Bitcoin vs. Litecoin: 2 Reasons Litecoin Better Than Bitcoin

Bitcoin and Litecoin are among the oldest, yet most popular cryptocurrencies. Both coins have similarities and differences. And while Bitcoin is unarguably perceived as the better asset, Litecoin still has some advantages over it, which we emphasized later in this article. Before that, let’s quickly look over the interesting things that made up the history of the two cryptocurrencies. 

Bitcoin

Bitcoin was launched in 2009 by Satoshi Nakamoto as a decentralized digital currency for peer-to-peer payments based on a public distributed ledger technology called Blockchain. This meant that Bitcoin was created as a public financial tool, owned by no single entity, and cannot be controlled like physical money by the governments.

A year after Bitcoin was publicly released, the creator disappeared. During the early development stage of the cryptocurrency, Satoshi Nakamoto actively posted on BitcoinTalk Forum. However, he suddenly disappeared on December 13th, 2010, after making the last post on December 12th. 

To date, the creator of Bitcoin remains a mystery. Speculations are that Satoshi Nakamoto is either a person or a group of people. Some also claimed that Satoshi Nakamoto could be dead, hence the disappearance. Over the years, several people like Craig Wright have claimed to be Satoshi, but cryptocurrency enthusiasts are not buying into such claims.

Litecoin

Litecoin was created in October 2011, which is about three years after Bitcoin’s inception. The cryptocurrency shares some characteristics with Bitcoin because it was originally forked from the Bitcoin blockchain. However, a few modifications were made to the Litecoin blockchain, which made it better in some areas where Bitcoin lagged. For that reason, Litecoin was fondly referred to as the “silver to Bitcoin’s gold.”

Unlike Bitcoin, Litecoin has a known creator called Charlie Lee. Mr. Lee is a computer scientist who previously worked for Google before joining Coinbase in 2013. He picked interest in cryptocurrency around 2011, which led him to create the whitepaper for Litecoin later in the year, which inspirations by the Bitcoin codebase. 

Lee currently works as the managing director of Litcoin Foundation, the organization overseeing the development of Litecoin. In 2017, Lee admitted that he sold all his Litecoin possessions, citing a “perceived conflict of interest.” That declaration had a big blow on the price of Litecoin. 

Reasons Litecoin is Better Than Bitcoin

There are two remarkable aspects in which Litecoin is better than Bitcoin, which is currently the largest cryptocurrency by market. 

Transaction Speed and Cost

Litecoin is better than Bitcoin in transaction speed and cost. Making transactions on the Litecoin blockchain is faster and cheaper than the latter, thanks to the fundamental improvements that led to the fork. This is the major reason Litecoin is touted as an ideal digital currency for payment over Bitcoin.

Millions of merchants worldwide are currently accepting payments in Litecoin. About a year ago, more than 600,000 merchants were introduced to crypto payments following a partnership between Verifone and BitPay. Using the cryptocurrency processing company, Verifone’s merchants can send and receive payments with Litecoin, among other cryptocurrencies.

Of course, this doesn’t mean that Bitcoin cannot be used for payment purposes. Billions of dollars are transacted on the Bitcoin network daily. However, many people often choose Bitcoin as a store of value rather than a payment currency because it’s not the percent payment option for small transactions, like paying for coffee, etc. 

Mining

Mining has become a popular activity in cryptocurrency, where people are rewarded for active participation in the security of a blockchain. The concept of mining is common for cryptocurrencies that use the Proof-of-Work (PoW) consensus mechanism, like Bitcoin and Litecoin. 

But the mining algorithm used in Bitcoin is such that the startup cost and entry barrier are very high for regular people to compete or participate. Nowadays, a Bitcoin miner needs a number of advanced ASIC mining rigs in order to compete profitably on the blockchain against a swarm of similar machines operated across the world. 

Litecoin cuts the hassle with a different mining algorithm called Scrypt (to be discussed later in the article) which doesn’t require advanced machines or high computational power. Anyone can participate in Litecoin mining using their home computers, which is the beauty of Scrypt.

Similarities Between Bitcoin and Litecoin

Decentralization

Decentralization is one major thing both Bitcoin and Litecoin share in common. The cryptocurrencies are based on blockchain technology and so are inherently decentralized. This entails that the control and decision-making are handled by the public – node operators and miners – rather than a centralized body like Facebook, PayPal, and financial companies. 

Also, transactions on the network cannot be manipulated or tampered with because of the blockchain. Not just Bitcoin and Litecoin, these are particularly the advantages blockchain-based cryptocurrencies have over traditional payment systems like PayPal. 

Consensus Mechanism

The consensus mechanism is the standardized method by which blockchain networks achieve trust, agreement, and security. Bitcoin and Litecoin are based on the same consensus mechanism, which is Proof-of-Work. Both cryptocurrencies use Proof-of-Work to verify and map transactions on the block through the process of mining.

For every block successfully mined, the miner will be rewarded some units of the cryptocurrency depending on the blockchain – BTC for Bitcoin or LTC for Litecoin. Mining is the only medium by which new BTC or LTC are issued into circulation in the market.

Difference Between Bitcoin and Litecoin

Market Capitalization

Market capitalization – a factor of current price and a circulating supply of an asset – is the first obvious area where Bitcoin and Litecoin are different. Bitcoin’s market capitalization is higher than Litecoin’s, thanks to its market price. With Bitcoin currently trading at $19,181 per coin, its market cap sits around $368 billion – the largest across the cryptocurrency market. 

Litecoin’s market cap is only about $3.17 billion at a current price of $51.82. There are 71.4 million LTC in circulation and 19.1 million BTC in circulation.

