Cryptocurrencies are shaping our financial market to an exceeding extent. But, of course, cryptocurrencies have been in the game for a long time, as bitcoin was the first digital coin and Satoshi Nakamoto developed and released bitcoin in 2009.
However, cryptocurrencies suddenly boomed in 2020, with bitcoin as the main focal point. After bitcoin, numerous altcoins entered the mainstream marketplace. Out of all cryptocurrencies, the lite coin is a robust digital currency. Digital currency trading is currently very profitable; check https://altcoinsidekick.com/ to learn about bitcoin trading. According to the coin market cap, the lite coin is one of the largest cryptocurrencies in market valuation and trading volume.
Both bitcoin and lite coin have a considerable user base, and the nature of these currencies resembles each other to an exceeding extent. Let’s find out how bitcoin and bitcoins differ from each other.
How do Litecoin and Bitcoin show both dissimilarities and similarities?
Before discussing the factors that make litecoin and bitcoin different from each other, we should be familiar with the similarities between the two. Bitcoin and litecoin have many similarities; first of all, both bitcoin and litecoin are utterly independent.
No third parties and government authorities can interfere in these digital coins. Litecoin and bitcoin work on a cryptographic framework that maintains secrecy and scalability.
Litecoin entered the marketplace two years after bitcoin. Charlie Lee, one of the famous google engineers, developed bitcoin. He clearly stated that litecoin is a smaller model of bitcoin. Just like Tether is backed by the market value of USD, litecoin is backed by the market value of bitcoin. Since bitcoin is the virtual gold, litecoin is the virtual silver of the cryptocurrency marketplace.
Proof of Work!
Both bitcoin and litecoin work on proof of work technology. For example, the creator of bitcoin, Satoshi Nakamoto, transferred 100 bitcoin units to the developer of proof of work technology. Proof of work means that one can create these coins by mining. Mining refers to authenticating and adding the information regarding the transaction on the public ledger.
Differences between litecoin and bitcoin
Market cap
We all know that bitcoin is the largest cryptocurrency per the market cap, and no cryptocurrency at the instance can outplay bitcoin in terms of market cap.
The current market cap of bitcoin is nearly 1.5 trillion dollars; on the other hand, the market cap of the lite coin is $13 billion. Undeniably, both these cryptocurrencies are equipped with a finite supply, but bitcoin demand is very high. One of the reasons behind the higher demand for bitcoin is institutional involvement and early arrival.
Bitcoin as a cryptocurrency outperforms all other virtual coins. However, Ethereum, a blockchain-based model, is just behind bitcoin.
Supply
The market cap of ethereum is nearly $450 billion.
One of the significant differences between litecoin and bitcoin is distribution and the total number of coins present. We all are familiar with the fact that bitcoin is only 21 million in number; since litecoin is the lite version of bitcoin, it also has a finite supply, but litecoin is 84 million in number. Therefore, no miner can create litecoin after they mine 84 million bitcoins.
A higher number of minable litecoins might sound like an advantage to you, but it is a disadvantage. Due to the noninvolvement of government authorities, supply and demand play a major in influencing the market value of these digital coins. Since the supply of litecoin is more than bitcoin, the demand for lite coin will always be less than bitcoin. The lower supply of litecoin is one of the prominent reasons why litecoin has been trading at a moderate market value for a very long time and is not showing a significant blow.
Transaction Speed
The transaction speed of litecoin makes it better than bitcoin. Undoubtedly, bitcoin processes transactions in bare seconds, but in contrast, litecoin is still significantly less. Charlie Lee clearly stated that the only goal of creating litecoin was improving the transaction speed. For example, miners in the bitcoin network acquire a time limit of 10 minutes to solve the math puzzle; however, in litecoin, miners can mine a block in just 2.5 minutes.
The portion mentioned above describes how litecoin and bitcoin differ from each other.