Home Financials Bitcoin vs Litecoin: What’s the Difference

Bitcoin vs Litecoin: What’s the Difference

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source: currency.com

If you analyze the path of any cryptocurrency, you will see that each one has a turbulent history. There were many ups and downs, but many of them succeeded to survive all these crises.

It is not a secret that Bitcoin is the most popular cryptocurrency. Most people that are not quite familiar with this subject usually only heard abouvt BTC.

Many investors became rich thanks to this cryptocurrency while many of them are trying to reach the highest goals. If you are willing to learn more about Bitcoin, we suggest you visit bitcoinscircuit.com and research the subject.

Anyway, Bitcoin is not the only cryptocurrency that deserves the attention of the people. There are a couple of them that made some bigger success and this time we will focus on one – Litecoin.

People that are new in the crypto world do not know in which cryptocurrency they should invest. That’s why we want to compare these two coins and show you which capital differences they have.
Let’s start.

Bitcoin

source: aljazeera.com

The first difference that we need to mention is the market capitalization of these two currencies. As we said, Bitcoin is the most popular one, and the value of market capitalization is currently around 67 billion dollars. On the contrary, the value of Litecoin’s market capitalization is around 3 billion dollars.

However, things were not always good. Bitcoin had a turbulent history. Let’s get back to July 2010. At that moment, the market capitalization of the Bitcoin was around 42 thousand dollars. Only 7 years later, the Bitcoin “industry” reached the highest market cap ever. On December 17, 2017, the market cap of this cryptocurrency was 326 billion dollars.

Anyway, this could be a good and a bad sign for new investors. The value of the BTC is currently improving and that could bring you profit if you make smart investments. However, it also means that the competition in this field is tough. That’s why some people look for alternatives. Some other cryptocurrencies like Litecoin are also perspective with a lot of lower demand.

Litecoin

source: coininsider.com

The second difference between these two currencies is the number of coins that each cryptocurrency can produce. Because of this fact, Litecoin distinguishes itself. You maybe do not know, but the Bitcoin network cannot ever produce more than 21 million coins. That’s the limit that was determined almost at the beginning. However, LTC has higher limits. The total amount of coins that LTC can produce is 84 million.

We suppose that you think that this is a huge advantage of LTC. Well, in theory, this might be true. Yet, in reality, this feature could be negligible. The reason for that is simple. Both cryptocurrencies, Litecoin and Bitcoin are divisible into nearly infinitesimal amounts.

More precisely, the minimum amount of BTC that users can transfer from one place to another is the hundred millionth part of one coin. When we translate that into numbers, that’s 0.00000001 coins. If you sometimes see the phrase “Satoshi”, then you should know that’s the name of that millionth part of the Bitcoin. When you look closer, this is a great advantage. It won’t be a problem for you to buy some low-priced goods without any huge complications.

Key Differences

Okay, we already mentioned some that could give you a clearer picture of the features that these two cryptocurrencies have. However, that’s not it. Some even more differences might help you decide which currency will be better for you.

Transaction Time

source: cryptocurrencyhub.io

First of all, let’s start with one common thing. Litecoin and Bitcoin allow you to instantly transfer your coins from one place to another. However, the transactions that you make need to be confirmed by other network participants.

Logically, people do not want to wait a lot. The important fact is that the BTC network usually confirms transactions for a bit more than 10 minutes per 1 transaction on average. However, the time depends a lot on the traffic. If the traffic is high, you might need to wait for an extra minute. However, it can also happen that you wait for less than 5 minutes in some cases.

Things are different when we talk about Litecoin. The transaction time of this cryptocurrency is usually between 2 and 3 minutes on average. However, we are not sure if this is an advantage or not. If you want to accomplish the transaction quickly, then this news will be a good one for you. Yet, the Litecoin transaction is probably quicker because of less popularity compared to Bitcoin.

When we compare these times, it means that a buyer or a seller will need to wait for more than 4 times to send or receive the required amount.

Cryptographic Algorithm

Well, if you already researched BTC, then you know that this crypto is using the same algorithm for a longer period. More precisely, it uses the SHA-256 algorithm. On the contrary, Litecoin uses a completely different algorithm that is one of the newest on the market. More precisely, the name of that algorithm is Scrypt.

So, why is this one of the most important differences?

source: mtpr.org

The significance of different algorithms is their impact on the mining process. The process of transaction confirmation I both cases requires substantial computing power. Have you ever heard about miners? Well, these members of the current networks use their computing resources to confirm the transactions of the other network users.

Because of that, they get the reward in the form of units of the currency which they have mined.

SHA-256, Bitcoin’s algorithm, is the more complex algorithm if you ask the majority of miners. The Bitcoin miners invested a lot of effort to improve the quality of this algorithm in the last couple of years. They have utilized the increasingly sophisticated methods that are allowing miners to be more effective.

However, when we talk about Scrypt, things are a bit different. It is made to be less susceptible. Because of that, the popularity of Scrypt-based cryptocurrencies like Litecoin became more accessible to users. They have bigger chances to participate in the network as miners.