Bitcoin vs Litecoin

Overview

Litecoin (LTC) was among the first generation of cryptocurrencies, along with ether and XRP, that came out hot in the heels of Bitcoin after it was released back in 2009. This was not surprising considering that Litecoin was copied from the Bitcoin source code.

In October 2011, Charlie Lee, a former Google engineer, launched Litecoin as a “silver to Bitcoin’s gold” – that is, to complement what Bitcoin is designed to do in a faster, cheaper, and more scalable way.

According to Lee, Litecoin came about as a “fun” side project when he was playing around with the Bitcoin codebase in an attempt to create a fork of Bitcoin. 

In a nutshell, Litecoin is a decentralized, peer-to-peer digital currency that enables affordable and instant payments to anyone in the world. 

As an open-source global payment network, Litecoin is fully decentralized, which means that there are no central authorities controlling it. 

While many may see Litecoin as a competitor to Bitcoin due to the similarities of its core functions and features, it bears stressing that Litecoin’s creator has never intended that to be the case.

In fact, Litecoin has been used as a test net or testing ground for improvements that would later be applied to Bitcoin due to their similar structure.

Bitcoin vs Litecoin at a Glance

Differences Between Bitcoin and Litecoin

Cheaper and Faster Transactions

While both Bitcoin and Litecoin are decentralized cryptocurrencies powered by blockchain and created to support peer-to-peer (P2P) transactions, one of the main differences that set Litecoin apart is that it is designed to be used for everyday transactions in a significantly cheaper and faster way than Bitcoin. 

For this reason, Litecoin has a maximum capacity of 56 transactions per second, with users expected to pay around $0.03 to $0.4 on average in transaction fees. Meanwhile, Bitcoin’s maximum capacity is currently at seven transactions per second, with users paying $7.60 on average in transaction fees.

When it comes to average transaction time, Bitcoin is expected to completely process a transaction in 10 minutes, while Litecoin is expected to do the same in 2.5 minutes.  

Same Mechanism, Different Algorithm

Bitcoin and Litecoin both use a proof-of-work consensus mechanism to verify transactions and add new blocks to the blockchain. However, each uses a different algorithm behind this mechanism, with Bitcoin using SHA-256, while Litecoin uses Scrypt.

SHA-256 offers slower turnaround times, which is measured in minutes instead of seconds. It is considered that data blocks processed using SHA-256 are almost free of errors and best for data protection.

On the other hand, Scrypt is a faster and easier algorithm compared to SHA-256, can run on an available CPU, and requires less energy. 

Mining, Halving, and Rewards

It is estimated that the last Bitcoin and Litecoin will be mined in the year 2100. By this time, Bitcoin’s supply limit of 21 million and Litecoin’s 84 million will both be reached. 

Before that happens, both networks will first go through several halving events where the rewards for mining blocks will be halved. These events occur at regular intervals – every 210,000 blocks for Bitcoin and every 840,000 blocks for Litecoin.

As of writing, the mining reward for Bitcoin is 6.25 BTC, while the mining reward for Litecoin is 12.5 LTC. 

Conclusion

While Bitcoin has maintained the top spot ever since it first came out, the same could not be said for Litecoin as it ricochets within the Top 20, with more and more cryptocurrencies saturating the market. But if there’s one thing that can be said of Litecoin, it’s that as one of the veteran cryptocurrencies to still exist today, it has stood the test of time and is worth checking out.

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