Over the past few years, public interest in cryptocurrencies has skyrocketed. The main focus of this interest was Bitcoin, which ushered in the era of cryptocurrencies, becoming the first digital currency in the world.
Since then, however, many other cryptocurrencies have emerged, but at least 20 of them are monitored daily by major financial news sites. Among these coins and tokens, one name stands out that is attracting more and more interest – Litecoin.
Indeed, the developers of Litecoin have long been claiming that their idea is to create “silver” for “gold” Bitcoin.
At first glance, Bitcoin and Litecoin have a lot in common. At the most basic level, they are both cryptocurrencies. While government currencies such as the US dollar or Japanese yen rely on political and legal mechanisms for value and legitimacy, cryptocurrencies rely only on the cryptographic integrity of the network itself.
Bitcoin and Litecoin differ in some important aspects.
As of February 24, 2019, Bitcoin’s market cap is around $ 67 billion, while Litecoin’s market cap is $ 2.7 billion.
Whether Bitcoin’s market cap strikes you as high or low depends a lot on the historical perspective. Considering that Bitcoin’s market cap in July 2010 was only $ 42,000, the current figure seems staggering, albeit not that large compared to the all-time maximum market cap of $ 326 billion on December 17, 2017.
While Bitcoin certainly remains the most valuable player in the cryptocurrency space, other coins and tokens such as Ethereum, Ripple, and Litecoin are catching up with BTC.
One of the main differences between Bitcoin and Litecoin concerns the total number of coins each cryptocurrency can produce. The Bitcoin network will never be able to produce more than 21 million coins, while the number of Litecoin coins goes up to 84 million coins.
In theory, this sounds like a significant advantage for Litecoin, but the actual effects may be negligible. This is because both Bitcoin and Litecoin are split into almost infinitesimal amounts. In fact, the minimum amount of Bitcoins transferred is one hundred million shares (0.00000001 BTC), colloquially referred to as ” satoshi “.
Therefore, users of any currency will have no difficulty in purchasing inexpensive goods or services, no matter how high the total price of an undivided single Bitcoin or Litecoin may become.
The maximum amount of Litecoin coins can give a psychological advantage over Bitcoin due to the lower LTC price per unit. Most people tend to buy Litecoin with PayPal because of its lower fees and fastest confirmation times.
While transactions are technically instantaneous on both Bitcoin and Litecoin networks, it takes time for other network members to confirm transactions. According to Blockchain.info, the average transaction confirmation time on the Bitcoin network is just over 10 minutes per transaction, although this figure can increase dramatically with high traffic.
The equivalent figure for Litecoin is approximately 2.5 minutes. Basically, this difference in confirmation times could make Litecoin more attractive to companies.
By far the most fundamental technical difference between BTC and LTC is the different cryptographic algorithms they use. Bitcoin uses the long-standing SHA-256 algorithm, while Litecoin uses a relatively new algorithm known as Scrypt.
The main practical significance of these various algorithms lies in their influence on the process of “mining” new coins. In both BTC and LTC, the process of confirming transactions requires significant computing power.