Bitcoin and Litecoin are two of the most well-known and widely used digital currencies. Bitcoin was first introduced in 2008, and Litecoin was introduced three years later. Litecoin is based on the same source code as Bitcoin, although it has no blockchain history in common.
What is Bitcoin?
Bitcoin was created in 2009 by an unknown person using the moniker Satoshi Nakamoto as an alternative currency that employed blockchain technology to ostensibly boost the security of financial transactions throughout the network.
By allowing Bitcoin miners to mine and add coins to the public blockchain network, Bitcoin effectively invented the cryptocurrency sector. So, while Bitcoin is fundamentally a currency, it also functions as a stock making it a bit of a hybrid.
Though Bitcoin is not legally recognized as money in many countries, its popularity has led to thousands of alternatives called altcoins. The current value of 1 BTC to INR is Rs 66,122.
What is Litecoin?
In 2011, Charlie Lee, a former Google programmer, developed a cryptocurrency called Litecoin (LTC). It was one among the earliest “alternative coins” to bitcoin.
Decentralized and peer-to-peer, like many other cryptocurrencies, Litecoin was spawned by a fork of the Bitcoin blockchain, the transparent, digital public database that most cryptocurrencies rely on.
LTC is based on an open-source blockchain that is not managed by a central body, similar to Bitcoin. Each Litecoin node operator keeps a copy of each blockchain to guarantee that new transactions do not conflict with previous ones, and miners assist in the processing of new transactions by adding them in newly mined blocks. The purpose of Litecoin is to simplify transactions and to make everyday life more efficient. The current value of 1 LTC to INR is Rs 8381.17.
Key Differences
So, both Litecoin and Bitcoin are cryptocurrencies that rely on crypto networks and have a similar basic structure, but what are key differences between bitcoin and litecoin?
- Market Capitalization
As of late 2018, Bitcoin’s market cap was approximately $109 billion, while Litecoin’s was just shy of $3.05 billion. Even still, Bitcoin’s meteoric rise can be seen in its market capitalization alone: in 2010, Bitcoin’s market capitalization was only $42,000. While this number has fluctuated over time, rival currencies such as Litecoin are gaining ground on the crypto-giant.
In terms of market capitalization, Bitcoin dominates the crypto-verse, and so has a far larger market capitalization than Litecoin. As of October 25, 2021, the total value of bitcoins in circulation was about $1.1 trillion, while Litecoin’s market cap was about $13.42 billion.
- Distribution
The maximum supply of BTC is limited to 21 million coins, while the maximum supply of LTC is limited to 84 million coins. Litecoin’s maximum coin supply is four times greater than Bitcoin’s, just as the Litecoin network executes crypto transactions four times faster. To distinguish between the currencies, the Litecoin designer constantly utilized a multiple of four.
With more coins issued, Litecoin may have more liquidity than Bitcoin, but Bitcoin’s scarcity may make it more valuable. Bitcoin and Litecoin prices are famously unpredictable, but Bitcoin’s price has consistently been orders of magnitude greater than Litecoin’s price.
- Transaction Speed
Another key difference between bitcoin and litecoin is transaction speed. Both Bitcoin and Litecoin transactions take a long time to be confirmed by blockchain network members. According to recent estimates from Blockchain.info, Bitcoin transactions are validated every 10 to 11 minutes on average, changing during high-volume periods. As a result, one block is mined every 10 minutes or such.
Litecoin transaction processing, on the other hand, is much faster than Bitcoin’s, with a transaction confirmation occurring every 2.5 minutes on average.
The following are the ramifications of this:
- As a result of its faster block generation, Litecoin can handle a larger volume of transactions. Bitcoin would need to undergo considerable changes if it was to match this.
- As a result of the higher block volume, the litecoin blockchain will have more orphaned blocks than bitcoin.
Because litecoin’s block time is faster than that of Bitcoin’s, double spending attacks are less likely to occur when both networks have the same hashing power. With bitcoin, a retailer would have to wait 10 minutes for only one confirmation, whereas with a minimum of two confirmations with bitcoin, they might have to wait five minutes.
Because of this significant speed differential, Litecoin has become a popular choice for businesses that employ cryptocurrencies because it allows them to complete transactions faster.
- Algorithm
Bitcoin employs the SHA-256 algorithm, whereas Litecoin employs the Scrypt method. The speed with which these two algorithms are able to mine respective coins is what determines the key differences between bitcoin and litecoin.
The Litecoin algorithm is designed to produce four times as many coins as Bitcoin’s process, with one coin being produced every 2.5 minutes (whereas Bitcoin produces one every 10 minutes). As a result, the key distinction is acquisition speed.
Both Litecoin and Bitcoin, use algorithms that use computing power to process transactions, with “miners” validating transactions in their networks with their computing power in exchange for coins.
However, the pace at which these transactions take place differs significantly between the Litecoin and Bitcoin algorithms.
Which is right for you?
Due to Bitcoin’s well-known reputation as a cryptocurrency, buying some Bitcoin is a typical starting point for new crypto investors. Bitcoin may be purchased on almost any cryptocurrency exchange or through a brokerage that accepts cryptocurrency purchases.
Investors that buy Litecoin may do so because of the currency’s potential utility in everyday transactions. Litecoin, like Bitcoin, may be purchased on a variety of cryptocurrency exchanges.
You can acquire both Bitcoin and Litecoin, as each has its own set of benefits and downsides. Bitcoin, Litecoin, and other altcoins are among the currencies held by many cryptocurrency investors.
It’s critical to weigh the dangers and rewards of cryptocurrency ownership before investing in either Litecoin or Bitcoin. Because undoing a bitcoin transaction is often not possible, always follow online security best practices and double-check transaction information before making a purchase.
