Even if you’re remotely interested in cryptocurrencies, you must have heard the terms “Bitcoin” and “Litecoin.” Both are digital currencies that are pretty popular among investors and crypto enthusiasts alike. They possess a lot of similarities on various levels, like the underlying technology, buying & selling method, storage, etc., but they are pretty distinct from one another.
If you’re considering buying either of these or both, you should first be aware of some fundamental differences between the two. It will help you decide whether you want to buy btc in India, Litecoin, or both.
Differences between Bitcoin & Litecoin
If you believe Bitcoin and Litecoin are almost the same thing as they’re both cryptocurrencies and use blockchain technology, you’re in for a surprise. Take a quick look below to understand how these two cryptocurrencies differ from one another.
- Cryptographic Algorithms
A stark difference between the two coins is the use of different cryptographic algorithms. These algorithms significantly influence the way coins are mined. Bitcoin uses the SHA-256 algorithm that facilitates a greater and much better degree of parallel processing.
On the other hand, Litecoin uses Scrypt, a fairly new algorithm that was designed to make Litecoin more accessible to those who wanted to participate as miners. Bitcoin mining involves the use of ASICs, while Litecoin’s Scrypt is ASIC resistant.
For the uninitiated, ASICs are chips created specifically for cryptocurrency mining. Bitcoin is mined by ASIC miners that are in a mining pool, so not every individual can participate in Bitcoin mining. Luckily, this is not the case with Litecoin due to its cryptographic algorithm, which is ASIC-resistant. Litecoin enables anyone with a GPU and CPU to participate in Litecoin mining, making it easily accessible to more people.
- Market Capitalization
If you’re looking for an area of difference that establishes a huge difference between Bitcoin and Litecoin, it’s their market capitalization. Even though Litecoin is the sixth most popular digital currency in the market, Bitcoin continues to dwarf all others. As of March 2021, all the Bitcoins in circulation had a total worth of around $1 trillion.
Litecoin, on the other hand, had a total value of $ 13.7 billion, which is 70 times lesser than the total worth of Bitcoin in circulation. In terms of market capitalization, the only cryptocurrency that is catching up to Bitcoin is Ethereum, the second most popular cryptocurrency in the crypto world.
- Transaction Speed
While the transactions happen almost instantly on Bitcoin and Litecoin networks, time is required to confirm those by network participants. According to Blockchain.com, a transaction confirmation time is somewhere under nine minutes for Bitcoin, while the same is a little under two and a half minutes for Litecoin. The faster transaction confirmation speed is an advantage Litecoin holds over Bitcoin, and it has also resulted in its popularity growth. The high transaction speed can also help during ltc to inr conversions.
Transaction speed can make merchants choose Litecoin over Bitcoin, as they won’t have to wait for a longer duration to get the transaction confirmed and completed, making accepting payments faster and secure. But there are merchants who can, and they do accept transactions without any confirmation, putting both Bitcoin and Litecoin on the same level.
- Transaction Cost
Nothing comes free, especially when you get to transfer digital currencies worldwide within a matter of minutes. Whether you use the Bitcoin network or Litecoin network, both will charge you a transaction fee. The difference, however, clearly lies in the amount of fee charged. Bitcoin has charged as high as $52 during its peak time in December 2017, whereas Litecoin has charged somewhere around $1.4.
Litecoin clearly earns brownie points for charging a fraction of what Bitcoin charges as transaction costs. If you combine the transaction fee with the funds transferred, Litecoin emerges as a viable option for micro-transactions. Lower transaction cost also makes it easier for new investors to enter the crypto space, which is a big plus for Litecoin.
Another difference between these two digital coins is the number of coins they can produce and distribute. Bitcoin has a limit of up to 21 million coins, while Litecoin has a limit of up to 84 million coins. While a higher limit can seem like a plus point for Litecoin on paper, it really doesn’t have a significant impact in the real world because both coins can be divided into infinitesimal amounts. For example, the minimum permissible quantity of Bitcoin eligible for a transfer is 0.00000001, i.e., one hundred millionth of a Bitcoin. Litecoin, too, can be divided into such a quantity for transfer purposes.
Both Bitcoin and Litecoin have their advantages and disadvantages, so be sure to invest depending on your precise needs. If you’re planning to purchase either or both Bitcoin and Litecoin, choose a trusted and popular crypto exchange platform for the same. Never buy these digital tokens from people you don’t know via peer-to-peer networks to avoid any scams. If you keep all these bits of information in mind while making an investment decision, you will rarely make a mistake.