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The Difference Between Litecoin & Bitcoin?

The invention of Bitcoin in 2009 ushered in a new age of decentralized cryptocurrencies.

The Difference Between Litecoin & Bitcoin? iBase Trading.
iBase Trading Crypto News

The invention of Bitcoin in 2009 ushered in a new age of decentralized cryptocurrencies. While Bitcoin was at the time the gold standard, it had problems. In 2011, Charlie Lee created Litecoin as an alternative cryptocurrency based on the Bitcoin idea. Litecoin has shown to be significantly quicker and cheaper than Bitcoin, despite its lower market size.

Similarities Between Bitcoin and Litecoin

Litecoin (LTC) and Bitcoin (BTC) are both decentralized cryptocurrencies with no central authority to control them. They have a comparable consensus process and transaction approach as well.

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Proof-of-Work Consensus Mechanism

The same mechanism is used to mine both coins. To add new blocks to the blockchain, they employ the Proof-of-Work (PoW) consensus process. This approach pays the first individual who achieves distributed consensus by solving a computing challenge (i.e. mining).

Storage and Transaction Method

A cryptocurrency exchange may buy and sell Litecoin and Bitcoin. They can also be kept secure between transactions in a digital or cold storage wallet.

Differences Between Bitcoin and Litecoin

Litecoin and Bitcoin seem similar on the surface but they are two very different cryptocurrencies.

Algorithms

They both utilize the PoW consensus technique to create new blocks, but their cryptographic mining algorithms are different. Bitcoin utilizes the SHA-256 algorithm, but Litcoin uses the Scrypt algorithm, which is a less sophisticated version of Bitcoin. Even so, to mine Bitcoin or Litecoin, you’d need an ASIC miner, which may be expensive.

Transaction Speed

When compared to Bitcoin, one of Litecoin’s advantages is its faster transaction speed. Litecoin has a maximum transaction throughput of 56 transactions per second (tps), whereas Bitcoin only has a capacity of roughly 7 tps.

Litecoin transactions take 2.5 minutes on average to be completely validated and uploaded to the blockchain, whereas Bitcoin transactions take roughly 10 minutes.

Transaction Fees

Another feature where Litecoin outperforms Bitcoin is its lower transaction fees. You can expect to pay around $0.04 on average in transaction fees with Litecoin whereas Bitcoin charges $7.60 on average. The low fees with Litecoin are due to the fact that the LTC rewarded to miners doesn’t come from the transaction fees unlike with Bitcoin.

Coin Limit and Block Rewards

Litecoin also outperforms Bitcoin because of its reduced transaction costs. Litecoin transaction costs are roughly $0.04 on average, but Bitcoin transaction fees are over $7.60 on average. The low fees of Litecoin are due to the fact that, unlike Bitcoin, the LTC granted to miners does not originate from transaction fees.

Value and Market Cap

Bitcoin, being the first cryptocurrency, is more of a store of value than a medium of exchange. Its market capitalization is $891 billion, and its current worth is $47,360. It maintains its position as the most valuable cryptocurrency.

Although Litecoin isn’t as well-known, retailers find it to be more appealing as a daily digital currency. With a market valuation of $3 billion, it is now worth $182.

Future of Bitcoin and Litecoin

Litecoin should be a supplement to Bitcoin rather than a rival. Each one serves a certain purpose and occupies a distinct position as a crypto market leader.

Bitcoin will very certainly maintain its status as digital gold due to its historical significance as the first cryptocurrency. Litecoin would remain a popular cryptocurrency because it is the silver to Bitcoin’s gold and supports exceptionally low-cost peer-to-peer transactions.

How To Bitcoin

While we are positive about the crypto industry as a whole, we highly advise you to conduct your own research. We’ve written a How-To Bitcoin eBook to help you learn more about Bitcoin and start investing in it.

“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”

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Angela Lopez stepped into the Cryptocurrency world after her Journalism career and hasn't looked back since, writing about anything crypto-related. She started working with iBasetrading in October 2011.