Litecoin Vs Bitcoin: Which Cryptocurrency Is Better?

The last decade has had unprecedented technological growth. From banking and finance to internet speed and networking, every sector of digital life has seen transformative innovations. Even if you don’t follow tech news, you have probably heard of cryptocurrency and Bitcoin.

As blockchain technology has evolved, hundreds of cryptocurrencies are on the horizon. As a novice investor, deciding which cryptocurrency is better for you can be daunting. Litecoin and Bitcoin are two of the oldest and most importantcryptocurrencies with significant market share. We will compare the two in this article so you can make an informed decision.

Bitcoin

(BTC) is the oldest cryptocurrency, having been launched in 2009. Its success made cryptocurrency a legitimate factor in the financial landscape, and all cryptocurrencies owe their existence to Bitcoin.

Bitcoin is a peer-to-peer cryptocurrency, meaning that all transactions on the blockchain happen between two users without any intermediary. There is no need for any financial institution like a bank, and there are no intermediaries. Bitcoin is a decentralized financial system and Blockchain technology that acts as a public ledger recording all transactions.

The source of Bitcoin tokens are miners, who use powerful computers to solve complex mathematical puzzles. When a miner solves a puzzle, they add a block of grouped transactions on the blockchain and get BTC tokens in return.

As Bitcoin is a decentralized system, users can complete transactions without government censorship and control. As every transaction is recorded on the cryptographic blockchain, Bitcoin transactions are secure and resist tampering. Bitcoin has also connected the global world, eliminating the hurdles in international transactions. Anyone with an internet connection can participate on the blockchain regardless of geographical origin.

BTC also has inherent inflation-hedging mechanisms to ensure it always retains its value: there is a limited Bitcoin supply of around 21 million coins, which maintains its scarcity. The currency undergoes halving events frequently in which the total supply is reduced by half. Doing so ensures the currency remains scarce and its value remains high. One Bitcoin costs $27,000 as of now.

Bitcoin’s rate, like other cryptocurrencies, varies daily, so make sure to use an updated before withdrawing  your coins.

Despite its several advantages, Bitcoin has some limitations, too. It was the first cryptocurrency ever made, so it had limited scalability. The network can get congested, and high transaction fees are charged in peak periods. The number of transactions validated per second was also low: it took 10 minutes to generate a block on Bitcoin.

There were also concerns about Bitcoin’s environmental impact as its block generation required high energy. While newer cryptocurrencies like Litecoin have addressed these limitations, you will still face limited scalability and longer block times with BTC.

Litecoin

As Bitcoin’s limitations became obvious, technology developers scrambled to find a solution. In 2011, Charlie Lee developed an alternative to Bitcoin known as (LTC). As its name suggests, it was supposed to be a ‘lite’ version of Bitcoin, which fixed the issues inherent with Bitcoin while having a lesser value. It is often called the silver to Bitcoin’s gold.

Litecoin’s improvements stem from its Scrypt algorithm. While Litecoin and Bitcoin use a proof-of-work mechanism, Litecoin’s algorithm differs from Bitcoin’s. The different algorithm is less damaging to the environment and reduces block time. For Litecoin, the block time is just 2.5 minutes, four times less than that of Bitcoin. The lower block time results in the faster speed of Litecoin. However, this increased speed comes with a compromise on security.

Bitcoin is more secure than Litecoin, which makes it a good option for holding value, but Litecoin’s rate suits it for everyday transactions. Litecoin also has a higher currency supply, and itssupply cap is 84 million coins, four times that of Bitcoin. As a result, Litecoin is not as scarce as Bitcoin, which makes it more prone to loss of value than Bitcoin. At the time of writing this article, Litecoin’s price is just $67, significantly less than Bitcoin! However, Litecoin is still far more valuable than several other cryptocurrencies, cementing its status as the ‘silver’ of cryptocurrency to BTC’s gold.

Which Cryptocurrency Should I Choose?

Here are some common reasons for investing in cryptocurrency and whether Bitcoin or Litecoin is more suitable.

1. For Holding Value

A common reason why people invest in cryptocurrency is to hold the value of their assets. Fiat money is prone to inflation and quickly loses value over the years, so people have preferred to store their long-term investments in mediums other than fiat money. Traditionally, people invested in gold or precious metals to keep their wealth. In the digital world, Bitcoin occupies the same niche as gold did in the olden times.

Bitcoin is resistant to inflation as it is scarce, just like gold or precious metals. This scarcity makes Bitcoin the perfect cryptocurrency to hold value. It has a high market capitalization and is widely known, so it is not likely to lose its weight anytime soon.

2. For Everyday Transactions

Cryptocurrency has evolved as an acceptable currency in several countries of the world. You can use cryptocurrency to tip people and pay for goods almost universally online. Most states and countries are slowly relaxing their regulations on cryptocurrency, allowing individuals to do everyday transactions using crypto.

Litecoin is your friend if you want to invest in crypto for transactions. Its faster block time ensures your transactions are processed quickly without much hassle. If you pay for a product or service using Bitcoin, your transaction will not be validated for 10 minutes.

3. For Security

Several individuals prefer cryptocurrency because it is a secure money storage medium. Investing in cryptocurrency ensures protection against robbery and theft. As everything is publically available on the blockchain, disputes over your money are less likely to arise. However, you can get defrauded even if you store cash in cryptocurrency.

If your top concern is security, you should buy Bitcoin. Its hash power is higher than Litecoin, which means it spends more computational power to secure its blockchain and fend off potential attacks.

Endnote

Cryptocurrency is undoubtedly one of the most fascinating innovations of the digital era. Bitcoin is one of the most well-known cryptocurrencies, but other cryptocurrencies, such as Litecoin, exist. With many different cryptocurrencies in the market, investors often find it challenging to decide which crypto they should invest in.

If you want to invest in crypto to hold value or to keep your money secure, Bitcoin is more suitable. However, for microtransactions and everyday spending, Litecoin is better. Ultimately, the cryptocurrency you choose depends upon your requirements.

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