Over the past several years, public interest in cryptocurrencies has increased dramatically, with Bitcoin remaining the center of attraction.


In brief:

Bitcoin and Litecoin share a lot in common. Yet both cryptocurrencies differ from each other in some important respects. In near future, we can see both the coins complimenting each other on a long run.

Over the past several years, public interest in cryptocurrencies has increased dramatically, with Bitcoin remaining the center of attraction. Though bitcoin still remains the largest digital currency by share of market cap, other currencies have also started entering the scene. Among these, one name which is increasingly catching the attention is Litecoin.

With a number of parameters available, it is quite easy to compare two stocks to find out the relatively better value buy. However, there are no time-tested parameters, when comes to the crypto world to find out which are promising and disruptive in nature. So an investor who wants to invest in cryptocurrencies has to use some simple traditional techniques which require normal IQ level before making any decision.

Charlee Lee introduced Litecoin as “silver cryptocurrency” when Bitcoin took the name of “Crypto gold”. On the surface, Bitcoin and Litecoin share a lot in common. Yet both cryptocurrencies differ from each other in some important respects. Here are some reasons why Litecoin may prove to be equally good or even better than bitcoin in the future.

1. Deflationary in nature

Both Bitcoin and Litecoin are deflationary in nature, with the supply set to taper in the next few years. This can simply be understood by the demand-supply logic in basic economics. If nothing catastrophic is going to happen in the crypto world, then the demand for both these coins will increase while supply will be tapered in coming years. However, there’s a difference between the two. Bitcoin will have 21 million coins in its entire lifespan. While, Litecoin has a lifetime cap of 84 million coins, which is four times higher than the total number of Bitcoins that can be mined. This means that as demand increases, there will be a larger supply of Litecoins to meet it, at least initially.

Notably, in past, secure storage was given less important by people and as such millions worth coins were lost which cannot be recovered by any chance. For this reason, both of these coins are considered deflationary in nature. At present, the supply of Bitcoin is nearly 16.4 million whereas Litecoin has 51.85 million coins in circulation. Charlee Lee, the Litecoin founder, said, “When I released Litecoin there were a lot of other cryptocurrencies that were pre-mined by founders wanted to be super rich. I preannounced Litecoin on Bitcointalk, so people could mine it from the get-go. It was more widely distributed from the start than Bitcoin.”

2. Faster payment confirmations

Litecoin is faster than Bitcoin as block generation time of Bitcoin is 10 minutes while Litecoin is 2.5 minutes. This means that transactions are confirmed 4 times faster in Litecoin. However, the drawback is you’d need 4 Litecoin confirmations to reach the same level of security as Bitcoin.

Moreover, since the value of Bitcoin is high, Litecoin could be a useful medium of exchange for small transactions in particular, as the fees will likely be substantially lower than those for Bitcoin. For investment purposes, this means that users will spend less money paying to buy or sell Litecoin than they would for Bitcoin.

3. Mining is easier in Litecoin

Both, Litecoin and Bitcoin are based on “Proof of Work” concept when it comes to their mining operations, however, the algorithms that the two blockchain systems use are quite different. Bitcoin is using SHA-256 and Litecoin is using the scrypt algorithm. Litecoin’s mining algorithms are significantly simpler than those of Bitcoin, meaning it can be mined on computers which are less powerful and that it will take less energy. In view of the fact, that mining operations around the world take up massive amounts of electricity, this could prove to be a major advantage for Litecoin miners.

4. Litecoin is more adaptive to technical up-scaling

As compared to Bitcoin, Litecoin is well ahead in adopting new improvement plans. Segwit is already activated in Litecoin that basically doubles the capacity of any network it is activated on. So, right now, Litecoin has Segwit activated and Bitcoin does not. Now, the team behind Litecoin is working on two projects, Lightning network and adding smart contracts. Perhaps, Litecoin will be the first crypto to implement Lightning Network which would increase the scalability of transactions. Once this gets implemented, the number of transactions per second can grow to millions. Also, the team has shown its interest in anonymous smart contracts. These two projects can revolutionize the future of Litecoin if executed effectively.

All of these key differences between Bitcoin and Litecoin point toward certain advantages that Litecoin might have over its bigger peer when it comes to investments. However, at present, Litecoin is undervalued when compared with Bitcoin.

“Litecoin versus Bitcoin is like Facebook versus Google Plus. It would be hard for Plus to overtake Facebook. But if something catastrophic happens to Bitcoin, I could see Litecoin positioned to overtake it,” says Charlee Lee, Litecoin founder.

On the privacy side, both Bitcoin and Litecoin have the same features. Though Litecoin has more features, Bitcoin is by far the easiest cryptocurrency to buy as every crypto exchange supports Bitcoin. The Bitcoin price is obviously higher than Litecoin, and so is its market cap. The major factor which differentiates Bitcoin from Litecoin is its popularity. Litecoin is still not in limelight like Bitcoin or Ethereum. But this can change in near future and we can see both the coins complimenting each other on a long run. Now, Litecoin is emerging as another digital currency that investors would be wise to consider.


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