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Differences Between Bitcoin and Litecoin

bitcoin and litecoin

October 16, 2020 | 

626 Views | 

JOHN K MWANIKI | 

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Bitcoin and Litecoin are more of the same concepts. Litecoin operates like Bitcoin leading to references like "digital silver." This is in line with Bitcoin working as the digital gold. 

Even though the coins are almost similar, they also have differences. Here are some of the top differences between Bitcoin and Litecoin. 

supply 

One of the significant differences between Bitcoin and Litecoin is the number of coins. Bitcoin has an end supply of 21 million coins; this is different from Litecoin's 84 million coins. 

The high number seems to be helpful to Litecoin. Still, both come are useful for real-world applications. They are usable when purchasing low-value products as Bitcoin is also as divisible. Bitcoin can reach the least amount of 0.00000008BTC. 

There have been concerns about most people preferring to buy in whole units. For example, one would choose to buy a $100 product using 2LTC than 0.0091BTC. This is an advantage to Litecoin. The analysis was by IBM executive Richard Brown

Still, transacting both coins is convenient with new Bitcoin exchange software in place. Cryptocurrency exchanges and wallets like Coinbase provide for automatic crypto rates in fiat. 

Bitcoin and Litecoin Algorithm 

The algorithm is one of the top technical differences between Bitcoin and Litecoin. Bitcoin uses the longstanding SHA-256 algorithm. Litecoin uses the newer Scrypt algorithm. 

The algorithms are useful in mining. They determine how hard it is to mine the crypto. The SHA-256 is more complicated. It also allows a higher degree of parallel mining. The sophistication of the algorithm means Bitcoin requires more powerful machines. There are special ASIC machines used for mining the coins. 

The ASIC is quite expensive to buy and run. They are power-intensive, and miners might end up with fewer profits. Still, several mining houses are coming up to cater to the concerns. They tend to operate from countries with low power costs. 

The Scrypt algorithm is a little less power-intensive. It allows users with CPUs and GPUs to mine the Litecoin. 

Mining Litecoin is accessible to everyday users more than for Bitcoin

Bitcoin and Litecoin Transaction Speeds

The transaction speeds in digital currencies have been an issue for some time. Bitcoin supports 4 – 7 transactions per second. It also comes with a confirmation period of 10 minutes. This is different from Litecoin, with 56 transactions per second. It also has a 2.5-minutes confirmation time. 

Even though Litecoin is faster, it is slower compared to the fiat currency. Credit cards like Visa support up to 4000 transactions per second. Anyone used to such high speeds would find it hard having to wait when using cryptos. 

For that, the cryptocurrencies Bitcoin and Litecoin have been looking for possible solutions. Looking for such solutions is one of the reasons for the Bitcoin fork leading to Bitcoin Cash. The newer version comes with expanded blocks to accommodate more transactions. 

Bitcoin has also introduced Segwit to help manage the speeds. It separates digital signatures from the transactions. This allows for more space in the blockchain hence faster transactions. The improvements have brought the lightning network solutions. 

In the future, the digital currency will look for ways to increase the speeds. For now, Litecoin beats Bitcoin in the transaction speeds. 

Bitcoin and Litecoin Mining Rewards 

Having understood the algorithm differences, you know Bitcoin and Litecoin undergo mining. The difference is in the mining rewards. The current reward for Bitcoin miners is 6.25BTC for every successful block. The mining value started at 50BTC and has been reducing at every halving. 

Litecoin also involves mining rewards. The current mining rewards for Litecoin is 12.5 LTC, following the 2019 halving. The rewards started at an initial 50LTC. It has since been reducing by half after every halving. 

The differences in the mining rewards are in the start period. Bitcoin was launched earlier thus has halved more. 

Bitcoin and Litecoin Market Capitalization

Market capitalization is a sign of Bitcoin and Litecoin's market performance. Market capitalization is the total number of coins times the current market price. 

Bitcoin, as the top crypto, has the best market cap. Its market capitalization is currently at $199.62B. This is high compared to that of Litecoin at $3.3B. 

No other coin comes close to Bitcoin when it comes to market cap. The second coin is Ethereum, with a market cap of $42B. The difference shows the market share of Bitcoin compared to the other currencies. 

It would take some time before any other coin comes close to beating Bitcoin. 

Coin acceptance 

Even though the crypto world is big as a whole, Bitcoin has been the undefeated coin. Being the first coin, it has kept its place as the leading coin. No digital coin currency has come close to beating it as the most traded and trusted. That is why it has excelled as the "digital gold."

Bitcoin has also made it such that it is the determinant of the market price. An increase in the Bitcoin value mostly rubs off on the other coins. Bitcoin's acceptance has been increasing in recent times more than ever. 

Several merchants are accepting the coin. Some of the top merchants accepting the currency are KFC, Starbucks, Amazon, AT&T, and more. There are also Bitcoin ATMs coming up all over the world. 

Litecoin's acceptance has also been increasing for its transaction speeds and affordability. It has become so valuable, especially for smaller transactions. The list of accepted merchants is also growing fast. It has partnered with entities like the American Football giant, the Miami Dolphins.

Still, Bitcoin is some way ahead of Litecoin on acceptance. It will take some time for any catch up as Bitcoin and Litecoin are expanding. 

Bitcoin and Litecoin Bottom Line 

Choosing between Litecoin and Bitcoin is quite hard. Choosing either comes with advantages and some things you have to forego. For example, while Bitcoin has a higher value, Litecoin has higher transaction speeds. 

Taking time to understand the differences helps when looking for an investment. Still, you are better off spreading risks. Invest in both coins. They are both expanding in use factors and adoption. Even though Bitcoin is more widespread, Litecoin is catching up. 

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