If you take a look around at the crypto industry, you will see that Bitcoin is still the king of cryptocurrencies even after all these years. It does not matter if we talk about market cap, price, daily trading volume, or even popularity, Bitcoin wins by every metric and is considered the godfather of all digital assets. But the thing is, Bitcoin is not as efficient as you might think. As it was the first ever cryptocurrency, there were a few aspects that were not taken into consideration that make the whole Bitcoin ecosystem slow and inefficient when compared to what we have right now in the financial industry.
For that, assets like Litecoin and Bitcoin Cash were introduced in order to counter the flaws of Bitcoin and bring a revolution to the crypto industry. There are crypto projects that have made accessibility easier, some come with lower fees, some are very fast, and some are more profitable when it comes to mining. But what about Litecoin and Bitcoin Cash? Which one should you explore in 2022, and which is a more promising project to invest in? Let’s take all possibilities into consideration and find out the answers to some crucial questions.
The history of Litecoin and Bitcoin Cash
Bitcoin Cash is a relatively newer coin as compared to Litecoin, which was released over a decade ago, in 2012. Bitcoin Cash was released in 2017, and it is considered the better version of Bitcoin. Bitcoin Cash was invented with a few aims in mind, and one of them was to improve the scalability factor of Bitcoin, which was well below average.
Litecoin is a digital asset created by a former Google employee. As the name of the cryptocurrency suggests, Litecoin was intended to be a “lite” version of Bitcoin, with higher efficiency and faster speeds.
Key metrics of Litecoin and Bitcoin Cash
Before we hop on to deciding which coin is better in 2022, it is better to first evaluate the technical information of both of these coins and see what they each have to offer.
Litecoin key metrics
As of the time of writing, Litecoin is being traded at the price of $61.18. It has been down 6.42% in the past 24 hours, which can be worrying for some investors, but volatility in crypto markets are nothing new. Litecoin has a total supply of 84 million coins, and over 70 million coins are circulated in the market.
If we talk about the market cap, Litecoin is at over $4 billion, which is quite massive. The average daily trading volume of Litecoin fluctuates around $500M, and it can be lower or higher depending on the market conditions. Do remember that all the details mentioned above may differ by the time you read this article.
Bitcoin Cash key metrics
Bitcoin Cash trades at a higher price than Litecoin, and is valued at $135.23 at the time of writing. This is probably because of the fact that Bitcoin Cash has a maximum supply of 21 million coins, much less than Litecoin. As for the circulating supply of the asset, it is about 19 million, with an average daily trading volume of around $271 million.
The market cap of Bitcoin Cash is over $2.5 billion, but it is still considerably lower than Litecoin at the time of writing. As for its price change in the past 24 hours, Bitcoin Cash is down by almost 7.5%, as the whole crypto market seems to be quite down today.
Technical analysis of Litecoin and Bitcoin Cash
You should now have a pretty good idea about the market conditions of both the digital assets, but what about the technical analysis? For that, we will have to dive a little deeper into the details and see how Litecoin and Bitcoin Cash work.
Transaction processing time
One of the most important aspects of any cryptocurrency that is designed to make the payment system better, is how fast and efficient it is. Simply put, how much time does an asset take to create a block or process the transactions on the network?
In the case of Bitcoin Cash (BCH), the block creation time is the same as Bitcoin, which is 600 seconds. But wait a minute, if BCH is the successor of BTC, and it was developed to improve the financial system of the previous generation's coin, then why is the block generation time the same as before? Well, the thing to note here is that the block generation time might be the same, but BCH can carry much larger blocks or transactions at the same time and contain them, which Bitcoin cannot do. Also, the overall transaction time depends on the number of confirmations required by the platform you are processing the transaction through. Most platforms require confirmations from anywhere between 5 to 12, which can take up to 20-50 minutes overall. But in case of users deciding to go with zero-confirmation transactions, BCH transfers are instant and hassle-free and simply obliterate the system that was created by BTC.
As for Litecoin (LTC), the block creation or transaction time is 250 seconds which is considerably lower than BCH. It takes only 3 to 4 minutes for a block to be created with LTC, but again, the overall transaction time might vary depending on the number of confirmations required by the platform or exchange.
This is where BCH easily beats the competition by a huge margin when compared to LTC. Considering the block size of BCH, it is initially set at 8MB, which is also considered the default. But the best thing is that the block size of BCH is expandable and can go as high as 32MB, which is 32 times more than what BTC is offering.
As for LTC, the block size of the asset is the same as BTC (1MB), but previously, the Litecoin network initiated incorporation with SegWit, which allowed them to increase their block size to up to 4MB.
The hashing algorithm
Both digital assets use different algorithms to protect the networks and strengthen the overall security. BCH uses the SHA-256 algorithm, which is the same as BTC, but it is still effective and considered quite strong even after all these years. As for Litecoin, it uses the scrypt hashing algorithm, which is regarded as the quicker and more reliable solution for security in accordance with current-generation requirements.
What are zero-confirmation transactions?
As you might already know, in order for a transaction to be processed, that transaction needs to be verified by multiple miners in order to be fulfilled. This process takes time and slows down the whole speed of the transaction. But that is where zero-confirmation transactions come in to make things faster and more efficient. Zero-confirmation transactions are ones that can be processed without confirmation requirements. They are almost instant and take no time to be processed.
Zero-confirmation transactions are still in the adoption phase due to the security risks involved, but BCH seems to be grasping the concept quite firmly. As for LTC, they are yet to implement the zero-confirmation transaction system on their network.
BCH and LTC transaction fees - Which are lower?
Whenever a transaction takes place, a fee is charged to the users; this is generally known as the network fee or miner fee. But the question here is, which of the two coins has lower cost when it comes to the transaction fee?
If we evaluate the average transaction fee of BCH, it lurks around 0.000014 BCH, which equates to roughly 0.005 USD as of the time of writing. As for Litecoin, the transaction fee averages around 0.00019 LTC, which is equal to 0.01 USD. The difference is not much, but still, BCH is cheaper than LTC when processing transactions.
Mining profitability of LTC and BCH
Both LTC and BCH mining is considerably popular all over the world due to the project trust and growing communities. LTC and BCH both can be mined through CPUs, GPUs, and ASIC machines. To do that, you will have to find suitable software that works with the hardware you have. Due to the complexities, competition, and halving of rewards, GPU and CPU mining is no longer profitable for BCH and LTC. Only ASIC mining seems to be a sustainable investment if you actually want to mine these coins.
As for which asset is more profitable for mining, there is no accurate answer to this question. Both of the crypto assets cut down the mining rewards by 50% every four years, so there is not much difference in rewards as compared to the computational power use. Also, you can increase your potential of earning more through mining by joining BCH or LTC mining pools where computational power is combined to mine blocks faster. Solo trading can be a little less profitable and less efficient if you do not have powerful hardware to mine with.
Is it a good idea to buy and hold BCH and LTC in 2022?
So, the question of the day is, should you buy and hold BCH and LTC, and do they hold any potential to grow further? The answer is yes, as both of the projects have plans for the future and have a use-cause to utilize. Unlike meme coins or shitcoins, BCH and LTC are actually working on the betterment of the crypto industry, and that is why they can prove to be a good investment. However, this is not financial advice, and you should always consider the high levels of risk and volatility involved in the crypto industry, and do your own thorough research before deciding to invest any money.
Only invest what you can afford to lose, and never invest your everyday money into the crypto industry due to uncertain market movements. If you are looking for a crypto exchange to buy Bitcoin Cash or Litecoin, have a look at our article on the best crypto exchanges.
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