What is Litecoin and How is it Different Than Bitcoin?
The last one week has seen a surge in the prices of all cryptocurrencies. But there is one that has stood out from the rest, and that’s Litecoin. This alt-coin has pushed up by more than 200% in just one week. In fact, there are experts out there who believe Litecoin will rival bitcoin prices in 2018. Sounds interesting right? So what exactly is Litecoin?
Litecoin is a peer-to-peer open source project that has a focus on lowering transaction costs and increasing transactional speeds. This explains why Litecoin has seen a surge in the last week due to the increasingly unaffordable bitcoin transaction costs, as well as lower speeds. In short, Litecoin is the better version of Bitcoin.
Other than speed and cost, are there other differences between the two?
While Bitcoin and Litecoin are both anchored on blockchain technology, the two have a number of fundamental differences. Here are some of the differences that set the two cryptocurrencies apart.
1. The number of coins on offer
The number of Bitcoins that can ever be mined stands at 21 million. This is quite different from the 84 million lite coins that can be mined.
2. Their algorithms
This is the most fundamental difference between the two coins. While bitcoin uses the SHA-256 algorithm, lite coin makes use of a totally different algorithm known as Scrypt. The SHA-256 algorithm is more complex and requires the use of complex computer hardware in order to mine bitcoin. On the flip side, Scrypt is pretty recent and is designed to ensure that even people who don’t have access to expensive mining hardware can take part in the mining process.
3. Average block time
The average block time for Bitcoin is 10 minutes. This is quite slow as compared to the average of 2.5 minutes for lite coin. This difference in block time may explain why lite coin is way faster than bitcoin and hence considered more efficient for day-to-day transactions.
4. Block rewards
Bitcoin reward halves after 210,000 blocks. On its part lite coin blocks half after 840,000 blocks. This means that bitcoin mining will in the long run be more difficult to do profitably as compared to lite coin. The result could be a shift of miners towards lite coin and in the process helping push its price up faster than it is already moving up.
5. What are the advantages of Litecoin over bitcoin?
One of the greatest advantages that Litecoin holds over bitcoin is that it has the capacity to deal with a higher volume of transactions and at a faster speed. That’s because Litecoin blocks are generated faster than those of bitcoin. The fact that Litecoin has a faster transactional speed also means that Litecoin has a lower vulnerability to double spending attacks.
Is Litecoin a better investment than Bitcoin?
At this point, Litecoin could be a better investment than bitcoin in the sense that it has room to appreciate at a faster rate. That’s especially the case, with the coming of bitcoin futures. Futures might have the effect of reducing the huge volatility that has made bitcoin profitable up to this point. In short, one can argue that bitcoin is now in its maturity stage while Litecoin is still in the growth phase. A great way to discuss Litecoin investing strategy is to apply to join our Litcoin real-time chat and forum.