Definition: Bitcoin is a cryptocurrency designed to allow people buy or sell Bitcoins using different…
Difference Between Litecoin and Bitcoin
What is Bitcoin?
Bitcoin is the world’s first cryptocurrency designed and launched by Satoshi Nakamoto in 2009. In fact, Bitcoin uses an open-source code that can be modified by anyone and freely used for other projects. For example, several Cryptocurrencies have launched with modified versions of the Bitcoin code and have succeeded.
What Is Litecoin?
Litecoin was launched in 2011 with a goal of being the ‘silver’ to Bitcoins ‘gold’. In fact, Litecoin has the highest market cap of any mined cryptocurrency after Bitcoin.
Differences Between Bitcoin And Litecoin:
- With Litecoin, end-users only take 2.5-minutes to generate a block while with Bitcoin it takes up to 10-minutes to generate a block thus making Litecoin faster in making transactions than Bitcoin. For example, a merchant who wants 2-confirmations would only need to wait 5-minutes with Litecoin while with Bitcoin they would have to wait 10 minutes for just 1-confirmation.
- Litecoin has a total-limit of 84 million coins while Bitcoin has total-limit of 21 million coins. Once these Cryptocurrencies reach the specified coin-limits, no newer currency is released into the system.
- Bitcoins are halved every 210,000 blocks while Litecoins are halved every 840,000 blocks. For example, Bitcoin-blocks are mined every 10-minutes which implies that about 144-blocks will be worked on per day on average and at this rate it would take approximately 4-years until the value of the reward would have again. In fact, today verifying a block is rewarded with 25-BTC and this implies that the next time halving occurs the reward will decrease to 12.5-coins.
- Bitcoin uses the SHA-256 hashing algorithm which involves calculations that can be greatly accelerated in parallel-processing which actually favors processing power to mine the cryptocurrency. Likewise, Litecoin uses the scrypt algorithm that incorporates the SHA-256 algorithm but its calculations are much more serialized than those of SHA-256 in Bitcoin. In fact, Scrypt favors large amounts of high-speed RAM rather than raw processing power alone.
- The total hashing rate of a Bitcoin-network is over 20,000 Terra-Hashes per second while for a Litecoin-network it is just 95,642 Mega-Hashes per second.
- Litecoin can handle a higher volume of transactions because of its faster block generation compared to Bitcoin which is slower and it would require significant updates to the code that everyone on the Bitcoin network is currently running to become faster.
- Litecoin blockchain are proportionately larger because of higher volume of blocks compared to Bitcoins’ more orphaned blocks.
- The faster block-time of Litecoin reduces the risk of double spending attacks compared to Bitcoin. However, this is theoretical in the case of both networks having the same hashing power.
- Bitcoin’s market capitalization sits at roughly $170 billion while Litecoin is just catching up. In fact, Bitcoin remains the most highly valued player in the cryptocurrency space.
- Litecoins’ greater number of maximum coins might offer a psychological advantage over Bitcoin. This is because some users may prefer transacting in whole units rather than in fractions of a unit which is a potential advantage for Litecoin. However, Bitcoin can solve this through simple software changes introduced at the level of the digital wallets through which Bitcoin transactions are made.