What to mine bitcoin or litecoin

Litecoin vs. BitcoinВ

Litecoin is a fork of Bitcoin — but how do the two currencies far when compared side-by-side?

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‍Bitcoin and Litecoin are two of the most veteran cryptocurrencies, with the former launching in 2009 and the latter soon after, in 2011. Charlie Lee, a former Google engineer, presented Litecoin at its launch as the “light version of Bitcoin.”В

Over the years, as new cryptocurrencies proliferate and attract ever more attention, both coins still remain highly popular. Bitcoin, of course, still occupies the top spot and remains the largest cryptocurrency by market cap.В

Litecoin, meanwhile, hovers around 14th place (as of June 2021) and has been overtaken by newer currencies that have dominated the news cycle in recent times, such as Dogecoin and Binance Coin. However, Litecoin has held its ground as a sound crypto investment that has offered an incredible ROI to its long-term holders.В

These two cryptocurrencies have a lot in common, but there are also stark contrasts that have fed into their very different positions in the wider crypto market. This article offers a comparison between Bitcoin and Litecoin to help readers to clarify how they are different and what could be next for these two currencies.В

The Bitcoin and Litecoin Blockchains

Design and Aims

At the highest level, Bitcoin and Litecoin are extremely similar. They are both decentralized cryptocurrencies created to support peer-to-peer (P2P) transactions. They are designed to serve as a medium of exchange and store of value while removing the need for a central party to serve as a guarantor, e.g. a central bank.В

Both coins’ similarity is reflected in their respective monikers, with Litecoin referred to as the silver to Bitcoin’s “digital gold.” Litecoin’s open-source network positions itself as a “proven medium of commerce complementary to Bitcoin.” In short, Litecoin emerged with the intention of offering a pared-down version of Bitcoin in terms of ease of mining, faster transactions and lower transaction fees.В

AlgorithmsВ

Bitcoin and Litecoin are both cryptocurrencies that use a proof-of-work (PoW) consensus mechanism to add new blocks to the blockchain. However, the algorithms behind this mechanism are quite different, as Litecoin’s is less complex and requires a lower hash rate.В

Bitcoin’s algorithm is called SHA-256; Litecoin’s is called Scrypt. SHA was originally designed by the United States National Security Agency in 2001. Scrypt offers a less complex but more memory-intensive mining process. The inner workings of Bitcoin and Litecoin are thus very similar, with similar governing principles. They both require an immense amount of computing power to mine blocks on the main chain. Some consider that the inefficiency of this process has been improved upon with the emergence of new protocols, such as proof-of-stake (PoS).В

Block Sizes

A Bitcoin block will generally house around 1,500 transactions. Both Bitcoin and Litecoin have an original block size limit of 1MB. However, these limits can be superseded by using off-chain or layer 2 solutions to improve scalability. Bitcoin Cash, another cryptocurrency, is a hard fork that first updated its chain’s block size limit to 8MB and later 32MB.В

Transactions Per Second

Litecoin has a maximum capacity for 56 transactions per second, whereas Bitcoin has a maximum capacity of only around seven transactions per second. Even though it appears that transactions occur instantaneously, it takes time for them to be fully validated and added to the blockchain. For Bitcoin, this process usually takes around nine or ten minutes.В

Litecoin was created in part to boost transaction speeds, offering an average of two and a half minutes for the block to be fully verified and added to the Litecoin blockchain. This difference in speed isn’t of consequence to many, although some merchants do prefer a faster speed so that they are immediately sure that a given transaction has been executed and verified.

Transaction Fees

Another aspect that Litecoin has sought to improve upon is transaction fees. With Litecoin, users can expect to pay around $0.03 or $.04 on average in transaction fees. Compare this with Bitcoin’s more expensive $7.60 average transaction fee. Fees are lower with Litecoin because the network sets aside LTC that doesn’t derive from transaction fees in order to incentivize miners.В В

Litecoin vs Bitcoin Mining

Both Litecoin and Bitcoin are designed to provide a limited supply of currency that cannot be surpassed. Bitcoin’s is set at 21 million BTC, whereas Litecoin’s is 84 million LTC. Once all the coins on the blockchain have been mined, the supply limit will have been reached.В

It’s estimated that the very last BTC won’t be mined until the year 2100, due to difficulty adjustments that are designed to keep the rate of new block creation stable. It’s estimated that Litecoin’s supply limit will be reached around roughly the same time.

