Bitcoin Vs. Litecoin
The release of Bitcoin brought a great deal of interest to cryptocurrencies, and since its introduction in 2009, there have been other similar types of cryptocurrencies introduced with Litecoin being among them.
Bitcoin has gained worldwide interest. Its creator is considered to be a genius, yet there is no telling who he is as he went by an alias and once Bitcoin was released, he disappeared. His disappearance, nor the questions that surround Bitcoin, have hindered the currency. It is a popular digital currency with much intrigue. Litecoin is another cryptocurrency with a real creator named Charlie Lee that designed Litecoin much like Bitcoin, only to be faster and have a higher cap amount of Litecoins.
The intention when creating Litecoin was to create the “silver” to Bitcoin’s “gold.” So, what are the differences between the two coins? Which is the best cryptocurrency of the two? What is the cost of the two? Let’s compare the two.
There are many similarities between the two currencies. They both are digital currencies, and both are based on the same open source code. They are also different in some respects.
Market Capitalization and Popularity
Bitcoin entered the market costing about eight cents a coin. Today, the value of a Bitcoin is around $600. Its market capitalization is about $217 billion. That is a wonderful inflation rate considering that in 2010 its market capitalization was around $42,000. From thousands to billions. Original investors have made a fortune on the purchase of coins, and it is a currency that is predicted to continue to inflate in value. The current price of a Litecoin is about $242, which is also an increase from its original value of seven cents a coin. In just the past year, a hundred dollars of Litecoin has inflated to a value of $30,000. Litecoin’s market capitalization is around $20 billion.
With each currency, coins must be mined to be released. Complex mathematical problems are solved using a great deal of computer power for the coins to be released. The two cryptocurrencies are different in the amounts of coins that can be released. The Bitcoin network has capped off its amount of coins that can be mined at 21 million coins. Litecoin, on the other hand, has capped off its amount of coins at 84 million. The adrenaline and excitement for the investment of a cryptocurrency might give Litecoin the advantage in this aspect, as there are a greater number of coins. Litecoin also offers the advantage of using the coins in whole units rather than a fraction of a unit.
Both are fast, but Litecoin is faster. From a technical point, transactions occur instantaneously with both currencies, but time is necessary for the transactions to be verified by other network participants. Sources relate that the Bitcoin network long-term average time for transaction verification is about nine minutes per transaction. Litecoin, on the other hand, is about two and a half minutes; so, Litecoin is much faster and processing and verifying transactions. For merchants, Litecoin may be more attractive as it processes and verifies quicker, confirming payment in minutes.
Bitcoin and Litecoin use different algorithms. Bitcoin uses an SHA-256 algorithm, and Litecoin uses an algorithm called a scrypt. So, what’s the difference between the two? How they mine coins. To confirm a transaction a great amount of computing power is necessary, which leads many miners to pool together to solve equations.
SHA-256 is an algorithm that is complex; in fact, it is thought to be more complex than the scrypt that Litecoin uses. The most used way to mine for Bitcoin is by using Application Specific Integrated Circuits, which are hardware systems. This is different than the original form of mining that used CPUs and GPUs. What’s occurred with the advancements is that for the everyday user, Bitcoin mining is not possible.
The design of scrypt is to be less susceptible to the kinds of custom hardware solutions that ASIC based mining uses. In other words, Litecoin is open for more users that would like to mine for coins.
Both Bitcoin and Litecoin are an investment. Both take tremendous computing power to solve difficult mathematical problems to release coins. Both are based on open source code. One is the name that brought cryptocurrencies into the homes of people worldwide, while the other was created to be the silver of the other’s gold. Bitcoin is the name that made cryptocurrencies a renowned name, Litecoin was created to be the silver of Bitcoin’s gold.