Litecoin is a cryptocurrency that came as a light version of Bitcoin. It is open-source just like Bitcoin but as we know Bitcoin’s prices show unexpected fluctuations that is why its creator Charlie Lee brought this currency into the digital market in the year 2011 as an alternative coin. Charlie was working in Google before this.
If we compare Bitcoin to gold, we can call Litecoin silver. Hence, we can see one serves as a substitute for the other. In the digital world, another example of Litecoin would be Facebook’s other app called Facebook Lite. This app also is a Facebook app and almost carries the same features but the lite version makes it a little cheaper to afford it and also in fewer resources you can use it as Facebook’s substitute.
As a lite version, it is easy to mine, kept and stored. As we know for Bitcoin mining, we need ASIC based device but Litecoin’s mining it can be done through your computer’s GPU or through using its hash power, you don’t need big devices for its operation. Its storage is also comparably less and in terms of value also it is demanding and is too popular. If you want to invest in bitcoin then read the guide for beginners.
The Bitcoin protocol was really a heavy formation for its currency that is why protocol’s lite version was launched as Litecoin. Its formation was done in a hard fork in a Bitcoin protocol.
Charlie Lee its originator wanted Litecoin to be its lite version that is user friendly and equally popular and its mining is not that complex and time-consuming.
How Litecoin Differs From Bitcoin
- In Litecoin the block formation time is 2.5 minutes as compared to Bitcoin that takes around 10 minutes to process a single block which means the number of transactions taking place in Litecoin is more.
- The algorithms used in both the coins is also different, in Litecoin the proof of work algorithm used is SCRYPT and in Bitcoin’s case, it is SHA-256 which means Litecoin has comparably a lot more memory than Bitcoin.
- In Litecoin the transaction time is much lesser and can give four times better results if compared to bitcoin.
- In terms of scalability also Litecoin gives better results, the reason being the meagre transaction fee. And we know in terms of scalability Bitcoin’s performance has not been up to the mark. To deal with scalability issues Bitcoin has to increase its transaction fee which is already more.
- If we talk about mining, to mine a Bitcoin you need big devices and larger platforms. But to mine a Litecoin you don’t need big devices for this and Litecoin mining can be initiated on a computer as well through using its hash power or GPU.
- If we talk about energy consumption, Bitcoin, as per reports, has been held to be 3rdlargest consumer of electricity, which is too much for just a cryptocurrency and has the worst impact on the environment as well. But as told above, as Litecoin’s mining is possible even on a computer, the energy consumption is less and hence fewer chances of environmental pollution.
- In terms of market cap, Bitcoin’s market cap is way too high, reaching in trillions whereas Litecoin holds its value in billions.
- Another point of difference is that bitcoin’s production cannot go beyond 21 million, and in Litecoin it production can go up to 84 million.
The topic provided above gives a brief knowledge about Litecoin, its origin and how it is different from bitcoin. I hope it will clear your doubt concerning these cryptocurrencies. Good luck as a crypto trader!