Bitcoin vs. Litecoin: Understand the Difference?
The past few years are testimonials of the dramatic fluctuation of public interest in cryptocurrencies. However, the investors’ interest in crypto surged in the 2020s. The dominant name in cryptocurrency, Bitcoin, has also been the main focus of investors. Just like Bitcoin, Litecoin is also a cryptocurrency. Litecoin, founded in 2011, two years after Bitcoin, which originated in 2009, is also considered one of its leading competitors.
Understanding the difference between the two cryptocurrencies
While Bitcoin and Litecoin both cryptocurrencies and enjoy a good hold in the market, we will understand the basic difference between the two.
The market capitalization value of Bitcoin and Litecoin is one of the most prominent differences between the two cryptocurrencies. As of March 2021, the market cap of all bitcoins in circulation is around $1 trillion. It makes the Bitcoin market cap over 70 times larger than Litecoin, which holds a total value of $13.7 billion.
Another striking difference between Bitcoin and Litecoin concerns the total number of coins that each cryptocurrency can produce. This aspect is where Litecoin takes the lead by accommodating up to 84 million coins, wherein the Bitcoin network can never cross 21 million coins. Theoretically, it may sound like a huge advantage, but its effects are negligible in the real world. It is because both Bitcoin and Litecoin are divisible into nearly infinitesimal amounts.
Talking about technicalities, the time taken for transactions is almost negligible on both Bitcoin and Litecoin networks. However, the confirmation time of transactions on other networks is better of Litecoin when compared to that of Bitcoin. This factor is one advantage that has resulted in the growing popularity of Litecoin.
The different cryptographic algorithms employed by Bitcoin and Litecoin are the most fundamental technical differences between the two cryptocurrencies. Bitcoin employs the longstanding SHA-256 algorithm. On the other hand, Litecoin works using the comparatively new algorithm known as Scrypt. The different cryptographic algorithms come into play in minting new coins, hence forming a significant difference between the two cryptocurrencies.
While you may call Bitcoin and Litecoin the gold and silver of the cryptocurrency world today, history has proven that in this still- developing and fast-paced world, the status quo can change in the blink of an eye. Therefore, what will be interesting to see is whether these cryptocurrencies that have created a stir in the finance world today will retain their stature in the years to come.