In recent years, there have been tremendous fluctuations in the public interest in cryptocurrencies. Bitcoin, the famous moniker of cryptocurrency in a lengthy period, was the major center of this interest—not surprising as it was the first digital money. However, the interest of investors in cryptos grew with the arrival of the 2020s. For the most accurate information, read more.
But hundreds of more cryptocurrencies have entered the market since the establishment of Bitcoin in 2009. While digital coins have become increasingly difficult to distinguish themselves by the crowded sector, Litecoin (LTC) is non-Bitcoin cryptography that has managed to compete. The sixth digital currency by market cap is now the LTC trails behind Bitcoin.
Similarities between the Two
Fiat currency such as the US dollar or the Japanese yen relies on value, circulation, and legitimacy from central banks. Cryptocurrencies are not subject to centralization: they rely solely on the encryption of the network itself.
Former Google developer Charlie Lee invented Litecoin in 2011. He revealed that he had debuted the “lite version of Bitcoin” via an e-mail on a prominent Bitcoin forum. Litecoin has been regarded as formed in response to Bitcoin since its foundation. Indeed, the own developers of Litecoin have long declared their desire to make “silver” for “gold” in Bitcoin.
This is why Litecoin adopted many of the elements of Bitcoin, which Lee and other developers felt worked well for the early cryptocurrency, and modifies some other parts which the development team could improve.
One significant similarity is that they are both evidence of working ecosystems between Bitcoin and Litecoin. This means that the mechanism underpinning the mining of both cryptocurrencies – authenticated, generated, and then published to the public ledger or blockchain – is comparable.
Transactions and Storage
These two cryptocurrencies can be purchased or mined via an exchange plant. They both require a digital or cold wallet.
Moreover, the price of both cryptocurrencies has proven to be dramatically volatile over time, based on factors that vary from investor to government regulation.
Differences between the Two:
The differences between the two cryptocurrencies are:
Capitalization of Market
As of March 2021, all circulating Bitcoins are worth over $1 trillion, making it is market capital more than 70 times that of Litecoin, which is worth $13.7 billion in total. It depends heavily on a historical perspective whether you find Bitcoin’s Market Cap as high or low. Considering that the market capitalization of Bitcoin in July 2010 was barely $42,000, its current level appears to be astonishing.
As a network, Bitcoin is still dwarfing any other digital currency. Its nearest competition is Ethereum, a market worth around $212 billion in the second-largest cryptocurrency. Therefore, Bitcoin has a far higher value than Litecoin is no wonder, as Bitcoin is now so much larger than any other digital currencies.
The total number of coins each cryptocurrency may manufacture is another significant distinction between Bitcoin and Litecoin. It is here that Litecoin stands out. This sounds in principle like a substantial advantage for Litecoin, but its actual world impacts can be insignificant. This is because Bitcoin and Litecoin are split into almost microscopic quantities.
Therefore, it is not difficult to buy goods or services that the users of either currency should, no matter how high the single Bitcoin or Litecoin’s general cost may become. Richard Brown, CEO of IBM, expressed in November 2013 the likelihood that some users would prefer to operate in complete units rather than infractions of one unit. Yet, even if this is true, the problem may be rectified by simply changing software in digital wallets that carry out Bitcoin transactions.
The prominent Bitcoin wallets as Coinbase and Trezor already allow displaying the Bitcoin value in official (or fiat) currencies such as American dollars, as Tristan Winters says in an essay published in Bitcoin’s magazine, The Decimals Psychology. The psychological resistance to working with fractions can be prevented.
Speed of Transaction
While technical transactions take place immediately on both Bitcoin and Litecoin, time is required to be confirmed by other network participants for those transactions. Litecoin was developed focusing on speed, which is an advantage because it has been increasingly popular.
According to data from Blockchain.com (the time it takes for a block to be checked and added to the blockchain), the average confirmation period of transaction for the Bitcoin network is only nine minutes per transaction, but this can vary greatly when traffic is high. The equivalent is approximately 2.5 minutes for Litecoin.
This difference in the confirmation time might, in principle, make Litecoin more commercially attractive. On the other hand, traders can always choose to accept transactions without any confirmation. Some debate has been held about the security of such zero-confirmation transactions.
Some currency network members, called miners, allocate their computational resources to ensure other users’ transactions. The distinct cryptographic methods they deploy are by far the primary technical difference between Bitcoin and Litecoin. The historical SHA-256 is used by Bitcoin, while the Litecoin algorithm called Scrypt is very recent. Its impact on the process of mining new coins is the most practical relevance of these various algorithms.
The SHA-256 is typically seen as more complicated than the Scrypt algorithm, allowing more parallel processing at the same time. Consequently, in recent years, Bitcoin miners have used more and more advanced Bitcoin mining methods as effectively as feasible. Appliance-specific integrated circuits are the most systematic approach for Bitcoin mining (ASICs). Unlike the simple CPUs and GPUs that came before them, they are hardware systems tailored for Bitcoins mining. The practical result is that Bitcoin mining is more and more remote from the reach of daily users unless this person joins a mining pool.
In contrast, Scrypt was meant to be less vulnerable to specialized hardware solutions in ASIC. This has caused many observers to see Scrypt-based cryptocurrencies, like Litecoin, as more accessible to consumers who want to engage as miners in the network. While some firms are launching Scrypt ASICs, Litecoin is aware of its vision of easier-to-reach mining since many Litecoin mining services continue to be carried out via mining CPUs or GPUs.