What is Litecoin and How is it Different From Bitcoin?
Would you like to learn more about Litecoin and how it is different from Bitcoin because this might be useful for you to take advantage of this coin's technology?
Public interest in crypto has greatly increased over the past years. Bitcoin is the crypto that has been able to amass a huge share of the interest and at present, it is the most popular crypto.
In cryptocurrency, Bitcoin is the dominant name. Even with that fact, it is important to understand and appreciate another fact that there are over 1,000 more altcoins that exist.
Among these numerous altcoins, one that has increasingly been garnering interest is Litecoin, but how different is Litecoin from Bitcoin?
What is Litecoin and How is it Different From Bitcoin?
From the outside, the altcoin Litecoin and Bitcoin have a lot in common. One common feature that they share is that both Bitcoin and Litecoin are cryptocurrencies.
For value and legitimacy, Litecoin and Bitcoin only rely on the network cryptographic integrity, unlike state currencies that heavily rely on both legal and political mechanisms.
Apart from the difference between state currencies and cryptocurrencies, Litecoin and Bitcoin also differ in various respects. The differences are subsequently highlighted below.
The code employed for creating Bitcoin was made available to the public by Satoshi Nakamoto, the mysterious creator. While Litecoin was originally based on the open source code used to create Bitcoin, Litecoin and Bitcoin transfers are recorded on blockchains that are entirely separate.
This means effectively that these are different crypto.
Litecoin transaction speed
One of those inherent Bitcoin problems is the slow speeds for confirming transactions. When Bitcoin was launched in 2009, it used to take about 10 minutes to complete a transaction.
With further growth of the Bitcoin blockchain and network, at present, transactions confirmation time is around 30 minutes and sometimes even over 24 hours.
For Litecoin, it takes only about 2.5 minutes on average to confirm a transaction. The difference in confirmation time means that merchants could be more attracted to Litecoin.
For example, if a merchant is selling a particular product in the Bitcoin exchange, it means they will have to wait for nearly 4 times the time it would take to confirm the transaction of the same product sold in the Litcoin exchange.
The advantage that Litecoin holds in terms of faster transaction confirmation though is under threat by the introduction of recent innovations. One such innovation is BitPay, which proposes an Inter-Channel Payments system nicknamed the “Impulse.” This kind of system makes instantaneous transactions more secure.
Another problem that Litecoin was created to solve is the "hash rate arms mining." Crypto mining is simply a process by which there is a creation of new Litecoins and Bitcoins, and it involves the use of computer processing power for the purpose of executing or running powerful and complex algorithms. New blocks are then created on the blockchain.
Once Bitcoin trading for state currencies started, Bitcoin mining evolved into a mining arms race. Miners employed the use of processing power of increasing amounts for the purpose of creating coins in a manner that is much quicker.
Therefore, the mining of Bitcoin has increasingly become out of reach for the everyday user.
Litecoin mining is not based on the Bitcoin’s SHA256 algorithm, but on Scrypt algorithm. With the Scrypt algorithm, simply increasing the processing power amount does not accelerate the mining process. The mining design of Litecoin ensures that the supply of coins increases at a rate that is steadier.
Another difference between Bitcoin and Litecoin exists in terms of the total coin amounts. While Litecoin is able to accommodate coins of up to 84 million, Bitcoin is not able to exceed 21 million coins.
While this difference may sound like an advantage that Litecoin holds over Bitcoin, its effect in the real world is negligible. The reason is that Litecoin and Bitcoin are divisible in extremely small amounts.
Because of that, a user of the two cryptocurrencies should experience no difficulty when purchasing goods or services that are low-priced. That is notwithstanding of how high an undivided single Litecoin or Bitcoin general price may become.
In conclusion, proponents of Litecoin often use the analogy that if Bitcoin is Gold, then Litecoin is silver to show how the cryptocurrencies differentiate and relate.
While this analogy is appropriate, it is essential to understand that Litecoin and Bitcoin are not precious metals.
Litecoin and Bitcoin are simply computer applications employing the use of different methods for the purpose of enabling digital currencies transactions.
Moreover, gold and silver have been around for ages while cryptocurrencies are still a relatively new phenomenon. The supply and demand mechanisms of Litecoin and Bitcoin are much less well understood.
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