Just a few years ago, it seemed that most of the public had very little interest and understanding of cryptocurrencies. However, today it’s hard to go throughout one’s day without hearing about people talking about the price of bitcoin.
With new and simpler ways of investing in crypto, it seems that the general public has taken a liking to cryptocurrencies. Most people only really know about bitcoin, but there are a variety of coins out there that are also worth knowing about.
With so many options out there, it is very difficult for other coins to stand out. However, Litecoin (LTC) has become a popular competitor to Bitcoin (BTC). While not as popular as Bitcoin, it is certainly making waves.
So should you consider Litecoin? That’s a question worth exploring. So keep on reading and we will take you through the main differences between bitcoin and litecoin that you need to know about.
Similarities Between Litecoin and Bitcoin
When you first look at them, it would seem that litecoin and bitcoin have a lot in common. At their most basic level, these two coins are decentralized cryptocurrencies. While a fiat currency like the American dollar or British pound relies on the backing of a central bank to retain its value and control the circulation, crypto is the opposite.
There is no centralized authority for these cryptocurrencies. Instead, they rely on a network of many different participants.
Litecoin was started a few years after bitcoin and was meant to be the lite version of Bitcoin. If you view Bitcoin as the gold standard of crypto, you can compare Litecoin to the silver standard.
Because of this, Litecoin uses a lot of features that Bitcoin uses.
Proof of Work
One big similarity between litecoin and bitcoin is that they’re both proof of work ecosystems. This means that the underlying process for how the coins are generated is similar on a fundamental level.
Transactions and Storage
Both litecoin and bitcoin can be mined or bought through a crypto exchange. They also both need to be stored in a digital wallet in order to be stored safely between transactions.
Also, the prices of both coins have shown to fluctuate greatly over time.
Differences Between Bitcoin and Litecoin
Perhaps the biggest difference between these two coins is the size of their market capitalizations.
Bitcoin’s market cap is significantly greater than litecoin, which makes a lot of sense. But that doesn’t necessarily mean that it is better than litecoin, although it does mean that bitcoin is likely accepted by more vendors.
When comparing these two cryptocurrencies, you also need to think about the total number of coins that each crypto can generate. This is where litecoin really shines.
There will never be more than 21 million bitcoins. However, litecoin has the potential to generate up to 84 million coins.
Theoretically, a transaction can take place instantaneously on both the litecoin and bitcoin networks. However, time is still needed to confirm those transactions by other participants on the network. One of the main goals of litecoin is to prioritize the speed at which transactions take place.
This has helped litecoin become more popular among users. A bitcoin transaction takes several minutes to complete, although it can take longer when there is a lot of traffic.
A litecoin transaction typically takes half the amount of time.
While it might seem like a big deal now, it could make litecoin very attractive to vendors. For example, someone who sells an item in exchange for bitcoin would need to wait a lot longer to confirm the payment than if they were selling that item for litecoin.
However, a vendor can also choose to accept transactions without waiting for anything to be confirmed, although that is very risky.
A major difference between litecoin and bitcoin has to do with the algorithms that they utilize. Bitcoin utilizes an old and popular algorithm while litecoin’s formula is much newer.
The specific kind of algorithm will have an impact on how new coins are mined. For both of these coins, the process to confirm transactions requires a lot of computer power.
Some people of the crypto network will put all of their computing resources to mining more coins.
The algorithm used for bitcoin is more complex than the one used for litecoin. However, bitcoin miners have also been able to exploit the system and become extremely efficient at mining.
It is not as easy to automate the process of mining litecoin. This has made it easier for new miners to access the coin because they aren’t competing with people who have computers running constantly in order to mine.
A lot of people who mine litecoin do so with GPUs and CPUs.
You can also discover more about litecoin by researching it on the internet.
The Importance of Knowing About the Differences Between Bitcoin and Litecoin
Hopefully, after reading the above article, you now have a better idea of the differences between litecoin and bitcoin are. As we can see, both of these cryptocurrencies offer consumers and investors a powerful alternative to fiat currencies.
If you are looking for a universally accepted digital cryptocurrency, then you will likely want to go with bitcoin. However, if you are interested in mining coins on your, want to take advantage of the large number of coins, or get in while it’s still new, then you should definitely consider going with litecoin.
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