Litecoin vs Bitcoin
Litecoin and Bitcoin. Which currency is the best? Since the introduction of Litecoin in 2011, every qualified economist has felt it his duty to compare the two popular coins.
The experts not only discussed the individual characteristics of the coins and their advantages over each other, but also entered into a complex debate, discussing what developers need to do to make their currencies successful.
Bitcoin Is the central site of the crypto community. Litecoin it attracted those who are not satisfied with some aspects of the most popular currency, but who believe in the bright future of crypto money.
Although both Bitcoin and Litecoin have minor technical differences, their goal is the same: transferring value using cryptographic principles. But when the coins met face to face, it is clear that Bitcoin came out the winner.
Litecoin vs Bitcoin: at a glance
We can compare cryptocurrencies from different angles, but the most obvious indicator is their market capitalization, that is, the total amount of currency on the market (usually in US dollars). Bitcoin currently occupies first place with capitalization more than 56 billion dollars, a Litecoin takes fifth place with $ 2.56 billion.
Bitcoin is the standard cryptocurrency preferred by most users and platforms. You might be thinking, “ So why are we talking about Litecoin? Its market cap is a bite-size pie versus $ 45 billion bitcoin.”. But this is one of the few altcoins with an active user base and legal rights.
Functions common to Litecoin and Bitcoin: an online payment system that uses cryptocurrency instead of national currency, for example, instead of dollars. Bitcoin and Litecoin transact with BTC and LTC, respectively. As cryptocurrencies, they have created the same community and rely on similar cryptographic principles.
Bitcoin was released in 2009 and became the first cryptocurrency. Litecoin emerged just two years later, in 2011, but has since done its best to catch up with Bitcoin.
Litecoin developers stated that their goal was to develop "Silver" for Bitcoin - "gold"... While the technology of the currency is arguably better than Bitcoin, it came later.
Litecoin vs Bitcoin: deep analysis
Both currencies may appear to be almost the same, but in reality they differ greatly in their views on the market and on technical capabilities.
In the next four paragraphs, we'll cover what makes each coin special. You will understand how much more advanced Litecoin algorithm will always be an outsider due to the all-encompassing Bitcoin network.
1) Bitcoin is much more popular
With a market capitalization of about 22.5 times that of Litecoin Bitcoin's popularity makes it the obvious choice for the investment community.
According to Google Trends, Litecoin is unlikely to match Bitcoin's prominence. At the same time, the demand for Bitcoin has skyrocketed in the last 2 years, while Litecoin has been holding on exactly all these years.
Since cryptocurrencies are considered to be inherently risky investments, Bitcoin seems to be relatively stable against their background due to the extremely high market capitalization. Of course, its price remains incredibly volatile.
In comparison, a $ 1 billion loss would halve Litecoin's market capitalization, while Bitcoin would need a $ 40 billion recession to do so - in which case the events would be just as catastrophic.
Despite all this, Litecoin is still quite in demand in the community.
2) Litecoin holds more coins
Many traders take into account the total number of coins programmed into the cryptocurrency. Bitcoin is capped at 21 million coins, while Litecoin has 84 million.
Both currencies still have a long way to go before they hit their margins, but this remains a problem due to the expected price volatility as the coins hit their highs.
Currently Bitcoin has about 16.5 million coins and at Litecoin about them 52 million... This means that the amount of BTC is equal to 78% of its maximum value, while Litecoin is about 61%. If Bitcoin is getting closer to the bottom line, then Litecoin could get more investment from traders trying to avoid the volatility of the popular currency.
However, these advantages of Litecoin are largely relative: both Bitcoin and Litecoin can be divided into fractions, so the maximum number of coins should not affect the value of any currency.
For example, upon reaching the maximum, Bitcoin users will only be able to transfer 0.00000001 BTC. The possibility of placing more coins in this case will become impossible.
3) Litecoin has faster transaction processing
Bitcoin became king thanks to its network
While Litecoin's efforts to make mining accessible to everyone is a good start and received a positive response from the community, it still limited itself to its niche.