BTC and LTC rewards for mining blocks are designed to halve at given intervals — every 210,000 blocks for Bitcoin and every 840,000 for Litecoin. This is a deflationary strategy designed to preserve the value of the coins through scarcity.

As mentioned, both Litecoin and Bitcoin miners operate within a PoW-based system but Litecoin demands less computing power thanks to its simplified algorithm. Litecoin makes it easier for miners to participate in the network without the need for specialized hardware, enabling even those with a private computer to mine easily.

LTC vs BTC

Bitcoin’s value is hovering around $34,000 at the time of writing, with a $720 billion market cap. Litecoin is further down the list of currencies ranked by market cap and is currently valued at $189 per coin, with a $12 billion market cap.

What’s Next for Litecoin & Bitcoin?В

There are many value predictions for both Litecoin and Bitcoin that range from highly conservative to extremely bullish. Both of these currencies are likely to retain their place as leaders in the crypto market, although there are some who believe that rivals like Ether could eventually overtake Bitcoin and seize the top spot.

Both currencies and communities will undoubtedly grow their users and community of miners, developers and node supporters. Litecoin transactions will likely increase as the blockchain supports an extremely low-cost P2P payment option. Bitcoin, for its part, will likely keep its role as digital gold due to its prestige as the first cryptocurrency.

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Author(s)

Kevin Dwyer

I’m a technical writer and journalist covering cryptocurrency and tech. I believe blockchain can build a better world, so I’m here to report on how we get ther

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Litecoin vs. Bitcoin: The Difference & Which is Better | LTC vs BTC

Introduction: The Origins of Litecoin and Reasons for Its Creation

More than a decade ago, an obscure person or group named “Satoshi Nakamoto” unleashed upon the world a digital currency that in its short lifespan, has become a global movement. Within a couple of years of its release, Bitcoin (BTC) started to inspire individuals who saw the potential in cryptocurrency and sought to start similar projects.

One such individual was Charlie Lee, a former Google engineer, who created a fork or split from Bitcoin called Litecoin (LTC), that was similar but had a few key differences. Despite its similarities with the original cryptocurrency, Litecoin became its own movement in itself, with its own community and a sizeable chunk of the crypto market.

Around the time of Litecoin’s creation, people saw Bitcoin’s value go from basically nothing to nearly $30 in June 2011, resulting in investment gains the likes of which no one had ever seen before.

However, it was hard to acquire Bitcoin in those days since there weren’t easy ways to buy it.

Moreover, the process of mining, where users help validate Bitcoin transactions and get rewarded in transaction fees and newly minted BTC for doing so, was becoming increasingly difficult thanks to the rise of expensive specialized mining devices called application-specific integrated circuits (ASICs). ASICs made mining harder and put mining out of reach for everyday individuals.

Therefore, while many realized the potential of Bitcoin both as a groundbreaking technology and investment vehicle, they felt that it was too late to get in on the ground floor of BTC as an early adopter (little did they know how wrong they were!).

As of writing, Bitcoin’s market capitalization (all Bitcoin in circulation multiplied by Bitcoin’s price) is higher than that of companies like PepsiCo, Toyota, HSBC, Citigroup, and Netflix. For those who thought it was “too late” back in 2011 — things were just beginning! Image credit: Statista

Against this backdrop, Charlie Lee launched Litecoin (LTC), which sought to improve upon Bitcoin with faster transactions and a more egalitarian mining process thanks to Scrypt, a mining algorithm that would prevent ASICs from taking over.

While “another Bitcoin fork” doesn’t sound too revolutionary today, those were the early days of crypto and Litecoin quickly gained a following. It also rewarded early adopters who perhaps weren’t as early to the Bitcoin party, with 1 LTC going from $0.03 in July 2012 to $40 in November 2013 — a 1,300x or 130,000% increase.

With Bitcoin and Litecoin both being around for years now and being pillars of the crypto community, what other differences, aside from transaction speed and mining algorithm, exist? In this article we’ll compare Litecoin vs. Bitcoin in terms of transaction speed, transaction fees, scalability, mining, mining profitability, hashrate, community, merchant adoption, and price to see which is better.

