Difference Between Litecoin and Bitcoin

In this guide, we will outline the differences between Bitcoin and Litecoin.

In this guide, we will outline the differences between Bitcoin and Litecoin. You will become aware of the technical differences, project specifics, as well as investment potential of the two cryptocoins as an asset class. You will be better informed to make a choice in building a holding of cryptocoins to spend or keep.

Litecoin vs. Bitcoin - Why You Need to Diversify

In the cryptocurrency world, it is already common knowledge that Bitcoin serves as digital gold and Litecoin is its counterpart, digital silver.

Both coins track each other in popularity and seem tied together.

Both coins do resemble precious metals as an asset class. They are both non-inflationary, rely on scarcity and require the digital equivalent of effort- proof of work by solving a mathematical task. The creator of Litecoin, Charles Lee, has mentioned several times that "digital silver" is partially a marketing positioning of his cryptocoin, which somehow stuck with the community.

Litecoin and Bitcoin share similarities, in that Litecoin was a branch of the open source code of Bitcoin shared on GitHub. Changes to the code made Litecoin faster, as new blocks were added to the network every 2.5 minutes instead of every 10 minutes. Also, there is the possibility of having four more times Litecoin than Bitcoin. Both coins have a capped amount of the total coins that can be calculated and created.

Charles Lee is a well-known person and speaker acting as a community figurehead and perhaps opinion leader for Litecoin. Recently, he moved on from Coinbase and released a Roadmap for 2017 with several technological changes to Litecoin.

At the same time, no one really knows the creator of Bitcoin, Satoshi Nakamoto, and there are doubts that he is even a real person. Beyond the Bitcoin White Paper released in 2009, there are no opinions or guidance from Satoshi Nakamoto, and there are splits in the community around SegWit adoption and the best way to improve on the network.

Investing in Litecoin vs. Bitcoin

Bitcoin currently poses a greater barrier to entry with a price around $2,000. Litecoin spiked to $50 and briefly fell, but remains a more accessible way to buy and use cryptocurrencies. Bitcoin dwarfs the market capitalization of Litecoin, with $38 billion vs. $2.3 billion.

  Bitcoin Litecoin
Market capitalization $38,660,964,615 $2,378,980,118
Current price (14.07.2017) $2350.60 $45.76
Coins calculated from total 15.2 of 21 million 51,985,032 of 84 million

 

The market prices of both Litecoin and Bitcoin have gone through peaks and lows. Both coins went through a spike and fall around the beginning of 2013.

[caption id="attachment_143" align="alignnone" width="1076"] source: coinmarketcap.com[/caption]

For Bitcoin, investors predict dramatic price rises. Some analysts expect the currency to top $5,000 if interest remains robust.

For Litecoin, there are also predictions that the price may rise to new peaks, but so far Litecoin remains in the shadow of other trending cryptocurrencies.

[caption id="attachment_144" align="alignnone" width="1079"] source: coinmarketcap.com[/caption]

Bitcoin also remains central in accessing altcoins. It is easier to go through Bitcoin and exchange it for other cryptocurrencies. Trading Bitcoins is still the usual pathway, while Litecoin remains underused.

Then there is the psychological price difference, as Bitcoin needs to be spent in subdivisions to achieve small purchases.

Litecoin stands out also among the other leading coins that garner the most interest since the spring of 2017:

Currency Price (as of July 2017) Units Available 24 Hour Trading Volume (as of July 2017)
Bitcoin $2034.34 16,452,650 $1.2 billion
Litecoin $41.81 52,030,007 $318 million
Ethereum $173.81 93,345,936 $1.6 billion
Dash $143.38 7,431,388 $38 million

 

Future of Bitcoin

According to experts, Bitcoin is here to stay, based on tradition, scarcity and a robust decentralized network. There are current concerns about the speed of transactions, and the adoption of SegWit is still under discussion. The proposed adoption of SegWit at the end of July 2017 would test the community and check if transactions under the new rule would be approved. Miner approval of technological additions is not mandatory, and all depends on consensus and support, as not all newly created Bitcoins have the same pedigree and there may be problems in keeping the blockchain together. User agreement and approval is a current source of strain in the Bitcoin community.

Bitcoin has active communities behind it, as well as merchants, educators, and investors. The greater barrier to entry still does not prevent volatility.

For more information on the statistics of Bitcoin activity, users should turn to the resources of blockchain.info.

Future of Litecoin

Litecoin plans to attract dedicated programmers tasked with improving and popularizing the service around the cryptocoin. A new version of the Litecoin Core is expected by the end of the year, according to the 2017 road map listed on Litecoin.org.

Litecoin users have agreed to apply the SegWit technology for faster transactions, and there is much enthusiasm for the Lightning Network, a feature designed to decrease even further the time for international payments.

For network and transaction statistics, block explorer resources at https://live.blockcypher.com/ltc/ will give more information on the activity.

Technological Differences of Litecoin vs. Bitcoin

The most significant algorithmic difference between Litecoin and Bitcoin is how the proof of work is calculated. Bitcoin uses the SHA-256 hashing algorithm, and Litecoin is a Scrypt-based cryptocurrency. Encryption algorithms mean different challenges for miners as there are different requirements for processing the hashing calculations. For builders of ASIC machines and farms, both coins present different challenges and sometimes hardware is not compatible for profitable mining. The Scrypt algorithm also makes it more difficult for ASIC setups to mine Litecoins.

Litecoin and Bitcoin Communities

There are no clear data for cryptocoin usage. Still, Litecoin is available and well-adopted in Europe. Bitcoin remains international, with robust support and user base in Australia. Asia remains a separate market, with much speculative demand and an interest in Dogecoin.

Litecoin is widely available on most exchanges, but the European Union regulations allow for rather smooth transactions. The BitPanda exchange, often used by Europeans, even partnered with the Austrian post offices to offer bundles of Litecoin purchased for cash. The other options include the newly distributed 3D security cards, which allow a direct purchase.

Litecoin Wallet vs. Bitcoin Wallet

The wider adoption of Bitcoin means a more convenient choice of wallets. For Litecoin, the most recommended approach is to take the Litecoin Core. For new users, this may mean waiting a few hours to synchronize with more than 5 years in transactions for the whole blockchain. The process takes a few hours. But for the entire Bitcoin network, the process would take days and may never complete. So the choice is to run incomplete wallets, choosing the best according to security and privacy preferences.

But wallet producers are catching on, as Trezor wallet has been offering Litecoin hardware wallets for a few weeks now.

Choosing a cryptocoin will always contain a smaller or larger amount of risk. It is best to stay away from trading or investing in cryptocurrencies, unless you are able to afford the losses.