Bitcoin vs Litecoin: On What Important Basis Are They Different?

Bitcoin vs Litecoin: On What Important Basis Are They Different?

Bitcoin (BTC) and Litecoin (LTC) are the two most skilled digital currencies with Bitcoin launching in 2009, and Litecoin in 2011. Litecoin is known as the “light version of Bitcoin” which was formulated by a former Google engineer, Charlie Lee. Over the years new digital currencies have come into the market and draw attention, these two cryptos continue to grow. They have a lot of things in common, but on the other hand, there are certain dissimilarities as well. So in this article, we will do a comparison on Bitcoin vs Litecoin. 

Bitcoin vs Litecoin: A Comparative Study

Over the years, even after the emergence of other coins, Bitcoin still holds the top position being the pioneer of cryptocurrency. In the meantime, Litecoin revolves around 14th in the market position and has been overtaken by the latest digital currencies that are controlling the market such as Binance coin and Dogecoin. These two cryptos have many things in common, but there are some factors that sets them apart. Let us discuss all those factors. 

Design And Aims

At the top level, both these cryptos are extremely similar. They are both decentralized digital currencies formulated to support peer to peer transactions. They are formulated to cater as a medium exchange and also the store of value while eliminating the requirement for a central party to serve as a guarantee. For example, the central bank.

In Bitcoin vs Litecoin, similarity in both the coins is portrayed in their respective appellations, with LTC termed as “silver” to the BTC’s “digital gold”. The open source network position of Litecoin is itself a proven way of commerce that is complementary to Bitcoin. In a gist, the reason for the emergence of Litecoin is to provide a pared down version of Bitcoin in respect to a faster transaction, ease of mining, and lower fee of the transaction. 

Algorithms

In Bitcoin vs Litecoin, both these digital currencies use the PoW (Proof of Work) consensus technique to add new blocks to the blockchain. However, the algorithm related to this mechanism is not the same as the technology of Litecoin is less complex and needs a lower hash rate. 

The algorithm of Bitcoin is known as SHA – 256, Litecoin’s algorithm is known as the Scrypt. SHA was mainly formulated by the United States National Security Agency in 2001. The mining process of Scrypt on the other hand is less complex but more memory intensive.  

Block Sizes

A Bitcoin block can generally be home to approximately 1500 transactions. Both Litecoin and Bitcoin have their original block size of 1MB. However, these can easily be replaced by using layer 2 or off chain solutions to increase scalability. Bitcoin cash which is another digital currency is a hard fork that updates its block size limit of the chain to 8MB first and then to 32MB.  

Transaction Per Second

The maximum capacity of Litecoin is 56 transactions per second, whereas the maximum capacity of Bitcoin is only 7 transactions per second. Even though it appears that the transactions take place instantly, it takes them time to completely validate that and add them to the blockchain. 

Litecoin was built in parts so that it can boost the speed of transactions by providing an average of two and a half minutes for the complete verification of the block and to get added to the blockchain network. 

Transaction Fee

Another aspect that Litecoin has tried to resolve is the fees of transactions. With Litecoin, users will have to pay on an average of $0.03 to $0.04. When we compare this with Bitcoin it is more expensive. In the case of Bitcoin, the transaction fee is somewhat near $7.60. In the case of Litecoin, the fees are lower as the network keeps aside LTC that do not derive from the transaction fee in order to offer rewards to the miners. 

Bitcoin price is revolving around $43,000 at the time of writing this, with a market cap of $720 billion. On the other hand, the Litecoin price is $189 per coin with a market capitalization of $12 billion. But according to Litecoin price prediction, by 2022 the value of Litecoin is estimated to be around $360. So Litecoin is the next big cryptocurrency. So clearly in terms of price, Bitcoin is gaining. 

Conclusion

Now you may be wondering what is the best cryptocurrency to invest in 2021? See there are many predictions of the value of Bitcoin and Litecoin from extremely bullish to highly conservative. In Bitcoin vs Litecoin comparison, both these digital currencies are likely to retain their positions as leaders in the crypto market. Even though there are some who believe that Ether is also good. So it is difficult to choose among Bitcoin vs Litecoin vs Ethereum comparisons. 


Frequently Asked Questions On Bitcoin vs Litecoin

1. Is Litecoin better than Bitcoin?

Litecoin can offer a greater number of coins compared to Bitcoin and its speed of transaction is also faster, but these parameters are highly psychological boons for the investor and don’t affect the price or usability of these digital currencies.

2. Is Litecoin still a good investment?

Consistently ranking in the top 14 digital currencies by market capitalization makes Litecoin relatively stable when compared with other altcoins that were built around the same time.

3. Which is faster: Bitcoin or Litecoin?

It is obvious from the above article that Litecoin has a time of 2.5 minutes, compared with the time of Bitcoin which is 10 minutes. In practical terms, this implies that transactions that involve LTC will be four times faster than those for BTC.

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