Last week we took a look at Ethereum and Dash, exploring how each cryptocurrency works. Today we’re going to take a look at part 2 of our beginner’s guide, examining the very different Litecoin and Ripple cryptocurrencies. We hope you enjoy!
Litecoin is also known as a ‘fork’ of Bitcoin. As explained, this means it initially inherited ‘common rules’ from Bitcoin, and added new features. Founded by Charlie Lee, a former Google employee and Engineer Director at Coinbase, Lee released Litecoin via Github on October 7, 2011.
Litecoin has gone on to reach the top 10 cryptocurrencies by marketcap, and has experienced unprecedented growth. Maximum supply is set at 84,000,000 LTC.
Governance and Consensus
Litecoin is completely open-source and isn’t managed by any central authority- developed by a group of global computer scientists and software engineers. As a result, governance decisions need to be agreed by all those participating in protocol development and consensus, much like Bitcoin.
Consensus is reached via proof of work, with miners contributing to network safety and transaction processing. Litecoin also uses a scrypt algorithm, which makes the cryptocurrency more complicated and expensive to mine than Bitcoin.
Litecoin differs from Bitcoin in a variety of ways. The network aims to processes blocks every 2.5 minutes, opposed to Bitcoin’s 10 minute window. As a result, 56 transactions per second is achievable, compared to 7 for BTC.
In May the first Lightning Network transaction was completed through the Litecoin network, transferring 0.00000001 LTC from Zürich to San Francisco in under one second.
All transactions on the network are currently public.
The Ripple protocol (RTXP), and its native cryptocurrency XRP, varies dramatically from all proof of work/stake blockchains. Released in 2012, and created by Jed McCaleb, Arthur Britto and David Schwartz, Ripple Labs, and the Ripple protocol offers near-instant digital money transfers with negligible fees.
Governance and Consensus
Much has been written about the governance of Ripple’s distributed ledger. Whilst the ledger was developed by the private US company Ripple, it now operates as a quasi-standalone network, with a list of trusted validators helping to maintain consensus.
Updates and developments of the network are submitted by the private company, and ledger versions agreed on by validators updating their software repositories.
The Ripple protocol and shared ledger use a form of Federated Byzantine Agreement to reach consensus on the network. As a result, transactions and alterations to the ledger can be confirmed in 3-5 seconds. The entire ledger is therefore constantly synced.
As the RTXP uses a form of FBA to reach consensus, XRP is used as the native digital asset to settle transaction fees and act as a bridge currency. Transaction costs are incredibly low and referred to as ‘drops. A standard transaction currently costs 0.00001 XRP (10 drops).
Unlike a proof of work-based blockchains, the Ripple ledger can achieve speeds of up to 1,500 transactions per second; marked improvement in efficiency over the likes of Litecoin. However, criticisms have been raised against the potential centralization of development and censorship concerns as a result of a private company developing the protocol.
All transactions on the network are currently public.Leave a comment