Litecoin vs. Bitcoin Transaction Speed

As mentioned, one of the ways in which Litecoin creator Charlie Lee sought to improve upon the Bitcoin idea was making Litecoin transactions faster than those of Bitcoin.

On average, it takes 10 minutes to confirm a Bitcoin block (1 block contains many transactions), whereas it takes 2.5 minutes to confirm a Litecoin block. Image credit: BitInfoCharts

Since Litecoin transactions confirm 4 times faster than Bitcoin transactions, Litecoin is the winner when it comes to transaction speed and for situations where people need transactions quickly validated.

Litecoin vs. Bitcoin Fees

The next point to consider when comparing Bitcoin vs. Litecoin is transaction fees. Staying true to its name, Litecoin again is “liter” when it comes to transaction fees:

As of writing, Litecoin has an average transaction fee of $.0327 while Bitcoin has an average transaction fee of $0.631, meaning that it’s nearly 20 times as expensive to get a Bitcoin transaction included in a new block of transactions. Image credit: BitInfoCharts

Again, Litecoin takes the cake here, as Bitcoin’s higher transaction fees make it less suitable for everyday transactions.

Bitcoin vs. Litecoin Scalability

If you look closely at the screenshot above with Litecoin and Bitcoin’s average transaction fees over time, you can see that Bitcoin’s transaction fees were once similar to those of Litecoin’s and at times even lower (especially in Bitcoin’s early days).

However, as more and more users have started to use Bitcoin over time, Bitcoin has struggled with scalability, or the ability to handle many transactions at once, which you can see in the form of higher transaction fees in order to get a transaction included in a new block.

While this might make you think that Litecoin is better able to handle lots of transactions or scale, due to its lower transaction fees, this is an unfair comparison, since Bitcoin routinely handles many more transactions than Litecoin:

As of writing, Bitcoin handles more than 10 times as many transactions as Litecoin per day, making any comparison of the two cryptos’ scalability irrelevant. Image credit: BitInfoCharts

If Litecoin dealt with as many daily transactions as Bitcoin, comparing the two projects’ scalability would make sense. But since that isn’t the case, there isn’t a clear winner between Litecoin and Bitcoin when it comes to scalability.

Aside from that, Bitcoin and Litecoin are experimenting with similar scalability improvements, such as SegWit and Lightning Network. Indeed, Litecoin is sometimes referred to as a “testnet” for Bitcoin improvements.

Litecoin vs. Bitcoin Mining

Along with faster transactions, the key improvement Charlie Lee wanted to emphasize with the release of Litecoin was its resistance to ASIC mining centralization.

While Scrypt, Litecoin’s mining algorithm, did fend off the ASICs for quite some time, it, too, fell victim to ASIC mining, as manufacturers were able to figure out a way to manufacture Scrypt ASICs.

Ironically, this has led to Litecoin mining becoming more centralized than Bitcoin mining, with 5 mining pools (groups of miners that “pool” their mining power together to mine more blocks while splitting rewards) accounting for 71% of Litecoin’s hashrate (Litecoin network’s total mining power).

Image credit: litecoinpool.org

While Bitcoin’s hashrate distribution isn’t some decentralized utopia — in both networks, the top 3 pools make up 48% of the total hashrate, which is very close to the 51% needed for a 51% attack — it is still more decentralized than Litecoin’s. The top 5 Bitcoin mining pools “only” make up 60.4% of Bitcoin’s total hashrate:

Image credit: Blockchain.com

Thus, while Bitcoin and Litecoin both have pretty centralized mining processes, Bitcoin is slightly less centralized in that respect relative to Litecoin. Of course, this is ironic since one of the main reasons for Litecoin’s creation was to prevent mining centralization.

Litecoin vs. Bitcoin Profitability

Perhaps one of the reasons for Litecoin’s heavy mining centralization is that Litecoin’s mining profitability is currently the opposite of good. With not many miners willing to operate in the red (no profits), one can assume that former Litecoin miners have backed out of mining LTC, at least until LTC mining profitability comes back.

A comparison of the profitability of some Litecoin (left) and Bitcoin (right) ASICs side by side, assuming an electricity cost of $0.04 per kilowatt hour, which most “mining farms” (facilities with many mining devices) pay or pay less than for low-cost renewable energy. Image credit: ASIC Miner Value

This isn’t a good sign for Litecoin. If less miners are willing to mine a Proof of Work cryptocurrency, that means that the cryptocurrency isn’t as secure (it takes less mining power to launch a 51% attack on the network).