Rather than creating a huge community of people by networking them to fight Bitcoin, Litecoin has focused on minor differentiators. The currency essentially functions the same way as Bitcoin and does not offer anything that would make people move away from Bitcoin.
It is safe to say that most crypto traders who create that very capitalization do not put technical advantages over profits. In terms of price, Litecoin is no different from other altcoins. Less enlightened users hardly know what the mining process is, let alone the difference between SHA-256 and Scrypt.
So while the value of Litecoin has increased significantly over the past few months, the currency is simply not as attractive as Bitcoin.
Litecoin suffered another defeat when Ethereum took off in early 2017, knocking LTC down to fourth position. Within a short period of time, Ethereum received a market capitalization of 10 times that of Litecoin.
Outcomes
Since Litecoin's original goal is to become a “silver” currency relative to Bitcoin “gold,” it really isn't clear if anyone needs such a coin.
Litecoin has a technically superior algorithm, but that doesn't matter as the popularity of Bitcoin has established it as the gold standard for old and new crypto traders.
When it comes to cryptocurrency choices, Bitcoin and Litecoin are in the same boat. Think of it this way: both currencies are good guys. But Bitcoin is the protagonist and Litecoin is the minor actor. Bitcoin - Goku, Aragon and Batman. Litecoin - Vegeta, Boromir and Harvey Dent. After all, Bitcoin is likely to be in every sequel and Litecoin will be killed for lack of popularity.
In the cryptocurrency community, it is important extensive user network... No matter how much Harvey Dent - Altcoin tries to get better, even his technical superiority does not help overcome the popularity of Bitcoin's Batman.
In addition, the liquidity of Bitcoin must not be forgotten. The fact that cryptocurrencies are generally highly volatile scares many users. Most beginners start with Bitcoin because it guarantees stability and entry into a large market.
The network effect ultimately determines which coins survive. The more users buy Bitcoin, the less in demand Litecoin becomes. The relevance of Litecoin is a topic of discussion, and its recent rise is due to the increased popularity of cryptocurrencies in general.
It is interesting to simulate situations in which Litecoin was able to overtake Bitcoin. Litecoin proponents cling to the fact that their currency is one of the only high exchange cost alternatives.
If Bitcoin suddenly becomes unclaimed due to some problem, for example, upon reaching the coin limit, people can switch to Litecoin. However, the fall of Bitcoin - the flagship of the cryptocurrency world - could mean the end of the entire market as a whole.
New types of cryptocurrencies appear today like mushrooms after rain. However, as with any market, there are always sharks and fry. In the cryptocurrency market, such sharks can be called Bitcoin, Ether and Litecoin. In this article, we will try to compare these currencies.
Bitcoin was the first.
Since its release in 2009, Bitcoin has become the most famous and most valuable cryptocurrency. But this is not the only major market participant.
Another prominent representative of the cryptocurrency market is Litecoin, which came into play in 2011. Litecoin was created by Charles Lee, who helped found Coinbase, the leading cryptocurrency exchange. Litecoin is based on the same code as Bitcoin, but with some changes, such as increased transaction speed.
In 2015, Ethereum enters the market with its own "chips", including the ability to process small pieces of code (smart contracts) and a virtual peer-to-peer network.
The fact that with the help of Coinbase it was possible to exchange, and, as well, allowed these cryptocurrencies to become the most recognizable and well capitalized. The top ten cryptocurrencies also include Cardano, NEM, Stellar, IOTA and Tron.
As of January 23, 2018, the capitalization of the TOP-6 cryptocurrencies is approximately $ 400 billion.
Litecoin 101
Litecoin is closely related to Bitcoin, as they are built on the same basic code, but with some differences. The main difference is that Litecoin is mined using the Scrypt algorithm, which is embedded in mathematical calculations. They are simpler than those used in the SHA-256 algorithm for Bitcoin mining. As a result, unlike bitcoins, you can start mining Litecoin using a laptop or PC, especially if they come with a powerful graphics card. Mining bitcoin requires much more powerful resources.
