Cryptocurrency has always been a polarizing issue, and recent debates on how it should be regulated certainly add to questions about its legitimacy. But with the popularity and supposed potential of cryptocurrencies like Bitcoin or Litecoin, it's definitely important to know what you're talking about before knocking (or, for those brave souls, before investing).
Litecoin is often seen as the "silver" of gold "by Bitcoin – a valid but somewhat less valid alternative, but Litecoin, as the fastest version of the Bitcoin transactions it actually has a limit greater than how many coins can be mined is definitely worth looking into.
But before entering Litecoin's bronze blows against Bitcoin, what is Litecoin and Bitcoin actually? There are no stupid questions here.
What is litecoin?
Just like other cryptocurrencies, Litecoin is a global digital payment method that uses blockchain technology to transfer and exchange "coins".
Litecoin was originally created in 2011 by the former Google engineer (GOOG) Charlie Lee, under the MIT / X11, as a cryptocurrency peer-to-peer. Since Bitcoin's creator, Satoshi Nakamoto, made the Bitcoin code public, Litecoin is in many ways an extension or a variation on Bitcoin since the code was open for editing (read: the Bitcoin code is essentially the foundation of various cryptocurrencies, including Litecoin). For this reason, coins like Litecoin are often called "altcoin".
However, Litecoin uses a different blockchain, which allows you to have a faster transaction or a transfer speed. Litecoin uses open source software to create and transfer coins and is decentralized.
Since Litecoin hit the market, its growth has been quite staggering. According to Forbes, Litecoin peaked in December 2017, reaching $ 360.93. At just $ 4.40 a year earlier, Litecoin saw an 8200% increase.
Like most cryptocurrencies, Litecoin's future is much under discussion, but these digital "currencies" are starting to become more widely accepted as payment.
At the time of writing this article, a Litecoin is worth about $ 51 US dollars (or, 1 LTC is worth $ 51 USD).
What is Bitcoin?
Bitcoin, for many, is the original cryptocurrency that has (so far) retained its most popular status.
Created in 2009 by an unknown individual directed by Alias Satoshi Nakamoto, Bitcoin was designed as an alternative currency that uses blockchain technology to presumably increase security in financial transactions across the network.
Bitcoin has essentially opened the way to the cryptocurrency sector by allowing Bitcoin miners to extract coins in the blockchain public network. Bitcoin can also be purchased through exchanges, just as a stock can be purchased through Dow Jones Industrial Average (DOW) or S & P 500
At the time of writing this article, a Bitcoin is worth about $ 6,400 US dollars (or, 1 BTC is worth $ 6,400 USD).
Litecoin vs. Bitcoin: what is the difference?
So both Litecoin and Bitcoin are cryptocurrencies that share a similar basic structure and are based on cryptographic networks, but what are the differences between the two? And how do you buy them?
Algorithm and Mining
One of the main differences between Litecoin and Bitcoin are their different cryptographic working test algorithms.
Bitcoin uses a traditional SHA-256 algorithm, while Litecoin uses an algorithm known as Scrypt. The way these two algorithms influence the difference between Litecoin and Bitcoin is based on the speed at which they are able to extract the respective coins.
The Litecoin algorithm is designed to produce about four times more Bitcoin coins – producing one coin every 2.5 minutes (while Bitcoin produces one every 10 minutes). So, the acquisition speed is really the main difference.
However, both Litecoin and Bitcoin use algorithms that use computing power to process transactions, which is performed by "miners" who confirm transactions in their networks with their computing power and receive coins in return. But the speed at which these transactions occur is very different for the respective Litecoin and Bitcoin algorithms.
The SHA-256 algorithm of Bitcoin, famous for being very complex, has been modified over the years by miners and commonly uses so-called application-specific integrated circuits (ASICs): hardware systems that can be customized for the extraction of Bitcoins. For this reason, the Bitcoin algorithm emphasizes processing power. However, a criticism of Bitcoin's algorithm is that it is becoming increasingly difficult for ordinary users to extract Bitcoin because of its complexity.
On the other hand, Scrypt, which is used by Litecoin, is generally a more efficient algorithm for cryptocurrency mining because of how it is designed to avoid too much customization with hardware solutions like ASIC. Scrypt, unlike SHA-256, promotes high-speed random access memory. For this reason, Litecoin's algorithm makes it easier for regular cryptocurrency users to participate in mining without too much complexity.
Since Scrypt allows regular miners to often use CPUs (central processing units) or GPUs (graphics processing units), Litecoin is generally a more easily accessible way to extract coins than Bitcoins.
The capitalization of Bitcoin stands at around $ 109 billion since the end of 2018, while Litecoin reaches about $ 3.05 billion from 2018.
However, the astronomical increase of Bitcoin is quite evident in its market capitalization alone: in 2010, Bitcoin's market capitalization was only $ 42,000. And while this figure has fluctuated over the years, alternative currencies such as Litecoin are certainly gaining ground on the crypto-giant.
Transaction in progress
Transactions take a long time to be confirmed by members of the blockchain network, both for Bitcoin and for Litecoin. As with recent estimates by Blockchain.info, Bitcoin transactions can be confirmed approximately once every 10 or 11 minutes – fluctuating in high time. Thus, a block is drawn approximately every 10 minutes.
However, Litecoin's transaction processing is much faster than Bitcoin – the processing of a transaction confirmation about once every 2.5 minutes. It is because of this dramatic speed difference that has made Litecoin an attractive option for companies that use overcoins because they do not have to wait so long for their transactions to be processed.
Furthermore, another integral difference between Bitcoin and Litecoin is their total coins. Essentially, Bitcoin and Litecoin can only produce a certain amount of coins. Bitcoin can produce a total of 21 million coins in its network. Litecoin, however, can produce up to 84 million coins. But, although it may seem that Litecoin has the upper hand over potential, Bitcoin (and Litecoin) can be divided and transferred in small quantities – the minimum for Bitcoin is one hundred millionth, or 0.00000001 Bitcoin (called "satoshi" in the crypto community).
Since both cryptocurrencies are able to be divided so much, the cost of a complete coin of both is less consequential than it may seem.
However, some as the administrator of IBM (IBM) Richard Brown have stated in the past that users may want to exchange entire coins, which, considering the greater total amount of Litecoin coins and the lower price, would give it a benefit. But since some portfolios such as Coinbase show the fraction of a Bitcoin or Litecoin relative to the value of the USD, the concern about the transfer of fractions seems somewhat diminished.
When a miner draws a block, he is rewarded in a certain number of Bitcoins or Litecoin.
The current block premiums of Bitcoin and Litecoin are respectively 25 BTC and 50 LTC (2014). However, the Bitcoin prizes are halved every 210,000 blocks, while the Litecoin prizes are halved every 840,000 blocks. However, due to the time taken to process Bitcoin (in particular) and Litecoin (10 minutes for a Bitcoin and 2.5 for a Litecoin), it takes years to halve the value of the currency.
According to CNBC this year, 17 million of the possible 21 million Bitcoins have been extracted.
Where to buy Litecoin Bitcoin
There are several exchanges and portfolios in which you can buy or exchange Litecoin and Bitcoin.
For Litecoin, popular exchanges include Binance and IncoreX – both of which allow you to buy and sell Litecoin.
There are numerous portfolios and exchanges with which to buy and sell Bitcoin, in particular Coinbase and Binance.
However, when you buy or sell Bitcoin or Litecoin, make sure you are on the alert to avoid cryptocurrency scams.