Bitcoin vs Litecoin
New York City: Interest in cryptocurrency has flowed considerably over the last several years. Since its inception, Bitcoin has attracted the attention of investors. The cryptocurrency Bitcoin has been the center of this attention because of its association with the creation of bitcoin billionaires and the growth of people’s digital wealth.
There have been hundreds of alternative cryptocurrencies launched or split off of Bitcoin since its inception. One example of an alternative cryptocurrency is Litecoin (LTC), which split off from Bitcoin in 2011. Although both Litecoin and Bitcoin use blockchain technology and a verification process, there are important distinctions between the two that may influence your choice.
In 2009, Bitcoin was released as the world’s first cryptocurrency. In the time since, it has gone from being a curious curiosity to a potentially volatile commodity, investment, and medium of exchange. Decentralized and shared computer resources are used to ensure the integrity of a distributed ledger (blockchain).
As a consensus mechanism and validation process, proof-of-work relies on the processing capacity of graphics processing units (GPUs) and, to a lesser degree, central processing units (CPUs) to ensure the legitimacy of blockchain transactions and blocks.
The blockchain is encrypted using a cryptographic hash method called SHA-256. For encryption purposes, the hash function transforms input into a fixed-length output.
When Charlie Lee, then a Google developer, announced the release of a “lite version of Bitcoin” on a prominent Bitcoin forum in 2011, he was referring to Litecoin. In contrast to Bitcoin’s inclination toward centralization, Litecoin was founded to be decentralized.
The Litecoin hashing mechanism is the main technological difference between the two cryptocurrencies. Since SHA-256 can be swiftly computed by the ALUs of GPUs, it is used in Bitcoin.
Differentiating between Bitcoin and Litecoin is also possible by looking at their market capitalizations. Bitcoin’s growing popularity may be attributed to two factors: the ease with which it can be mined by big farms and mining pools, and the fact that its increasing demand has resulted in a very high cryptocurrency-to-dollar conversion rate. Due to Bitcoin’s larger demand and limited supply, the Litecoin market is far smaller.
The maximum possible number of coins for each cryptocurrency is another key distinction between Bitcoin and Litecoin. Litecoin’s unique selling point lies in this area. There will never be more than 21 million Bitcoins in circulation on the Bitcoin network, but 84 million Litecoins will operate on the Litecoin network.
This may seem like a big boon for Litecoin at first, but the reality is that the market determines the value of goods and investments based on supply and demand and other factors like consumer and investor attitude. The price of Bitcoin seems to reflect the belief of both groups that it serves their interests, values, and financial aspirations.
Although Bitcoin and Litecoin transactions occur instantly in theory, they need time to be validated by the networks’ other users. Faster transactions were one of the primary motivations for the creation of Litecoin.
On average, a Bitcoin transaction takes the network around nine minutes to confirm (during which time a block is validated and added to the blockchain). Yet, this varies greatly depending on the volume of data being sent across the network. Litecoin’s counterpart takes around 2.5 minutes to generate.
Comparing the ROI of Bitcoin vs Litecoin
The fact that Litecoin mining is so concentrated may be related to the fact that it is now unprofitable to mine. It is reasonable to infer that previous Litecoin miners have abandoned LTC mining until the cryptocurrency’s mining viability returns, since few miners are prepared to operate in the red (no earnings). That’s bad news for Litecoin’s future. As the number of miners for a Proof of Work cryptocurrency decreases, the network is less resistant to 51% attacks, and the cryptocurrency as a whole is less valuable. Nonetheless, Bitcoin’s greater price may compensate for the fact that Bitcoin is harder to mine. Bitcoin’s hashrate reflects its status as the most profitable cryptocurrency to mine at now.
As a conclusion, Litecoin and Bitcoin are two of the most widely used cryptocurrencies and have been around for quite some time. Despite Litecoin’s inception as a Bitcoin alternative with speedier transaction times and decentralized mining, new distinctions between the two have evolved.
Indeed, Litecoin features quicker transactions and reduced transaction costs, as its “Lite” moniker would indicate. In addition, its price is cheaper than Bitcoin’s, which may encourage more individuals, particularly novice investors, to purchase it.
Bitcoin, on the other hand, is preferred because to its lower mining centralization, better mining profitability, larger hashrate, and more community awareness and acceptance.