And since Scrypt is less mathematically complex than SHA-256, Litecoin is mined much faster than Bitcoin. A Litecoin block takes only 2.5 minutes of hash, compared to 10 minutes it takes to hash a Bitcoin block. That is, Litecoin transactions are processed and confirmed faster.
Ethereum
Like Litecoin, Ethereum is based on the same blockchain concept as Bitcoin. But Ethereum still has some differences. Funded since 2014 through an initial coin offering, Ethereum has seen a rapid takeoff. Launch was another success factor.
Investors who "consume" computing power pay for it with tokens (ether). Those who contribute to the processing power can earn it. In this case, buyers and sellers can simply trade ether.
Bitcoin mining can be compared to thousands of chefs racing feverishly to create a new, extremely complex dish, and only the first person to create the perfect dish wins. In Ethereum's "kitchen", miners act as the leaseholder of the restaurant, so Ether "chefs" can create new types of cuisine.
In fact, a group of companies created a non-profit organization dedicated to legitimizing Ethereum in order to further promote it as an open source platform, as well as develop and maintain those applications that run on it. Far from being startups, we're talking about big tech players like Intel, Microsoft, and financial giants (JP Morgan and Credit Suisse).
Which cryptocurrency is the most valuable
Bitcoin remains the most significant figure in the cryptocurrency market. After the boom in November 2017, its rate reached $ 20 thousand, but, a few weeks later, dropped to $ 15 thousand and then completely impoverished to $ 11 thousand (after the South Korean authorities announced a ban on cryptocurrency trading in the country) ... Litecoin, sometimes referred to as "silver", has followed Bitcoin's trend and is currently at $ 180. Despite the fact that all three cryptocurrencies have been "creeping" up over the past year, Ethereum has still charted its own path. Since June 2017, the ether rate continues to grow and today it is $ 1000.
Where to invest
If everything were so simple, the answer to this question would not require writing an entire article. So far, no one knows whether the cryptocurrency rate will grow, even in the short term. None of them are regulated yet, so the risk is very high here.
Bitcoin is the choice of the majority. If you are looking for a cryptocurrency with a famous name and high market capitalization, then Bitcoin is for you. But on the other hand, given the colossal growth of bitcoin over the past year (almost 1000%), now investors do not have to rely on a high level of income.
Litecoin is a choice that offers undeniable advantages, and above all, faster transactions. In short, Litecoin, like Bitcoin, is a promising investment option.
In Ethereum, you can create a decentralized autonomous organization based on a contract, which opens up unlimited possibilities. Moreover, tokens in Ethereum are not equated to shares, they give the right to vote. Like Bitcoin, Ethereum has spawned hundreds of other blockchain-based coins. Over the past year, the cryptocurrency has risen in price by 5000%.
Before investing in a particular cryptocurrency, do your own market research without relying solely on the opinion of experts or seasoned traders. After all, the cryptocurrency market is always accompanied by risk.
Specializing in forecasting the cryptocurrency market, today he shared with readers his vision of what prospects Litecoin and Bitcoin Cash have. The reason for this was the news that the Coinbase trading platform added support for the Bitcoin Cash cryptocurrency, which is positioned as a competitor to Litecoin. Under the influence of this event, over the past 24 hours, the value of Bitcoin Cash soared by 63% and reached $ 3875 at the time of publication. In turn, Litecoin, which recently demonstrated high growth, today decreased by 9% and is currently valued at $ 319. However, the expert Palwasha Saaim believes that these data are insufficient for long-term conclusions.
If Bitcoin Cash, which appeared in August this year as a result of the split of Bitcoin, became available for buying and selling on Coinbase only now, then Litecoin has been trading on this platform since May this year. But this is not the only advantage over Bitcoin Cash.
Both coins are marketed as alternatives to Bitcoin, but Litecoin is a more advanced digital currency. Its code uses the SegWit and Lightning Network updates to make the coin more scalable. Simply put, Litecoin charges lower fees and processes transactions much faster than Bitcoin itself and its recent clones.
