Litecoin: Satisfying Codebase with Room for Improvements

Introduction

The Institute for Crypto Asset Analysis (ICAA) analyzes the underlying code of cryptocurrencies and other DLT solutions. Automated algorithms determine a score about the quality of the code, which is easy to understand and comparable. In the case of Litecoin we analyzed over 600,000 lines of code and identified issues in less than 20,000 lines of code. In most cases the issues were minor and not critical but there are also sections of the code, which require improvements by developers. ICAA aims to provide an innovative approach of reviewing the code of cryptocurrencies and to help investors, analysts and other blockchain enthusiasts in the decision-making process. Prior to the details of the analysis of Litecoin, let us take a look at the blockchain technology itself. For everyone who is familiar with the concept of Litecoin, feel free to skip this section and continue reading in the next section.

The technology behind Litecoin

The cryptocurrency Litecoin was first introduced in the year 2011 by the former Google employee Charlie Lee. The Litecoin is based on the open source protocol of the Bitcoin, with several changes in the technology. By searching the Litecoin website, one can find the following definition: “Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.”[1] As already known from the Bitcoin every transaction in the Litecoin network is stored on a public ledger (Blockchain) and has to be verified by a decentralized network of computers (nodes). Further, miners are rewarded by new Litecoins for verifying the transactions, until the maximum of 84 million released coins is reached. So far so good, but what makes the Litecoin different from its precursor Bitcoin?

Review of the Litecoin codebase

Litecoin is equipped with peer-to-peer payment features, which are defined in the codebase of Litecoin. The Litecoin software is based on the Bitcoin protocol and is distributed across the network. The software functions as a backbone of the cryptocurrency project, which depends on the quality and security of the codebase. Analyzing the codebase of Litecoin helps to unveil code issues and to ensure the long-term success of the technology. In our innovative approach, the software automatically analyzed the C++ codebase of Litecoin and determined the quality of the code. Since the Litecoin code is published under the permissive free MIT/X11 software license, the codebase is easy accessible on GitHub[2].

Figure 1: Rating scale for the quality of crypto code [-5, +5]

Analysis: Litecoin has a solid 2.54 score on a [-5,+5] scale

At this point, it is interesting to know, which score was reached by the Litecoin code. The cryptocurrency scores solid 2.54 with potential for further improvements. In order to classify this result, the second largest cryptocurrency, Ethereum, scores only 1.69 and is ranked clearly behind the Litecoin. In the following, we will examine the reasons behind this result and break down the score into four categories: design, metrics, duplications and code issues. Every category is represented by an individual score, which allows to narrow down the issues to the components of the codebase or even the exact lines of code. Figure 2 visualizes all of the subcategories of the Litecoin version from 2018–02–21. In the following, each category is explained in detail and the results will be interpreted. As always, this part might be a little bit more technical but still plausible for non-coders.

Figure 2: Distribution of total score for Litecoin on a [-5,+5] scale
Figure 3: Example of anti-patterns in the “wallet” component of Litecoin
Figure 4: Example of code issues in the “miner.h” component of Litecoin

Summary: Overall the codebase of Litecoin is satisfying

The Institute for Crypto Asset Analysis analyzes the codebase of cryptocurrencies with automatic algorithms and translates the results into a score. In the case of Litecoin, we encountered an overall satisfying codebase with room for further improvements. Summarizing the results into hotspots according to the urgency of the issue, shows that 8 components of the code contain critical issues, 17 components are ranked as high and 33 components fall into the category of medium criticality. As Figure 5 shows, most of the hotspots can be located in the “wallet” and “qt” component. The majority of the issues can be traced to the category of code issues, which unveiled by far the worst score among all of the categories in Litecoin. Even though the code seems to function correctly, developers should review the critical sections of the code. The comparison of the Litecoin analysis with the previous code review of Ethereum resulted in better or similar results for the Litecoin codebase in all four categories. These findings can be confirmed with an overall better score for Litecoin.

Figure 5: Distribution of hotspots in the Litecoin code

Remarks

The results shown in this paper are based upon an automatic analysis of the code. Please note that this analysis does neither represent financial advice, nor is it supposed to be understood or interpreted as solicitation to buy or sell any securities, coins or tokens.

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Authors

Prof. Dr. Philipp Sandner has founded the Frankfurt School Blockchain Center (FSBC). From 2018 to 2021, he was ranked among the “top 30” economists by the Frankfurter Allgemeine Zeitung (FAZ), a major newspaper in Germany. He has been a member of the FinTech Council and the Digital Finance Forum of the Federal Ministry of Finance in Germany. He is also on the Board of Directors of FiveT Fintech Fund, 21e6 Capital and Blockchain Founders Group — companies active in venture capital financing for blockchain startups and crypto asset investment management. The expertise of Prof. Sandner includes crypto assets such as Bitcoin and Ethereum, decentralized finance (DeFi), the digital euro, tokenization of assets, and digital identity. You can contact him via mail (m@philippsandner.de) via LinkedIn or follow him on Twitter (@philippsandner).

Endnotes

[1] Litecoin Project: https://litecoin.org

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Philipp Sandner

Philipp Sandner

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Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center