Bitcoin Vs. Litecoin
It’s safe to say that Bitcoin is one of the most popular cryptocurrency right now. Initially, only a small group of supporters have shown interest in Bitcoin, but in 2021 there are approximately 67 million owners of BTC in Europe and America.
But, this number will likely increase in the future as the price of Bitcoin continues to break new records. Furthermore, the introduction of Bitcoin as a digital cryptocurrency and blockchain technology has made it possible for cryptocurrencies to enter the market.
Actually, today there are more than 2,000 digital cryptocurrencies. Although Bitcoin is still by far the most the largest cryptocurrency by market capitalization, here we explain similarities and differences between Bitcoin another well-known cryptocurrency – Litecoin.
What is Bitcoin
Satoshi Nakamoto is the mysterious creator of Bitcoin that was launched in 2009. The decentralized digital cryptocurrency is used for fast, anonymous transactions over the blockchain network. The blockchain network is actually the reason why Bitcoin is the first-ever successful digital cryptocurrency, and it is also a foundational technology of every other cryptocurrency. All in all, blockchain technology is a great introduction to cryptocurrency in general.
Another important component of the Bitcoin ecosystem is Bitcoin mining. The miners approve the transactions in the network, and through the mining process, they discover new BTC. Moreover, Satoshi Nakamoto has limited the number of BTC that will ever exist to 21 million.
What is Litecoin
Litecoin was created not long after Bitcoin, in 2011 by Charlie Lee. Litecoin is also a peer-to-peer cryptocurrency, and it currently has 100,000 users, which is a significantly lower number than the number of Bitcoin supporters.
The main purpose of Litecoin, according to its creator, was to create a ‘lite version’ of Bitcoin. Hence there are actually a lot of similarities between the two. Lee has also restricted the number of Litecoins to 84 million.
In addition, Litecoin is also based on the “proof of work” algorithm in its blockchain system, which means the miners get a reward for approving truncations in the network by solving complex computational puzzles.
When it comes to storage options of your Litecoins or BTC, you need to invest in a secure wallet and cold storage facility. Furthermore, users can also obtain BTC or Litecoin on trading platforms or via mining.
Differences Between Litecoin and Bitcoin
Of course, there are important differences between the two currencies. First, Litecoin transactions are processed over a shorter period of time. In fact, one of the goals of Charlie Lee was to increase the processing speed of the transactions. Otherwise, it takes about 10 minutes for BTC transactions to be processed on the network. In contrast, it takes 2.5 minutes for Litecoin transactions to be verified.
Next, there is a difference in the cryptographic algorithm that they use, which makes Litecoin mining more accessible to individual users with personal computers. The Litecoin uses algorithm Scrypt, while Bitcoin’s uses the SHA-256 algorithm. To be successful in BTC mining, you need to have a powerful computer system.
But, as Bitcoin having reduced the block reward miners get and mining is getting more competitive, it is unprofitable to mine on desktop computers and on your own. Lastly, Bitcoin surpasses Litecoin in terms of its price (it hit $30,000 in January) and market capitalization of $734 billion.