Bitcoin started a revolution that the world will forever remember. It opened the path for other cryptocurrencies to prosper and make the industry better with newer technologies that could be sustained according to current needs and requirements. But Bitcoin is not perfect. This is why Litecoin came into existence; it aimed to solve the problems faced by Bitcoin users.
Today, both cryptocurrencies remain strong. Bitcoin is still the king, and Litecoin is being adopted by users, organizations, and firms globally. What are the key differences between Litecoin and Bitcoin? Which has more potential to grow in 2023? Let’s take a deeper look!
- Bitcoin is the original cryptocurrency, and Litecoin was created to improve transaction time
- Litecoin uses a different mining mechanism intended to reduce power consumption
- LTC mining is nowhere near as profitable as BTC mining
- LTC value and market cap is much lower than BTC
- Bitcoin apepars to be a safer investment than Litecoin in the long run
Introduction to Bitcoin: How it all started?
Bitcoin was intended to be an efficient way of sending money through the Internet. But why not just use existing payment services like PayPal? Unlike payment services which are usually connected to banks in order to access fiat currencies, Bitcoin was a currency without a physical form.
Launched by its creator Satoshi Nakamoto in 2009, Bitcoin is still the most traded digital asset. It brought some anonymity to the network and allowed users to have privacy while sending or transferring funds. The transactions were also intended to be faster and cheaper. Unfortunately, things didn't turn out very well in these aspects, which is where Litecoin comes in.
The origins of Litecoin: The better version?
Litecoin was launched in 2011, two years after the creation of Bitcoin. It was actually considered the better and faster version of its parent asset. Litecoin was designed by a former Google engineer who picked the positives from Bitcoin and removed pretty much all its negatives. This made Litecoin a superior asset in terms of real-life usability, making it possible for the asset to be adapted to the finance industry.
What are the key differences between Litecoin and Bitcoin?
LTC vs BTC Transaction Speed
One of the major problems with Bitcoin that Litecoin fixed was transaction time. At that time, the transaction speed of Bitcoin was average to decent, but it was not ideal. What Litecoin did was considerably reduce transaction times to make payments faster and more efficient.
Bitcoin transactions usually take around 10 minutes to be confirmed, whereas Litecoin transactions only take around 2.5 minutes. Litecoin is four times faster than Bitcoin and can handle transactions more efficiently.
LTC vs BTC Mining Mechanism
LTC and BTC are both mining-based cryptocurrencies, in other words it is necessary for the blocks to be mined on the network in order for the transactions to go through. However, the two assets use different mining mechanisms. BTC uses a more complex mining algorithm known as SHA-256; LTC uses the Scrypt mining algorithm.
The creator of Litecoin was concerned about a major Bitcoin mining problem and the overall electricity consumption due to heavy machines like ASIC miners. This was why he introduced the Scrypt algorithm, which allowed low-grade miners to have opportunities. Later on, ASIC machines were introduced that were explicitly designed for LTC mining, defeating the original aim to change the mining system.
LTC vs BTC hash rate and profitability
In terms of profitability, Litecoin comes nowhere near Bitcoin. Mining LTC today yields almost zero profit, which reduced the overall number of miners willing to run the network. That is also what brings risk to the network, making it vulnerable to the 51% attack, where the attacker group aims to gain control over the network. Also, the hash rate of LTC is also lower than BTC’s, and it has also been decreasing constantly due to miners getting out.
So, if you want to mine in order to profit, BTC will be the best bet for you. Going for LTC mining would only result in loss due to the electricity consumption and its costs.
LTC vs BTC Value
As of the 26th of September 2022, Bitcoin is being traded for just under $19,000, and Litecoin is being traded for around $50. Bitcoin has a massive advantage when it comes to value, and there is no stopping it. At its best, Bitcoin even reached around $60,000, whereas the highest value Litecoin ever reached was around $400.
LTC vs BTC Market cap and maximum supply
Being the asset with the highest value in the crypto industry, Bitcoin also has the highest market cap. As of September 2022, Bitcoin has a market cap of $360 billion; on the other hand, Litecoin has a $3.7 billion market cap.
There are only 21 million Bitcoins in existence, whereas Litecoin has a maximum supply of 84 million.
Is it worth investing in Bitcoin or Litecoin in 2023?
Bitcoin has always been a good investment if you are willing to wait and you're not looking for quick profits. Litecoin also holds potential and has excellent practical use, making it possible for its value to go further and give you substantial profits. The best thing is the whole crypto market has been down significantly in 2022, which can mean that now is a good time to invest.
But make sure to do your own research and consider all factors before making an investment decision. Remember to only invest what you cannot afford to lose, as the crypto industry is very volatile.
Litecoin was designed after the launch of Bitcoin, giving Litecoin's creator time to evaluate and make the asset better. This is exactly what happened, as Litecoin is faster and cheaper than Bitcoin. However, even after all these years, Bitcoin is ruling the crypto industry with its enormous value and standing.
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