Bitcoin was launched in 2009, making it the oldest cryptocurrency in the world. This was soon followed by the launch of Litecoin a couple of years later.
Over the last decade, we have seen a number of other cryptocurrencies make their way to the helm and attract immense attention. However, despite this cryptocurrency proliferation, Bitcoin has held its own as the most popular crypto across the world, enjoying the leading spot in terms of market capital.
Litecoin, though, has struggled to keep up, and, as of June 2021, was ranked 14th. The veteran crypto has been unable to match up to several newer currencies like Binance Coin and Dogecoin. Having said that, Litecoin still remains a solid crypto investment, promising excellent ROIs to investors having the patience to play the long game.
In this blog, we will be performing a brief comparison of the two currencies, allowing our readers to understand the ways in which they are similar and different to each other. For more information, you can visit here https://www.thebitcoincode.io/
Comparing Bitcoin and Litecoin
1. Aims and Designs
At a high level, the two currencies are largely similar. For one, both happen to be decentralized cryptocurrencies that were created to be compatible with P2P (Peer-to-Peer) transactions. These currencies were designed to become stores of value and mediums of exchanges, thereby getting rid of a central guarantor.
While Bitcoin is considered to be the ‘digital gold,’ Litecoin was created as its silver counterpart. Moreover, the open-source network associated with Litecoin is positioned as a commerce medium that can complement Bitcoin. In other words, Litecoin came about as an ‘easier’ Bitcoin version, associated with reduced transaction costs, easier mining, and faster transactions.
Both currencies make use of the PoW (proof-of-work) consensus system for adding new blockchain blocks. However, there are considerable differences behind the algorithms running these systems – Litecoin has a far simpler algorithm, needing lower hash rates.
SHA-256 is the Bitcoin algorithm, while Litecoin’s is known as Scrypt. Originally, the SHA was developed back in 2001 by the USA’s Security Agency. Scrypt, along with its lower complexity, also comes with a mining process that is more memory-intensive. This means that both the digital currencies have fairly similar inner mechanisms and governing principles. Both Bitcoin and Litecoin need tremendous computing power in order to use the primary chain for mining blocks. This process is quite inefficient, though some experts feel that protocols like PoS (proof-of-stake) have considerably reduced these inefficiencies.
3. Block sizes
One block of Bitcoin generally houses approximately 1,500 transactions. Either cryptocurrency has a 1 MB limit for block sizes. However, one can use layer 2 or off-chain solutions to supersede these limits and enhance scalability.
4. Transaction fees
An aspect where Litecoin is considerably better than its older and more popular counterpart is transactional fees. Litecoin users can expect to pay an average of $0.03 for each transaction. Bitcoin, meanwhile, charges an average transactional fee of $7.60. Why this significant difference? Mainly because the Litecoin network has put aside LTC, which is not a derivative of transaction costs, so that it can incentivize miners.
There are numerous value predictions regarding both currencies, ranging from extremely bullish to highly conservative. It is expected that both Bitcoin and Litecoin will continue to lead the market, although some experts feel that rivals such as Ether might be able to grab Bitcoin’s top spot.
Regardless, either currency and community will see growth in terms of node supporters, developers, miners, and of course, users. Litecoin, in particular, will enjoy considerable increases in transactions due to the crypto’s immensely low-cost payment system for P2P transactions. Bitcoin, meanwhile, will retain its ‘digital gold’ status due to the prestige associated with being the very first cryptocurrency.