Litecoin vs Bitcoin – 10 Different Facts You Didn’t Know
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First of all, what is a Litecoin and Bitcoin? they are cryptocurrencies (digital currency). Bitcoin is the first original cryptocurrency, whereas Litecoin was created by a hard fork, (essentially a copy of Bitcoin) in 2013 by Charles Lee. As they are essentially copies, both coins are similar, but what’s the main differences between the two? Here are 10 facts that you did not know.
1. Average Transaction Time
The first fact is that Bitcoin takes an average of 10 minutes for transaction (at time of writing), while on the other hand the Litecoin takes an average of 2.5 minutes for transaction (at time of writing). As you can see, at the moment Litecoin can make faster transactions than Bitcoin.
So what is the technology behind Bitcoin and Litecoin? The unique technology of both is the blockchain, a massive digital ledger of trades. This ledger can collect and store throughout a whole network of thousands of computers called nodes.
The purpose of this is to allow users to send money to each other all over the world without having to use banks and be concerned about the huge fees and exchange rates. In addition to this, the process of mining begins this is where the transactions are joined together to groups called blocks before being added to the blockchain.
The nodes that validate blocks will get rewarded with a new currency, so on the Bitcoin’s blockchain the reward will be 12.5 (BTC). The mining process is similar when you dig for gold. However, Bitcoin mining has become slow, expensive, and uses tons of electricity. Step in Litecoin.
Bitcoin mining works using a SHA-256 algorithm, so Charlie Lee wanted to change it to new rules that he developed called scrypt. When mining with scrypt it is four times faster than SHA-256 and it uses a lot less electricity. Also, for Litecoin, each new block of transactions will only take 2.5 minutes to be added to the Litecoin blockchain and you are then rewarded with 25 new Litecoin with each block validated. With this being said, fans of Bitcoin prefer SHA-256 as they say it is safer than scrypt.
On the other hand, Litecoin fans favour the new rules Charlie Lee developed making Litecoin transactions faster and cheaper than Bitcoin.
Some say, investing in Bitcoin is risky and expensive; the same would apply for any cryptocurrencies including Litecoin. If you think the first mover always wins then Bitcoin might be better, however if you think the improvements of Litecoin that could make that a better proposition. What thing for sure if that crypto currencies can be somewhat of a gamble. Since, no one knows which coins may gain in value and which ones will be valueless.
Cryptocurrency still needs infrastructure and adoption, meaning you can’t just go to the local shop and pay with Bitcoin or Litecoin. However, some companies do accept them as a form of payment, these companies are growing in numbers as we speak. However, Litecoin could become more acceptable as a form of payment than Bitcoin. This due to the fact that Bitcoin has a long transaction, while Litecoin is 4 times faster than Bitcoin in transaction and also the transaction cost.
So how much are 1 Bitcoin and Litecoin worth now? Right now (03/09/2018), 1 Bitcoin is worth $10,043 (AUD) while 1 Litecoin is worth $89.96 (AUD). So from a pure price perspective 1 Bitcoin equals 111 Litecoins. Obviously this will fluctuate so you can see the latest prices here. At time of writing, Bitcoin market cap is $10,467,596,650.78 where as litecoin is $540,274,528.26.
Litecoin has more usability that is why it is more popular than other alternative coins and opposing with Bitcoin for the market share. People often use it for basic blockchain-related processes, like lifting a smart contract.
7. Pros of Litecoin vs Bitcoin
- Litecoin is faster than Bitcoin in comparison in completing transactions, as it only takes Litecoin 2.5 minutes while Bitcoin takes 10 minutes to complete.
- Litecoin is an extended version of Bitcoin, and Litecoin is an open source project meaning it has flexibility and potential to apply improvements like Segwit and Lighting network a lot quicker.
- It has virtually zero transaction fee compared to Bitcoin, so it is a cheaper choice for people wanting to perform transactions.
- Litecoin uses new Proof of work algorithm meaning the process of mining can be simpler than in Bitcoin.
8. Pros of Bitcoin vs Litecoin
- Bitcoin is the very first cryptocurrency and the most censorship resistant.
- With Bitcoin, users can control all their transactions personally and store private keys offline and encoded to guarantee safety of your money.
9. Supply in Circulation
Litecoin has proof of work algorithm which will allow the maximum supply limit to be 84 million (LTC) to be made. This is precisely four times the maximum supply limit for Bitcoin which is 21 million (BTC).
The creation of Bitcoin was on January 3rd 2009 and by Satoshi Nakamoto. On the other hand, Litecoin was created on November 7th 2011 by Charlie Lee.
In conclusion, both coins have many differences to each other. Although, they do have some similarities to each other as Litecoin is the fork of Bitcoin. If you’re not convinced about Litecoin as an alternative to Bitcoin then there are others compared in The Top 5 Best Bitcoin Alternatives for 2018 guide.