Similarities and Differences between Bitcoin and Litecoin
Snapshot
- Bitcoin and Litecoin: Similarities
- Bitcoin and Litecoin: Difference
Bitcoin and Litecoin, both are digital currencies. Bitcoin originated in 2009 and is the leader in the crypto market; Litecoin was founded in 2011, two years after Bitcoin, and is a leading competitor of Bitcoin.
Bitcoin and Litecoin: Similarities
There are a lot of similarities between Bitcoin and Litecoin. Both are decentralized cryptocurrencies, meaning they are not subject to a centralized authority. They completely rely upon the cryptographic integrity of the network.
Litecoin was created by former Google engineer Charlie Lee, as a liter version of Bitcoin, in reaction to it. For this reason, Litecoin has incorporated many features of Bitcoin, which its developers thought were working well for Bitcoin, and changes have been made to the features that the developers thought needed improvement
Proof of Work (POW)
The most common similarity that exists between Bitcoin and Litecoin is that both are POW ecosystems. Meaning, the process involved in the mining of the cryptocurrency, which is authentication and addition to the blockchain is similar (not the same).
Transactions and Storage
During the transaction of Bitcoin and Litecoin, many basic elements are very similar. Crypto exchanges are used to buy both cryptocurrencies and a mining rig is used to mine them. For storage, both are required to be stored on digital wallets. Even the prices of both cryptocurrencies have proven to be highly volatile, depending upon various factors such as government regulations, and the interest of investors.
Bitcoin and Litecoin: Difference
Market Capitalization
The biggest difference between Bitcoin and Litecoin is in terms of their market capitalization. As of today, the market cap of Bitcoin is around $920 million and that of Litecoin is around $10 million.
As a network Bitcoin is way ahead of its counterparts. The closest competitor of Bitcoin is Ethereum, which is the second-largest cryptocurrency with a market cap of $476 million as of today.
Distribution
Another significant difference that exists between Bitcoin and Litecoin is the total number of coins. Where the Bitcoin network will have 21 million coins in circulation, the Litecoin network can go up to 84 million coins.
This may not be much of an advantage for Litecoin as both cryptocurrencies are divisible into nearly infinitesimal amounts. Thus both cryptocurrencies can be used to purchase low-priced goods and services.
Transaction Speed
In Bitcoin and Litecoin networks transactions occur instantaneously, time is required for the confirmation of these transactions by other network participants. According to the reports by “Blockchain.com”, the average confirmation time for transactions on a Bitcoin network is under nine minutes and may vary with an increase in traffic. The average confirmation time for transactions on a Litecoin network is around 2.5 minutes.
Algorithms
The most technical difference between the two networks is the cryptographic algorithm that they employ. The algorithm used by Bitcoin is the SHA-256 and Litecoin uses a new algorithm called script.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investing.
Photo by – WorldSpectrum on Pixabay