Bitcoin has been rapidly gaining popularity since 2009, but many other cryptocurrencies have been created since then. One example is Litecoin, which is a worthy competitor. Let’s find out which one is better.
What’s the Difference Between LTC and BTC?
Bitcoin is the first and the most popular cryptocurrency on the market. However, every new altcoin that appears on the market is trying to overperform BTC and offer unique features.
And although BTC has that first-ever-launched advantage, there are projects such as Litecoin (LTC) that try to improve on Bitcoin’s concept. LTC is similar to BTC in technical terms, but still, some key differences Litecoin has can be crucial for some investors. Which exact similarities and differences are there and which coin should you select for investments? Find out below.
How Bitcoin and Litecoin Are Similar
Since Litecoin was created based on Bitcoin’s protocol, the cryptocurrencies share some similarities.
Transactions and Storage
Fundamentally, transactions performed using Litecoin and Bitcoin are almost identical. Both BTC and LTC can be acquired through mining or trading on exchange platforms. The coins can be stored in any compatible cold or hot storage.
Proof of Work
As was mentioned, adding a new block to the blockchain is possible through the mining process. It means that miners solve different arithmetic problems to create new coins. Those who solve the puzzle first receive rewards. For example, mining one block of Bitcoin is worth a 6.25 BTC reward, and for one mined Litecoin you get 12.5 LTC.
However, every mined coin has to be confirmed and validated. The validation system of both Litecoin and Bitcoin is based on the Proof-of-Work method. This type of confirmation requires miners to approve the nodes within a transaction before it is recorded on the blockchain.
Although in a nutshell Bitcoin and Litecoin are similar, some crucial differences exist, especially when it comes to market capitalization, transaction cost, and speed. Check the main differences between BTC and LTC.
Different market capitalization is one of the most obvious differences between LTC and BTC. Bitcoin has the biggest market capitalization on the market (around $440 billion), while Litecoin has only $4 billion. Such a huge difference can be explained by the bigger popularity of Bitcoin compared to Litecoin.
A higher market capitalization of Bitcoin is also caused by the strictly limited amount of coins that can ever be mined. The maximum supply of BTC is 21 million, and around 91% of it is already in circulation. Meanwhile, the Litecoin network can never exceed 84 million coins, but 84% of it has already been created as of July 2022.
The circulation limits theoretically help decrease inflation that is usually caused by uncontrolled supply. Still, there is more space for new coins when it comes to LTC, which is a plus for miners.
The biggest and most important difference between BTC and LTC is the difference in transaction speed and cost. From the very beginning, Litecoin was designed as a coin that prioritizes high transaction speed. Hence, it takes around 2.5 minutes per transaction, while the block time of BTC is around 10 minutes.
Besides, the transaction fees are extremely low for LTC. Users are expected to pay around $0.03 per transaction. At the same time, a regular BTC to XMR transaction will cost you around $7.50.
Such differences in terms of transaction speed and cost completely suit the doctrine of Litecoin’s founder Charlie Lee, who wanted to create a lighter version of Bitcoin. Because of the fast and cost-effective transactions LTC facilitates, it is suitable for daily payments and trading. Currently, LTC is one of the most widely accepted cryptocurrencies globally.
Why Is LTC Better?
Bitcoin is the biggest and the most popular cryptocurrency on the market. But huge demand for BTC entails many problems for investors such as slow block time and quite high miners’ fees. Instead, Litecoin offers a much lighter version of the well-known Bitcoin. If you’re looking for a reliable crypto for everyday use — LTC is a more fitting choice than Bitcoin. However, if you ever find yourself looking for a good store-of-value coin, you can always convert LTC to BTC.