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Since Bitcoin came out a decade ago, a plethora of altcoin (alternatives to Bitcoin) was born. So many, in fact, that second CoinMarketCap, there are currently over 2,000 despite the bear market. Each of these altcoins has similarities and differences, but let's look at two of the most popular: Ethereum and Litecoin.
What is Ethereum?
Ethereum is a public blockchain that allows developers to create third-party applications (dApps). Rather like iOS and Apple Store, Ethereum provides an almost unlimited innovation platform to flourish.
Like Bitcoin, Ethereum has its own native cryptocurrency called Ether (ETH). It also uses the same Proof of Work (PoW) protocol to protect its network.
Without going into the meanderings of cryptocurrency extraction here, PoW basically means that miners must verify block transactions in the Ethereum blockchain. They do this by solving mathematical equations in exchange for Ether.
One of the reasons why Ethereum has taken off so much is due to its implementation of smart contract technology. Smart contracts allow a user to transfer a payment to another user without an intermediary.
The ICOs arrived to them in 2017 thanks to their ability to use the Ethereum platform to create their own ERC-20 tokens and sell them via smart contracts.
This is also one of the main reasons behind the overwhelming price of ETH in 2018, given that many ICOs have started to download and panic selling ETH. Since they use ETH to raise funds rather than as a store of value, most ICOs started to cash out when the price started to fall.
The face of Ethereum is widely recognized as Vitalik Buterin, one of the most important personalities of the crypt. However, Ethereum was also developed by Jaxx founder Anthony Di Iorio and ConsenSys founder Joseph Lubin.
What is Litecoin?
Watching Ethereum vs Litecoin is like trying to compare apples and oranges. They are both very different. Depending on your preferences, it's up to you to decide which one you like best.
Unlike Ethereum, which has a greater focus on its developer network than its native currency, Litecoin is a cryptocurrency in the true sense of the word.
Litecoin is very similar to Bitcoin since Litecoin is actually a fork of Bitcoin. The Ex-Google employee and creator of Litecoin, Charlie Lee, sent a Bitcoin update in 2011 that most miners did not agree. This has divided the network into a new blockchain that has become Litecoin.
Compared to Bitcoin, Litecoin is much faster and transactions are cheaper. It's also easier to run updates like SegWit on its network, because its community is smaller than the Bitcoin network, which avoids internal struggles. This makes Litecoin a good test for Bitcoin.
Franklyn Richards, founding director of the Litecoin Foundation, said that the two networks "do not compete, we benefit" and that Bitcoin and Litecoin help each other. Many users also transfer Bitcoin using Litecoin's network because transaction times are faster.
Ethereum vs Litecoin: the main differences
Time in the market
One of the main differences between Ethereum and Litecoin is that Ethereum is much more recent than Litecoin. Litecoin has been around since 2011 (which could also be centuries in the crypto industry).
Ethereum has not been unveiled until 2015. But since it has many more valuable proposals than Litecoin, it has developed at a much faster pace.
Market capitalization
Ethereum is currently the third largest cryptocurrency after Bitcoin and XRP of market capitalization (about $ 13 billion), nurturing Litecoin in seventh place with a market capitalization of almost $ 2 billion.
Functionality
Litecoin is much more a payment system than Ethereum, which is a platform of applications for developers. The main reason for being Ethereum is a decentralized IT system with its own programming language that allows developers to create dApps via smart contracts.
Lock time
The blocking time on Ethereum is quite low, which means that an Ethereum transaction can typically be confirmed in about 10-20 seconds. Litecoin, on the other hand, takes about 2.5 minutes.
Transactions
The Ethereum network can currently handle around 15 transactions per second, while Litecoin can handle around 56 transactions, which gives it an advantage. However, both these figures are paler than Visa, which can handle up to 24,000 transactions a second.
It should be noted that both blockchains are working on scaling solutions to improve the number of transactions per second. Ethereum is working on its sharding and plasma solutions while Litecoin is adapting to the Lightning network.
Total offer
Litecoin has a limit of 84 million tokens. This is much more than Bitcoin at 21 million and aims to keep its goal of being a cheaper currency. There is no established limit of Ether that can be extracted.
Extraction
Both cryptocurrencies use PoW for mine, however Ethereum is working to move to a Proof of Stake (PoS) extraction system that uses less computational energy by 2020.
The main takeaway
Looking at Ethereum vs Litecoin may not be as important as examining each person's individual strengths and the goals they serve. And if you're looking to invest in cryptocurrencies, it's always a good idea to diversify your portfolio.
