Is LTC or ETH a better investment
Litecoin vs. Bitcoin - these are the differences
In the slipstream of Bitcoin - the value of the world's largest cryptocurrency recently exceeded the US $ 6,000 mark - Litecoin also made significant gains. In the crypto scene, Bitcoin is also referred to as the gold among the cryptocurrencies, while Litecoin is considered the silver among the digital currencies.
This raises the question for outside observers and investors, what distinguishes Litecoin and what are the differences to Bitcoin?
Cryptocurrencies - What is Litecoin?
The crypto currency Litecoin is de facto a spin-off from Bitcoin. Litecoin has been around since October 2011, and former Google employee Charlie Lee is considered the inventor of the crypto currency. The software that Litecoin uses runs under the so-called MIT / X11 license, which means that anyone can change the software and use it for themselves.
Like Bitcoin, Litecoin sees itself as a decentralized Internet currency based on blockchain technology. Like Bitcoin, Litecoin can also be used to buy services or products on the Internet.
With the Litecoin, users can make transfers on the Internet around the clock and across borders in seconds, there are no bank days or the like to consider. Litecoin thus fulfills a similar function as Bitcoin and enables more than 2 billion people worldwide who have so far not had access to banking services to process financial transactions.
Litecoin vs. Bitcoin - what are the differences?
But what are the differences between Litecoin and Bitcoin? On the one hand, the transaction costs with Litecoin are significantly lower. Most recently, a transfer with the digital currency Litecoin cost a few cents, while a transaction with Bitcoin - depending on the urgency - can devour several US dollars.
On the other hand, transactions with Litecoin can usually be processed faster than with Bitcoin, because a new block is generated on the Litecoin blockchain about every 2.5 minutes, while with Bitcoin it takes about 10 minutes.
Litecoin enables transactions that are around 4 times faster than Bitcoin. The bottom line is that Litecoin can process significantly more transactions per second (56 transactions / second) and at significantly lower costs than Bitcoin.
There are also differences between Litecoin and Bitcoin in the number of outstanding coins, although both coins are so-called deflationary cryptocurrencies. This means that inflation tends towards zero in the long term for both cryptocurrencies - i.e. the number of coins is limited.
While the number of coins in Bitcoin is limited to 21 million, in Litecoin it will later be 84 million coins - most recently around 53 million Litecoins were in circulation. 25 Litecoins are created per block generated, this amount halves approximately every 4 years (every 840,000 blocks).
While Bitcoin transactions are verified using the SHA256 algorithm, the Proof-of-Work Scrypt algorithm is used for Litecoin. This means that this crypto currency (abbreviation: LTC) can also be "mined" using conventional computer processors and graphics cards, while Bitcoin is mainly calculated or "mined" with ASIC miners.
Conclusion: Litecoin presents itself as an interesting alternative to Bitcoin
Most recently, around 3 billion US dollars were invested in the crypto currency Litecoin, making Litecoin one of the top 5 largest crypto currencies. Compared to Bitcoin, Litecoin can boast significantly faster transaction times and lower costs. The digital currency is also to be further developed in the future. Litecoin founder Charlie Lee announced in the middle of the year that he would be returning to Litecoin from the Coinbase crypto exchange in order to advance the further development of the cryptocurrency.
However, investors must note that Litecoin has so far only been accepted as a means of payment by a few small retailers. Here are the advantages of Bitcoin, which is not only recognized as an official means of payment in Japan, but is also accepted by some large companies (Dell, Expedia, etc.).
The Litecoin program code is considered solid, but there are significantly more developers on the Bitcoin side who are driving the project forward. Therefore, the Litecoin remains interesting only for speculatively oriented investors who rely on the advantages of the Litecoin in terms of transaction speed and costs.
The bottom line is that investments in crypto currencies are generally subject to very high fluctuations and should therefore - if at all - only be considered as an addition to a portfolio.
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