It is this advantage that is key to predicting the development of Litecoin and Bitcoin Cash. It was in medieval times, when banks were few and far between, merchants were forced to pay substantial fees to move their money across borders. Nowadays, more than 2% of transactions are considered exorbitant.
The absurdity is that the modern world of digital currencies is still in the past. Imagine you are giving away almost half of your transaction. That such a scenario is a reality today is evidenced by the following tweet from a Bitcoin user.
Bitcoin's transaction costs are currently at an all-time high and settlement times are extremely slow. Bitcoin Cash is also of little help in solving these problems, as it only offered an increase in block size.
Similar to how Bitcoin is considered “digital gold”, Litecoin is marketed as “digital silver”. It is a "lightweight" coin that attracts investors with the possibility of mass adoption as a decentralized "medium of exchange", that is, money.
The only drawback so far is the lack of a well-thought-out marketing strategy to popularize the coin. But Litecoin founder Charlie Lee is already working on it. The number of people learning about Litecoin is increasing every day. While Lee believes it may take another five years for the average consumer to start using this digital currency for daily payments, Litecoin is nonetheless heading in the right direction.
The observed transfer of assets from Bitcoin to Bitcoin Cash in the market is part of the speculative game of traders. In turn, real investors will stick with the digital currency that can offer the best value in the long run. And between Litecoin and Bitcoin Cash, the choice must be made first.
Profit Confidential Prediction: Despite short-term drops, Litecoin's value in 2018 will be $ 400.
You can read more about the competing technologies for the development of digital coins in the article.
It is believed that the main competitor of bitcoin is ether, the second largest cryptocurrency in terms of capitalization. We will tell you why this is not so.
During this year, the total capitalization of the cryptocurrency market soared from $ 17.7 billion to over $ 300 billion (data as of November 30). In less than 11 months, the value of all virtual assets has grown by more than 1620%. For comparison, the American stock market, taking into account dividends, brought investors an average of 7% per year. In other words, stocks have given way to cryptoassets on all fronts and are far behind.
Bitcoin remains the undisputed leader among cryptocurrencies. In January, its cost did not exceed $ 970, now it has exceeded $ 10,000. With a current capitalization of $ 174 billion, Bitcoin is ahead of General Electric (NYSE:), one of the largest American companies on the Dow Jones Industrial Average.
Bitcoin's main competitor is not ether at all
Bitcoin is not alone in its pursuit of heights. CoinMarketCap.com lists 1,327 different cryptocurrencies. Many of them run on their own blockchains.
Blockchain is a digital, decentralized database of all transactions. It processes and records them without the intervention of intermediaries such as banks or credit unions. Low barriers to entry allow anyone with sufficient knowledge, time and money to create their own blockchain - the competition between virtual currencies is extremely high.
Ether (ETH / USD) is generally considered the main competitor to Bitcoin. It has the second largest capitalization and the best growth in 2017 than Bitcoin. In addition, the Ethereum blockchain is being tested in 200 different projects as part of the Enterprise Ethereum Alliance.
But the two cryptocurrency giants seem to have completely different missions. Ethereum developers intend to promote their blockchain for companies, somewhat ignoring its functions as a means of payment.
Meanwhile, bitcoin developers have focused exclusively on its purpose as a means of payment and only recently started attracting businesses to their blockchain. While both currencies compete to some extent, Bitcoin and Ether do not pose a direct threat to each other.
Meet Bitcoin's biggest rival
Instead, Bitcoin's main rival is Litecoin (LTC / USD). Currently, its capitalization is $ 4.8 billion and is second only to Bitcoin Gold, Ripple, Bitcoin Cash, Ether, Dash and Bitcoin.
In many ways, Bitcoin and Litecoin are very similar. Both have a limited number of coins, although the block calculation time for Litecoin is slightly shorter. As a result, payments in the Litecoin network are faster, but also less reward for miners. Plus, both currencies are much older than most peers. Bitcoin appeared in 2009, Litecoin was created in 2011. In other words, these are already mature currencies (so to speak).
