Let’s do some Time Travel
So the legend goes back to 2008 when our beloved Bitcoin was first incepted in a paper called- ‘A peer to peer electronic cash system’. Bitcoin is in fact the first ‘real digital currency’ and to this date, it is quite well known throughout the world. It was fundamentally created by ‘Satoshi Nakamoto’ who aimed to solve the double-spending issue in the digital currency system.
In the meantime, while Bitcoin was earning a lot of respect and value and dollars, Charlie lee, who is a computer scientist, thought that Bitcoin could work even better. To make BTC work faster and cheaper, he proposed alterations in the rules of BTC. However, these requests were disregarded and disagreed with, which led to a fork (small dispute). This fork gradually became a hard fork (a disputable situation between the users of digital currency, which leads to the division of the currency in two parts) and that’s basically how our beloved Litecoin was born.
Let’s look at the overview
To understand it, we can have the benefit of taking a glance at the differences between the two currencies.
BASISBITCOINLITECOINLaunch periodJanuary 2009November 2011CreatorSatoshi NakamotoCharlie LeeCryptographic algorithmSHA-256ScryptMarket Supply Limit21 Million84 MillionBlock Rewards per Block12.525Average transaction Time10 minutes2.5 minutesTotal market capital1041.38 billion US Dollars15.03 billion US DollarsPresent value of 1 Coin in US Dollars
Now, let us discuss some of the above-mentioned differences and a couple more in detail to get a better insight into the main differences between Bitcoin (BTC) and Litecoin (LTC).
- Technology Algorithm — The basic difference in the working of Bitcoin and Litecoin lies in the algorithms used. Bitcoin uses the SHA-256 algorithm and the Litecoin uses a comparatively new technique ‘Scrypt’. The algorithms have a direct impact on the speed of mining a new coin. SHA-256 is a more complex algorithm than Scrypt, but it also provides a great parallel speed working/processing. The mining of scrypt based cryptocurrencies is much more accessible for the common users as compared to bitcoin miners, who have to use Application Specific Integrated Circuits (ASICs).
- Transaction Speed –Mining bitcoins is more expensive and rather slow as it takes about 10 minutes to add a new block to the blockchain. On the other hand, mining a Litecoin is much faster and uses less electricity as well. Adding a new block to the blockchain in the case of Litecoin takes about 2.5 minutes. Therefore, there is a high probability that people would start using Litecoin as a substitute for money in the near future as it is much faster and swifter in use.
- Difference in fees charged — Like all other cryptocurrencies, the transaction fees charged for both Bitcoin and Litecoin is low. The transaction fee for Litecoin when it comes in comparison with Bitcoin, it (Litecoin) is much cheaper.
- Difference in value — Bitcoin is considered ‘gold’ whereas Litecoin is considered ‘silver’ of the digital- currency world. This means, that Bitcoin may be regarded as a store of value and Litecoin may be regarded as a boon for day-to-day transactions. Since there is a chance that value of Bitcoin will become reliable and predictable. We can say so because 3/4th of the Bitcoin is already mined and hence it could act as a store of value just like ‘gold.’
- Lightning Network — Both Bitcoin and Litecoin aim to improve the speed of their transactions, and the measures they take to fulfil this goal is called ‘Lightning network’. Lightning Network would act as a bridge between Bitcoin and Litecoin. So there is not much difference rather we can see a complementary relation between the two leading Cryptocurrencies.
Let’s conclude the difference between Bitcoin and Litecoin
Both Bitcoin and Litecoin have shown exponential growth and expansion in their networks. Despite the emergence of more than 1000 cryptocurrency coins in the market, Litecoin has been able to maintain its position in the market, because it acted as an extension to Bitcoin. Both Bitcoin and Litecoin are great and valuable cryptocurrencies and have proven to be players of the long run. For a better and diversified portfolio, investing in both of them would act to your benefit.