Charlie Lee came to Google last week to talk about how he designed the cryptocurrency, Litecoin. Charlie is an ex-Googler & ex-Director of Engineering at Coinbase. I took notes from his talk that you can find below:

What is Litecoin?

Open source fork of BTC

4 x number of coins (84 mn LTC)

¼ block confirmation time — 2.5 mins

Scrypt proof of work (Bitcoin uses SHA256 for hashing) — “Silver to Bitcoin’s Gold”

Launched October 13, 2011

Altcoin explosion

Alternative crypto to BTC

There’s even a website to create new crypto nowadays: build-a-co.in

Altcoins before Litecoin

Namecoin: First fork, launched in 2011, decentralized DNS of blockchain, same proof of work as BTC (SHA256D), have difficult time to force merge mining — need to piggyback on Bitcoin, Bitcoin hash have the same problem

First fork, launched in 2011, decentralized DNS of blockchain, same proof of work as BTC (SHA256D), have difficult time to force merge mining — need to piggyback on Bitcoin, Bitcoin hash have the same problem Ixcoin : Exact clone of Bitcoin, launched in 2011, 580k coins postmined, became popular because people wanted to be in altcoin

: Exact clone of Bitcoin, launched in 2011, 580k coins postmined, became popular because people wanted to be in altcoin I0coin : Fork of Ixcoin with 0 pre-mining, bad name, didn’t really take off because no one knew how to pronounce it

: Fork of Ixcoin with 0 pre-mining, bad name, didn’t really take off because no one knew how to pronounce it Solidcoin : Launched in 2011, fork of bitcoin, 30,080 coins postmined, 3 min blocks, fixed fees — attacked with spam transactions, shutdown and relaunched as Solidcoin 2

: Launched in 2011, fork of bitcoin, 30,080 coins postmined, 3 min blocks, fixed fees — attacked with spam transactions, shutdown and relaunched as Solidcoin 2 Geistgeld : Built on multicoin, 7.7 mn coins premined, 15 second blocks, high orphan rates, miners might waste electricity mining blocks that did not really get to the blockchain

: Built on multicoin, 7.7 mn coins premined, 15 second blocks, high orphan rates, miners might waste electricity mining blocks that did not really get to the blockchain Tenebrix : 7.7 mn coins premined, 5 mins blocks, 50 coins rewards indefinitely, first scrypt proof of work, difficult for GPUs to mine and have to use CPUs (GPU is more efficient than CPU) due to Scrypt

: 7.7 mn coins premined, 5 mins blocks, 50 coins rewards indefinitely, first scrypt proof of work, difficult for GPUs to mine and have to use CPUs (GPU is more efficient than CPU) due to Scrypt Fairbrix: Fork of tenebrix, created by Charlie Lee, no premine, plagued with various bug in multi coin

Why create Litecoin?

An excuse to learn BTC code

Create an altcoin better than the rest

Design of LTC

Scrypt proof of work: Don’t compete with Bitcoin miners (Namecoin), CPU mining is fun (Tenebrix) → LTC is newer only 6 months, so mining is still profitable compared to BTC

Don’t compete with Bitcoin miners (Namecoin), CPU mining is fun (Tenebrix) → LTC is newer only 6 months, so mining is still profitable compared to BTC 2.5 min blocktimes: Fast block makes coin easier to use (Solidcoin), too fast and it becomes inefficient (GeistGeld)

Fast block makes coin easier to use (Solidcoin), too fast and it becomes inefficient (GeistGeld) Fair launch, no premine (I0coin, Fairbrix)

(I0coin, Fairbrix) Fork of Bitcoin and KISS (Fairbrix, Soldicoin)

(Fairbrix, Soldicoin) Good name and marketing (all)

Source Code Design — Code Source: https://github.com/litecoin-project/litecoin

Addresses start with ‘L’ so that people don’t mix it up with Bitcoin

2.5 mins block, keep the same reward schedule

Find the hash of the block that’s harder and harder for Bitcoin, Litecoin blocks do not start with zero due to scrypt proof of work

Hardest work is to creating the genesis block and this code is not published by Satoshi so Charlie had to reverse engineer this → added a quote on Steve Jobs passing away ;)

Fair launch: Source / binary released a week before launch (a long time before then!), launch time selected by forum poll

Genesis block withheld — can only mine on testnet — make genesis block a secret (you can’t mine on top of it because there are two numbers that are params)

Switching to mainnet with a config change

Why is Litecoin successful?

Easy to remember name

Good marketing with “silver to bitcoin” tagline, which ended up being a self-fulfilling prophecy

Arbitrage coin with BTC

On practically every exchange

Reuse of old Bitcoin mining GPUs

When BTC moved to ASICS, because BTC miners wanted to reuse their CPUS

Fair launch → don’t pre-mine your coins!

Q&A