In the cryptocurrency world, some tokens do things better than others. Litecoin is not a new coin in the market, in fact, it is nearly as old as the well-known cryptocurrency Bitcoin. Meanwhile, Ethereum, a coin created after Litecoin, has also made its place in the crypto market. So which one should you choose if you want to invest in coins other than BTC? In this article, we will compare two of the best options to help you further your choice. Ethereum vs Litecoin, what are the differences and similarity between these two coins?
What Is Litecoin?
Before stating their differences and similarities, we will explain what each coin are and stand for to give you a brief understanding of these coins.
Released in 2011 and referred to as a clone of Bitcoin, Litecoin was developed using the Bitcoin codebase but brings a couple of unique traits of its own. One of its distinguishing features is a finite supply of 84 million coins compared to Bitcoin’s 21 million. The cryptocurrency can also be mined four times faster than Bitcoin, meaning that transactions will be confirmed faster because the mining involves verifying transactions and adding them to the distributed ledger.
Litecoin can be viewed as the cryptocurrency equivalent of silver while Bitcoin is the gold. It focuses on smaller transactions. Litecoin uses Segregated Witness, a technology that allows more transactions to happen within a new block, which speeds up the process for personal transactions. After all, transaction time has been one of the main criticisms of Bitcoin when compared with other alternatives including altcoins and other payment methods.
Litecoin can support smart contracts, which usually are computer programs on the cryptocurrency’s blockchain and govern transactions. Yet, much of the lively development for smart deals is dedicated to Ethereum.
What Is Ethereum?
In 2013, Bitcoin enthusiast Vitalik Buterin released the Ethereum white paper, describing the potential of an alternative blockchain technology that can not only function as a financial tool but also as a decentralized platform where developers can build DAPPs and release their own tokens.
More developers joined and invested in Ethereum and soon a community of high-tech enthusiasts grew around the coin and its possibilities. Ethereum has grown into one of the largest cryptocurrency by market capitalization but it is also much more than that. What is Ethereum? Many people regard Ethereum merely as a cryptocurrency when actually Ethereum is more of a decentralized application platform on which Ether can be used as fuel for the entire Ethereum network. While the distinction may be hard to understand it is nonetheless one of the major factors that made it this popular.
All of the above information should be enough for a brief overview of what is Litecoin and what is Ethereum. Let us now compare them as a store of value and transaction medium.
Ethereum vs Litecoin: Difference and Similarity
One of the biggest concerns when trading cryptocurrency is its volatility. We believe the booms and busts in last year’s cryptocurrency world have proved that. As a store of value, we cannot avoid talking about the basic function of these two coins. Ethereum vs Litecoin. Let’s see which one is doing better.
Ethereum is not as old as Litecoin, it only came into existence in 2015, but it has quickly obtained interest for its potential use. That interest has increased Ethereum’s name recognition. Although it’s still not common to see Ether used as a payment method, that is steadily growing too.
Another factor worth considering in the debate is that Litecoin has a supply cap of 84 million coins, meaning that at some point in the future that cap will be reached. Ethereum, on the other hand, it releases the same number of coins into the system each year so its amount will continue to grow. The developers may one-day cap it, but that has yet to happen. The scarcity brought about by a limitation on the number of tokens could mean that Litecoin could end up being a more valuable cryptocurrency in the future. But these are just assumptions.
For now, in terms of the store of value, Ethereum may seem better. It has drawn interest from the wider cryptocurrency community, and despite its younger age, its growing name recognition and availability should drive it forward, making it easier to purchase, access, and spend.
Ethereum and Litecoin use proof of work consensus to reward miners. Ethereum awards three ether for each verified block(set to two after the Constantinople hard fork), and 25 LTCs in Litecoin’s case. The value of each coin is different based on the network, don’t make a judgment only based on its quantity. Verify the exchange rate for the coins and keep an eye on the trend of their prices to get a sense of actual reward value for each of the cryptocurrencies.
What else should we pay attention to in the debate of Ethereum vs Litecoin? Both Litecoin and Ethereum have their strengths in transactions. The transaction time in Litecoin is four times faster than Bitcoin, taking up to 2 minutes, while the general transaction speed for Ethreum is of 15 seconds. But there is no denying that both of them perform well as a transaction medium.
In short, Litecoin and Ethereum share differences and similarities, the combat between them can move from their function to their prices or other features. This concludes today’s article on the difference and similarity between Ethereum and Litecoin. We hope you learned a lot, enjoyed the read, and stay tuned for more great content.