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Litecoin vs. Bitcoin

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Bitcoin and Litecoin are two of the oldest cryptocurrencies, with the former starting in 2009 and the latter following closely behind in 2011. Litecoin was introduced as the “light version of Bitcoin” by Charlie Lee, a former Google developer.

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Cryptocurrencies are becoming a serious trading and investment option for many people. Although Bitcoin continues to steal the show, Litecoin is still one the most valuable cryptocurrency in terms of market capitalization.

If you want to buy Litecoin, you may doubt if it’s worth it. Maybe it’s better to go for Bitcoin, after all. In this article, we will elaborate on what both cryptocurrencies have in common and how one differs from another.

Common Features Between Bitcoin and Litecoin

Litecoin shares many characteristics with Bitcoin, including:

●       Purchase and Storage

The ease with which Bitcoin and Litecoin can be transferred is one of the main reasons crypto investors prefer them to other cryptocurrencies. Both coins may be purchased and stored on exchanges. Other commonalities include the need for a cold wallet, pricing, regulations, and so on. The mining processes are also rather simple.

●       Proof of Work

Both Bitcoin and Litecoin use Work Proof (PoW), a common mechanism for adding blocks to the blockchain. Cryptocurrency miners use a hash algorithm to solve difficult arithmetic puzzles to establish a consensus through their networks and earn block rewards.

Bitcoin vs. Litecoin: What’s The Distinction?

Although Bitcoin and Litecoin are alike in certain ways, they are distinct cryptocurrencies with their own set of characteristics. Here’s what distinguishes them:

Speed of Transactions

One of the most notable distinctions between the two cryptocurrencies is that Litecoin takes 2.5 minutes to construct a block of transactions, whereas Bitcoin takes 10 minutes. This indicates that Litecoin is four times faster than Bitcoin at confirming transactions.

Because of the disparity in transaction times, Litecoin is typically seen as a coin for day-to-day use, whereas Bitcoin is now regarded as a financial asset. It is conceivable that home computers can mine Litecoin, while Bitcoin requires a specialized computer.

Mining Algorithms

Another important distinction between Litecoin and Bitcoin is its mining algorithm. While they are both proofs of work, Bitcoin employs the SHA-256 hashing method. Litecoin uses a relatively new algorithm – Scrypt, which requires less computational power, allowing even ordinary users to engage in mining.

Block Rewards and Coin Limits

Bitcoin has a total limitation of 21 million coins, while Litecoin – 84 million. No more coins will be generated after these limits are reached. These incentives have been decreased to generate scarcity by restricting the number of new coins sent into circulation. For every 210,000 blocks, Bitcoin block rewards are halved, while for every 840,000 blocks, Litecoin block rewards are halved.

Transaction Capacity

Litecoin has a maximum transaction throughput of 56 transactions per second, while Bitcoin only has a maximum transaction capacity of roughly seven transactions per second.

Transaction Costs

The transaction costs are also another issue where Litecoin performs better than Bitcoin. Litecoin owners pay roughly $0.03 or $.04 in transaction fees. In comparison, the average transaction price for Bitcoin is $7.60. Litecoin has cheaper fees because the network sets away LTC that does not come from transaction fees to reward miners.

As you can see, each has its pros and cons. So, the choice of which one to invest in is bound to your purposes.

 

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