There have been a series of fluctuations in public interest regarding the crypto community. The adoption rate of cryptocurrency seems to be growing wider as crypto ages. The main focus is still on Bitcoin, being the father of all cryptocurrencies. If you are looking for the perfect crypto to improve your financial status and digital wealth, you should think of Bitcoin.
Since the development of Bitcoin and its deployment into the financial sector, several other cryptocurrencies have been developed, such that some are Bitcoin forked. One of the major Bitcoin forks is Litecoin (LTC) and part of the major altcoins, an alternative coin to Bitcoin. Although Litecoin is a Bitcoin fork with several other similarities, it is worth noting that there’s a significant difference between both cryptos.
What is Bitcoin?
Bitcoin, the father of cryptocurrencies, was the first of its kind. It was developed in 2009 and soon revolutionized into a controversial entity, an exchangeable currency, and an investment. It’s built of community computing power; hence, it’s designed with power in the hands of the masses. It’s no news that Bitcoin runs on a proof-of-work consensus that uses a GPU computational power to verify blocks and transactions on its blockchain. Its cryptographic hash function, SHA-256, helps encrypt the blockchain and converts inputs to fixed lengths of an output. Are all these properties enough reasons to buy Bitcoin? Read this to the end to find out.
What is Litecoin?
Like Bitcoin, Litecoin was launched in 2011 by Charles Lee, a former Google engineer, who called Litecoin the “lite” version of Bitcoin. Litecoin was created because, then, Bitcoin seemed to be exhibiting tendencies to become centralized. Hence, Litecoin has many similarities with Bitcoin, although some parts were improved upon to give Litecoin a fighting chance as better than Bitcoin. Litecoin also uses the proof-of-work consensus mechanism, but it relies on access to a large amount of memory rather than the GPU computing power in Bitcoin. Although Litecoin uses a script for its hashing system, scripts use the SHA-256 with huge memory requirements for PoW mechanisms.
Differences between Bitcoin and Litecoin
Although Litecoin is a Bitcoin fork, there are still some major important differences between these two giant cryptocurrencies, and here are some of them.
This is the most significant difference between Litecoin and Bitcoin. As mentioned above, Bitcoin uses the SHA-256 hashing function. This hashing function processes faster on the ALUs of graphics processing units like Litecoin.
Here’s another difference between Bitcoin and Litecoin. The reason why Bitcoin has remained so popular is that its demand has increased drastically since its development. Bitcoin’s ability to be mined by large mining pools and large firms is also one reason why its crypto-to-dollar rate has increased. Compared to Bitcoin, Litecoin has a smaller market capacity, unlike Bitcoin, which has great demand due to its smaller supply.
Technically, transactions on both Bitcoin and Litecoin networks occur when they are initiated. It takes time for these transactions to be confirmed at the other end. Litecoin, in this regard, was developed to prioritize transaction speed. It takes Bitcoin about 9 minutes per transaction for a transaction to be fully confirmed on the network. However, this could vary depending on the network congestion. It takes Litecoin about two to three minutes per transaction confirmation.
Here’s another significant difference between both cryptos. The total supplies of these coins are not anywhere close, which is why Litecoin stands out differently from Bitcoin. Bitcoin is such that it can never exceed its total supply of 21 million coins, while Litecoin has the capacity to accommodate about 84 million coins. While this could serve as an advantage for Litecoin, it is worth noting that the laws of demand and supply as always been valid for investments and commodities alongside consumers’ feelings.
Knowing which coin to invest in is not very much difficult. You just need to do your research. Both cryptos have been around for over a decade and remain relevant. On the other hand, Bitcoin aims to become the future of money; hence, it’s important that you buy Bitcoin now that its price is still very much pocket friendly. If there’s a crypto investment you won’t regret having, it’s those involving Bitcoin. However, you need to do your research and technical analysis to ensure you are buying at the appropriate time. You can also trade Bitcoin and Litecoin instead of holding for the long term.