On the other hand, while Bitcoin’s mining difficulty is quite high, this is perhaps offset due to factors like Bitcoin’s higher price. When it comes to mining profitability, Bitcoin is the clear winner for now, and it shows in Bitcoin’s hashrate (shown below).

Litecoin vs. Bitcoin Hashrate

The next point of comparison for Litecoin vs. Bitcoin is network hashrate, or the total mining power allocated to the network by miners. The significance of network hashrate is that the higher it is, the more secure the network is. This is because if a network has a high hashrate, it’s more resistant to a 51% attack, since any malicious actor or group would need to somehow gain control of that much more mining power in order to launch an attack.

Bitcoin’s hashrate is orders of magnitude higher than Litecoin’s hashrate:

Image credit: BitInfoCharts

Since Litecoin is currently unprofitable to mine, we can see that not only is Litecoin’s hashrate lower than Bitcoin’s (this could also be due to the fact that Bitcoin is more popular), but also that Litecoin’s hashrate has been decreasing while Bitcoin’s has been steadily increasing.

This of course isn’t a good sign for LTC since security — against 51% attacks and otherwise — is of paramount importance when peoples’ money is on the line.

Litecoin vs. Bitcoin Community and Merchant Adoption

Aside from the more technical differences between Litecoin and Bitcoin that have been discussed thus far, another important point to consider is the difference in community between BTC and LTC.

As of writing, Bitcoin is undoubtedly more popular than Litecoin:

• Subreddit (communities for different topics on the social platform Reddit) subscribers — 1.3 million for r/Bitcoin vs. 211,000 for r/Litecoin
• Tweets per day — 25,457 for #Bitcoin vs. 744 for #Litecoin (Source)
• Merchant adoption — companies like Wikipedia, Microsoft, Expedia, Burger King, and Twitch accept Bitcoin vs. mainly lesser-known merchants for Litecoin. More crypto businesses like exchanges and wallets support Bitcoin compared to Litecoin, too

There are more and more places you can spend your crypto popping up daily. Image credit: coinmap.org

Litecoin vs. Bitcoin Price

As of March 9th, 2020, 1 LTC is $50.49, while 1 BTC is $8,007.03. However, keep in mind that the maximum limit for Litecoin’s total supply of LTC is 4 times greater than that of Bitcoin’s (84 million vs. 21 million), which can make Litecoin’s price seem relatively low despite the fact that it’s consistently one of the top 5-10 crypto assets by market cap (assets in circulation multiplied by asset price).

Though to newbie investors who don’t know what market cap is or means, the lower Litecoin price could signal more “room for growth” compared to assets like Bitcoin. From a price appreciation standpoint then, Litecoin might have a slight edge on Bitcoin, thanks to market psychology.

For the latest Litecoin vs. Bitcoin price, check the Exodus crypto charts.

Conclusion

In sum, Litecoin and Bitcoin are two of the most popular cryptocurrencies and have both been around for years. While Litecoin was originally created as a faster, less mining-centralized version of Bitcoin, some other differences have emerged since.

Indeed, Litecoin, as its “Lite” name would imply, has faster transactions and lower transaction fees. It also has a lower price than Bitcoin, which could entice more people to buy it, especially inexperienced investors.

However, Bitcoin has the upper hand when it comes to less mining centralization, increased mining profitability, higher hashrate, and wider community awareness and adoption.

Since Litecoin’s main technical advantages over Bitcoin — faster transactions and lower transaction fees — are being actively worked on by Bitcoin developers through developments like Lightning Network, one has to wonder what the point of Litecoin would be if Bitcoin is able to figure out its “scalability problem”.

If Bitcoin scales, transactions would be near instantaneous and free, making it even faster and cheaper than Litecoin or any other altcoin (cryptos that aren’t Bitcoin) that try to be a faster and/or cheaper version of Bitcoin. With that point in mind, we’re going to have to give this Bitcoin vs. Litecoin “fight” to BTC.

To safely secure your Bitcoin or Litecoin the easy way, check out the Exodus Bitcoin wallet and Litecoin wallet.

Litecoin vs. Bitcoin Reddit

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This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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