Bitcoin has faced growing competition from newer cryptocurrencies, one of which is litecoin. Bitcoin was first introduced around 2008 in a paper by Japanese Satoshi Nakamoto and rose to fame for the next few years while litecoin was launched in 2011.
According to its creators, litecoin could act as a secondary cryptocurrency to bitcoin, just as silver is a lower kind of precious metal compared to gold. As of this writing, litecoin has a market capitalization of around $75 million and is actually proving to be a rival of bitcoin, which is currently holding a market size of $4 billion.
What’s the Difference Between Bitcoin and Litecoin?
Since both are cryptocurrencies, bitcoin and litecoin share a lot of similarities. These lack a governing body that oversees operations and transactions, making them decentralized in nature. In addition, these digital currencies are often adopted by online merchants in order to incur lower transactions costs on payments.
One factor that makes litecoin lower in value compared to bitcoin is that there are only a total of 21 million bitcoins available while litecoin can reach up to 84 million based on its mining algorithms. Since these digital currencies are controlled by governments or central banks, the market factors of supply and demand are the ones determining their value.
With this, some analysts believe that litecoin can offer a psychological advantage to bitcoin, as consumers often prefer to have transactions in whole units instead of fractions. Litecoin also enjoys a faster speed of transaction compared to bitcoin, as the former takes only 2.5 minutes while the latter needs 9 minutes.
Bitcoin or Litecoin?
At the end of the day, the main difference lies in the mining algorithm for each cryptocurrency. Bitcoin makes use of the longstanding SHA-256 algorithm, whereas Litecoin makes use of a comparatively new algorithm known as Scrypt. This has significant implications on the computing power needed to mine the altcoins and the security associated per unit, making bitcoin the more superior alternative in this regard.
