose substantial value6, as European authorities warn.
Related product
Sources
- Litecoin Core developers: Litecoin Core mainnet consensus parameters
- Bitcoin Core developers: Bitcoin Core mainnet consensus parameters
- Litecoin Foundation: Bitcoin vs Litecoin: What are the differences
- Litecoin Foundation: What is Litecoin?
- Virtune Investor Relations: Collateralization Methodology
- EBA, EIOPA and ESMA (the European Supervisory Authorities): EU financial regulators warn consumers on the risks of crypto-assets
