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Is Litecoin Layer 1 (Explained)

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What does it mean to be a Layer 1 crypto? Is Litecoin a layer 1 crypto? Below, we take a look at answers to these questions and more. Read on to find out:

  • Other examples of Layer 1 cryptos
  • Benefits and drawbacks of Litecoin
  • How to invest in litecoin

Is Litecoin Layer 1?

Yes. Litecoin is a layer-1 cryptocurrency. 

Litecoin is an open-source cryptocurrency that runs on a peer-to-peer decentralized blockchain. Litecoin and its native token LTC, uses the Proof of Work consensus to mine blocks. 

What Is A Layer 1 Protocol?

A layer-1 protocol is a consensus mechanism that supports and facilitates operations on a base network. There are several layer-1 protocols including Proof of Work, Proof of Stake, and Secure Proof of Stake.

Layer-1 protocols use varying consensus strategies, have different speeds and network security mechanisms, but they all focus on solving the blockchain trilemma

What Are Other Examples Of Layer-1 Crypto?

There are many Layer-1 cryptocurrencies. 


Ethereum is layer-1 crypto that runs a Proof of Work (PoW) consensus mechanism. However, with the launch of Eth2 in the coming few months, it will change its mechanism to Proof of Stake (PoS).


Launched in 2018, Elrond also runs as a layer-1 crypto. Elrond uses Secure Proof of Stake, a consensus protocol that attains scalability through its adaptive state sharding. Its native token is EGLD, which the Elrond network uses to pay fees when deploying applications on its network. 


Algorand, much like Elrond, uses the Proof of Stake (PoS) consensus mechanism to validate blocks in its network. As a layer-1 crypto, you can develop dApps and services and still use its original token ALGO to support governance and finalize transactions. 


Cardano (ADA) is another layer-1 network with great decentralized applications on its network. Using the PoS consensus, Cardano focuses on taking the lead in the crypto space. 

Learn more: Is Solana A Layer 1 Or 2?

What Are Layer 1 Networks Used For?

Layer 1 networks are the foundations of every blockchain ecosystem. They validate and record on-chain transaction and achieve consensus through various mechanisms.

Excellent examples of a layer 1 network are Bitcoin, Ethereum, and BNB chain.

Layer 1 provides the base for developers to build decentralized applications, protocols, or other networks.

These so-called layer 2 applications allow users to quickly perform transactions without being forced to instantly record every single transaction on the ledger. Layer 2 applications aim to solve the scalability problem of the blockchain.

What Is Litecoin Used For?

The primary use of Litecoin is to provide cheap and speedy transactions in the crypto space.

Since its inception in 2011, its primary purpose has been to facilitate transactions and serve similar functions to Bitcoin. The founders of Litecoin wanted to offer a convenient store of value with extra features. 

How To Invest In Litecoin?

As a new investor, here’s how you can invest in Litecoin: 


Buying LTC is a clear-cut way to tap into the LTC economy. Today, there are several places you can buy LTC for your investment portfolio.

You can use PayPal to buy LTC directly on the Litecoin website, cryptocurrency ATMs, or at any standard crypto exchange like Coinbase or Binance.

Trade LTC online

You can make earnings from trading LTC online. Today, you can trade cryptocurrency against other cryptos or Fiat money. For example, you will trade LTC/BTC or LTC/ETH. It’s similar to trading currency pairs but for cryptos.  

Own crypto ATMs

Owning crypto ATMs is a recent revolutionary idea in the crypto space. You can install Crypto ATMs where users can buy LTC and other cryptos while you profit from the fees charged on those transactions. 

What Are The Pros And Cons Of Litecoin?

It’s a great move to invest in Litecoin. It’s in the top 50 cryptos by market capitalization and is part of cryptocurrencies with significant trading volumes. However, being at this level has its pros and cons. Let’s dive in.



Litecoin runs on a secure peer-to-peer blockchain network which presents an secure alternative to physical money. It eliminates the need for intermediaries like regulatory authorities or central banks. 

Also, participants run nodes are across the globe, which ensures the security of transactions and the network. 

Transaction Speeds

Compared to its predecessor, Bitcoin, and other coins in the market, Litecoin offers faster transactions speeds. It has a block confirmation time of 2.5 minutes which is four times faster than that of Bitcoin.  


At speeds of 56 transactions per second, Litecoin can scale its functionalities better than most coins. It proves that offering convenient transactions for users in the network between individuals and businesses. 

Clear Mining process

Litecoin employs the Proof of Work consensus mechanism similar to that of Bitcoin. However, the difference in the algorithmic pattern makes Litecoin’s Scrypt less resource-intensive than Bitcoin’s SHA-256. 

Learn more: Is Litecoin Easy To Mine?


To make an informed decision, you must beware of Litecoin’s downside too. Here are Litecoin’s cons.

Reduced Mining profits

Continuous halving and lack of demand for LTC continue to make it less profitable to mine. Today, participants mining LTC have to use more resources to produce a block of Litecoin. 

Almost Centralized

Nearly 40% of the Litecoin chain is under the control of the leading 100 addresses. This kind of control makes LTC a risky investment for new investors because upon exit of such users could lead to a massive blow to the stability of the blockchain. 


Proof of Work (PoW) has come under heat for using lots of energy to produce blocks and coins in respective blockchains. Litecoin is a cryptocurrency that uses PoW.  

PoW has a dim future, given that it can’t reduce energy use. This factor hinders other investors within the network who have a bias towards environmental harm.

Learn more: Is Litecoin Eco Friendly?

What Is The Best Alternative To Litecoin?


  • Ticker: ETH
  • Blockchain Network: Ethereum
  • Consensus mechanism: Proof of Work
  • Use Cases: dApps, Smart contracts
  • Source Code: Open
  • Hash function: Keccak-256 algorithm


  • Ticker: BTC
  • Blockchain Network: Bitcoin (Peer-to-peer)
  • Consensus mechanism: Proof of Work
  • Use Cases: Store of Value, Alternative to fiat money.
  • Source Code: Open
  • Hash function: SHA-256 algorithm


  • Ticker: DOGE
  • Blockchain Network: Dogecoin blockchain
  • Consensus Mechanism: Proof of Work
  • Use cases: Meme coin
  • Source Code: Open
  • Hash function: Scrypt-based

Final Thoughts

Litecoin is a layer 1 crypto, just like Ethereum, Bitcoin and Cardano. It’s ideal for transactions because of its speeds.