But what really connects them is the desire to become a generally accepted means of payment. Five large companies have accepted Bitcoin payments since 2014, and many smaller merchants have joined since then.
In this sense, Litecoin is not so successful, but this is more due to the fact that its creator, Charles Lee, did not take an active part in the development of his brainchild for several years, and only recently returned to the ranks of developers. Online store Overstock.com became the first major retailer to accept Litecoin as payment. Over time, others joined in.
Litecoin definitely has potential. The long-awaited SegWit update was recently carried out, which was critical to improve blockchain throughput, shorten settlement times, and lower transaction processing costs. This should attract businesses and possibly investors.
However, Charlie Lee himself does not consider Litecoin to be the main competitor of Bitcoin. He is confident that both cryptocurrencies can successfully coexist and work for each other's good (although this remains to be seen).
Risk for all virtual currencies (including Bitcoin and Litecoin)
To some extent, all cryptocurrencies, including Bitcoin and Litecoin, share one significant risk - low barriers to entry.
No one disputes that blockchain will radically change the payment process for a number of industries. The question is, when will this happen and what blockchains will be used for this?
Investors are known for re-evaluating new ideas. Almost every emergence of disruptive technology, such as business-to-business over the Internet, genetic mapping, 3D printing, has been accompanied by bubbles. This is not to say that companies from these industries did not succeed in the long term, but this happened much more slowly than investors expected. The same can happen with blockchain.
In addition, there is a real danger that companies will choose not the blockchains of bitcoin, litecoin or ether, but some others. In the world of cryptocurrencies, competition is incredibly high and preferences change instantly.
Can Litecoin Challenge Bitcoin's Supremacy? Time will tell.
Prepared by Taya Aryanova
The number of cryptocurrencies is growing every year. Despite the fact that Bitcoin is the most famous and the first cryptocurrency to appear in the world, there are many others that compete with Bitcoin. They all have their own different functions and benefits. If you don't know yet, you can read our previous article about him.
Litecoin ( LTC).
Litecoin is a peer-to-peer digital currency that allows instant payments anywhere in the world.
Like all cryptocurrencies, Litecoin is an open source global payment network that is completely decentralized with no central authority involved.
Litecoin's creator, Charlie Lee, essentially copied Bitcoin, but changed several parameters. The Litecoin network aims to process a block in 2.5 minutes, rather than 10 minutes like Bitcoin, which, according to the developers, makes it possible to speed up the confirmation of the transaction. On the other hand, the disadvantage of faster block time is the increased size of the blockchain and the increase in the number of lost blocks. Litecoin is based on the Bitcoin protocol, but differs from it in that it can be efficiently mined using consumer-grade hardware.
Litecoin provides faster transaction confirmation (2.5 minutes on average) and uses a tough encryption-based data mining algorithm designed to work with common computers and GPUs that most users have. The Litecoin network plans to produce 84 million units of currency.
One of Litecoin's goals was to provide a data mining algorithm that could run concurrently on the same hardware that was used to mine Bitcoins. With the rise of specialized ASICs for Bitcoin mining, Litecoin continues to serve these purposes.
Differences between Litecoin and Bitcoin.
Litecoin offers the following main differences from Bitcoin, which, according to the developers, will make it better than Bitcoin.
1. The hashing algorithm scrypt in Litecoin, in contrast to the SHA-256 algorithm in Bitcoin.
2. The total number of Litecoin coins is 84 million, as opposed to 21 million BTC.
3. It takes 2.5 minutes to create a Litecoin block, which is 4 times less than Bitcoin.
4. The difficulty of creating a Litecoin block changes approximately every 3.5 days, while for Bitcoin - every 2 weeks.
The significant difference between Bitcoin and Litecoin is the hashing algorithm that everyone uses to solve a block, as well as the number of coins distributed each time a solution is found.
