Some years back, the word ‘cryptocurrency’ wasn’t known, but at the moment, there are over 1500 of them in the market. There are two ‘big’ cryptocurrencies today: Litecoin and Bitcoin. Both of them have had a great share of success and they are almost the same.
Litecoin is often referred to as silver, while Bitcoin is often referred to as gold, but there are vital questions that come to the mind between these two: which of them is better than the other? Is it great investing in Bitcoin or Litecoin?
A Brief History of Bitcoin
Cryptocurrency was created through an anonymous programmer, Satoshi Nakamoto through a white paper which was titled Bitcoin: A peer-to-peer Electronic Cash System. Bitcoin came and made people rich; it also gave people an easier and faster means to send funds without the use of financial institutions.
In 2011, Bitcoin became known and at that time, 1 BTC was worth 31 USD. Now it is worth way more than that ($7,075 at the time of press).
The creator of Litecoin coin, Charlie Lee, tabled a way to make Bitcoin better and efficient, but his plans caused a misunderstanding between him and Bitcoin investors.
On November 7th, 2011, the misunderstanding caused a Fork and Litecoin was produced. Litecoin was produced to be a better version of Bitcoin and to offer more in terms of scalability and speed. As it’s a fork of Bitcoin, Litecoin works on the same principle as Bitcoin.
The Differences between Litecoin and Bitcoin
In terms of technology, Litecoin takes the lead over Bitcoin. It is important to know that the technology behind Bitcoin is blockchain. A blockchain is a group of a network where transactions are recorded; when they are recorded, there are kept in nodes.
Blockchain enables investors to send money without going to any financial institution, and much faster than traditional ways. If a certain amount of BTC is sent to another person, the nodes need to verify it, once the verification is done, the nodes get rewarded – this is called Mining in cryptocurrency.
It is also important to note that before a certain amount of BTC can be mined, a lot of power/electricity is needed. BTC mining is not fast and efficient. This was one of the reasons why Charlie Lee decided to change the BTC Mining Rules (SHA-256), and therefore, create Litecoin with an efficient Mining Rule (Script).
When a user mines with Script, a speedy mining is assured with a less power usage. It can sometimes take 107 minutes before a transaction can be verified on Bitcoin; whereas, it only takes 2.5 minutes on Litecoin.
The cost of each transaction done on any crypto coin is a vital feature. The cost of transactions on Bitcoin has become a problem for its users and this is where Litecoin comes in.
At the moment, Litecoin charges approximately $0.18 for every transaction made on its network; whereas, Bitcoin charges about $4.6 per transaction. The transaction cost of Bitcoin is very expensive and it is a disadvantage probably when smaller transactions need to be actualized by a user. Imagine paying a sum of $5 as the transactional cost for buying a drink of $10.
I have noted earlier that one of the big differences between Litecoin and Bitcoin is the way they are mined as you need a powerful computer to do so.
Lots of Bitcoin users today use a distinct type of computer known as ASIC Miners to mine bitcoin. These ASIC Miners are specially made for this purpose – now imagine, if you want to make a few bucks by mining BTC, then you need to get an ASIC miner; also keep in mind that mining BTC is not good for the ecosystem as it consumes a lot of power.
Litecoin can be mined using any type of computer, and as said earlier, mining LTC doesn’t take much power as Bitcoin does.
- Total Token Supply
Another interesting aspect is knowing the number of tokens that was produced and circulated by a cryptocurrency. For traders, the total token supplied by a cryptocurrency will represent the scarcity of the token when its maximum amount has been circulated.
Moving forward, it is necessary to know that Bitcoin is low when it comes to the tokens supplied. There are about 17 million Bitcoins in circulation. On the other hand, Litecoin has more of its coins circulated in the crypto sphere – about 55 million tokens.
It is important to know that Litecoin has a capitalization of 84 million tokens and Bitcoin 21 million. This is to say that about 81 percent of BTC has been produced, while 65 percent of LTC is in circulation.
The reason for a mass token circulation by Litecoin is to avoid scalability problems, which is a common problem for Bitcoin.
Who Wins? Bitcoin or Litecoin?
Well, both of them are well-known and they solve the money issues that the world is facing today. And obviously, Bitcoin is the real big fish. But considering the things discussed in this article, Litecoin looks better.
There are lots of cryptocurrencies in the market at the moment, but most investors go for Bitcoin because of its momentum, liquidity, and the number of users it has (the adoption).
Image Courtesy of Pixabay.