Litecoin uses the scrypt hashing algorithm, while Bitcoin uses the SHA-256 algorithm, which is considered relatively more complex. Using the scrypt algorithm allows Litecoin to interact faster with RAM. This speeds up mining significantly. Each block is processed on average in 2.5 minutes, while in Bitcoin it takes 4 times as long. This allows for faster digital currency generation.
The original purpose of using scrypt was to allow miners to mine both Bitcoin and Litecoin at the same time. The choice to use the scrypt algorithm was also partly to not give GPU, FPGA and ASIC players an advantage over CPU miners.
Due to Litecoin's use of the scrypt algorithm, the creation of FPGA and ASIC devices for Litecoin mining is more difficult and more expensive to manufacture than Bitcoin, which uses SHA-256.
It is mined similarly to Bitcoin. Litecoin also has a fixed supply and will end up with a total of 84 million coins in circulation, 4 times more than Bitcoin.
How to get Litecoin?
As mentioned above, Litecoin and Bitcoin use different algorithms for hashing. While Bitcoin uses SHA-256 (short for Secure Hash Algorithm 2), which is considered relatively more complex, Litecoin uses an algorithm that uses more RAM called scrypt.
Different algorithms mean different hardware and you need to be sure that your hardware meets the required requirements for Litecoin.
Initially, miners received 50 Litecoins per block, the amount of the reward is halved every 4 years (every 840,000 blocks). At the moment, you can get 25 Litecoins per block.
In the case of Bitcoin mining, you need a processor with an incredible amount of processing power that is usually not available to conventional computers. Litecoin uses an encryption algorithm that uses RAM, not CPU power.
With the increasing value of Bitcoin, miners are trying to get as much Bitcoin as possible and are creating a race for computing power. A person with a more powerful computer is much more likely to mine more Bitcoins than a miner using more traditional mining methods. This is all due to the hash cryptography that is used to mine Bitcoin.
Litecoin has an advantage here, as it requires more memory than processing power, and the need for more powerful processors is eliminated.
How to buy Litecoin?
If you want to get Litecoin, but are not interested in developing it, this cryptocurrency can be purchased using another cryptocurrency such as Bitcoin on specialized exchanges. Some of these exchanges or other exchange services such as , , , also allow you to purchase LTC with any fiat currency such as US dollars or Euros.
How are Litecoin transactions different?
Litecoin, due to its faster block creation, can handle more transactions than other cryptocurrencies such as Bitcoin. For example, Litecoin creates a block every 2.5 minutes, and the merchant will be able to complete 4 transactions in 10 minutes, while with Bitcoin, one transaction can be made in 10 minutes.
WalletsLitecoin.
Like Bitcoin and many other cryptocurrencies, Litecoin is usually stored in a digital wallet.
There are various types of wallets, including those based on software that reside on your computer or mobile device, hardware wallets, and online wallets that do not require software installation. Another secure, but admittedly outdated and somewhat complicated method of storing Litecoin is to create a paper wallet, which involves generating and printing a private key on a computer.
Each wallet has private keys required to accept and send coins to and from your Litecoin address.
These wallets exist as desktop or mobile software and are available for almost all popular operating systems and devices. Apart from third-party applications such as Exodus or Electrum-LTC, laptop and desktop users can also install Litecoin Core, which is a full-featured client created and updated by the Litecoin development team. Litecoin Core downloads the entire blockchain directly from the peer-to-peer network, avoiding the involvement of any middleman in the process.
The future of Litecoin.
Litecoin is considered a silver digital currency, while Bitcoin is considered a gold equivalent. Both are deflationary currencies, and it remains to be seen how the supply differential will affect value in the years to come. Litecoin has an ultimate limit of 84 million coins compared to 21 million bitcoins and how this will affect the final price is unknown. Currently, the cost of 1 Litecoin is roughly 0.01 Bitcoin, but Litecoin can still attract a lot of investment.
Although Litecoin's market cap pales in comparison to Bitcoin, Litecoin is still in the top 5 cryptocurrencies at time of publication. Although these ratings fluctuate depending on the price and the number of coins in circulation.