Mining Algorithm 

Although Bitcoin and Litecoin fall under the Proof-of-Work category, both blockchains use different mining algorithms or hashing functions. Bitcoin uses the SHA-256 hash function, while Litecoin runs on the Scrypt algorithm.

SHA-256 is a more complex mining algorithm that requires high computational power. This is why miners need highly-advanced machines, like the ASIC miners, to participate in Bitcoin’s transaction validation and compete for block rewards in the form of new bitcoins. Scrypt is just the opposite per se. 

Litecoin’s Scrypt does not require high processing power, unlike SHA-256. As such, the entry barrier to Litecoin mining is low because it’s less expensive for people to start. Although there are machines compatible with Scrypt, anyone can still run the Litecoin mining software on their home computers for some fractions of the coin.

Transaction Speed

As mentioned earlier, the transaction speed on Litecoin is faster compared to Bitcoin. Payments and transactions on Litecoin are processed in about 2.5 minutes, which is why many people prefer Litecoin for payment over Bitcoin. Transactions on the Bitcoin blockchain are processed within 10 minutes – the average block time but can be longer depending on the level of activities on the network. 

Distribution

Supply is another aspect that sets a clear difference between Bitcoin and Litecoin. Although Litecoin was forked from Bitcoin, the maximum supply was raised is 87 million, which is the total number of LTCs that will ever exist. Meanwhile, Bitcoin has a lower supply of 21 million, which is more appealing for investors because less supply can result in scarcity, which is favorable to the price. 

Halving

Halving is designed to periodically reduce the inflation or rate of issuance of coins. On Litecoin, halving happens every 840,000 blocks, which is approximately four years. The next Litecoin halving is expected to happen at exactly 2,520,000 blocks on  27 August 2023. This will slash the current block reward of 12.5 LTC by half to 6.25 LTC.

Bitcoin’s halving occurs at every 210,000 blocks, which is also about four years. The next Bitcoin halving event is scheduled at 840,000 blocks on 20 May 2024, which will reduce the current block reward by half from  6.25 BTC to 3.125 BTC. 

Approximate ROI

The approximate return on investment for Bitcoin and Litecoin are significantly different when comparing their earliest known prices. If you purchased and held some bitcoins at $134 in 2013, your holdings would have been up by 14223.13% ROI at the current market price. 

Meanwhile, if you had purchased and held some Litecoins at $4.4 in 2013, your holdings would have gained 1084.773% ROI at the current market price. 

Is Litecoin a Good Investment?

Litecoin is good for payment but not ideal as a store of value. With massive demand, the price of Litecoin may continue to increase in the future, according to Digital Coin Price. 

Litecoin Price Prediction for 2022

Litecoin is predicted to reach a maximum of $64.04, a minimum of $44.84, and an average of $52.70 in 2022.

Litecoin Price Prediction for 2023

Litecoin is predicted to reach a maximum of $94.69, a minimum of $77.95, and an average of $85.16 in 2023.

Litecoin Price Prediction for 2024

Litecoin is predicted to reach a maximum of $121.01, a minimum of $102.89, and an average of $110.74 in 2024.

Litecoin Price Prediction for 2025

Litecoin is predicted to reach a maximum of $146.99, a minimum of $127.06, and an average of $136.33 in 2025.

Litecoin Price Prediction for 2026

Litecoin is predicted to reach a maximum of $156.41, a minimum of $136.40, and an average of $145.25 in 2025.

Litecoin Price Prediction for 2027

Litecoin is predicted to reach a maximum of $174.36, a minimum of $154.78, and an average of $168.83 in 2027.

Litecoin Price Prediction for 2028

Litecoin is predicted to reach a maximum of $203.86, a minimum of $182.85, and an average of $191.92 in 2028.

Litecoin Price Prediction for 2029

Litecoin is predicted to reach a maximum of $245, a minimum of $223.48, and an average of $232.70 in 2029.

Litecoin Price Prediction for 2030

Litecoin is predicted to reach a maximum of $299.92, a minimum of $278.29, and an average of $287.67 in 2030.

Litecoin Price Prediction for 2031

Litecoin is predicted to reach a maximum of $369.90, a minimum of $348.25, and an average of $357.72 in 2031. 

Is Bitcoin a Good Investment?

Bitcoin Price Prediction for 2022

Bitcoin is predicted to reach a maximum of $23,567, a minimum of $16,481, and an average of $19,911 in 2022. 

Bitcoin Price Prediction for 2023

Bitcoin is predicted to reach a maximum of $34,704, a minimum of $28,649, and an average of $31,707 in 2023.

Bitcoin Price Prediction for 2024

Bitcoin is predicted to reach a maximum of $44,448, a minimum of $37,829, and an average of $41,112 in 2024. 

Bitcoin Price Prediction for 2025

Bitcoin is predicted to reach a maximum of $53,849, a minimum of $46,742, and an average of $50,212 in 2025. 

Bitcoin Price Prediction for 2026

Bitcoin is predicted to reach a maximum of $56,925, a minimum of $50,173, and an average of $53,420 in 2026.

Bitcoin Price Prediction for 2027

Bitcoin is predicted to reach a maximum of $63,851, a minimum of $56,930, and an average of $60,394 in 2027.

Bitcoin Price Prediction for 2028

Bitcoin is predicted to reach a maximum of $74,658, a minimum of $67,222, and an average of $70,903 in 2028. 

Bitcoin Price Prediction for 2029

Bitcoin is predicted to reach a maximum of $89,865, a minimum of $82,141, and an average of $85,959 in 2029.

Bitcoin Price Prediction for 2030

Bitcoin is predicted to reach a maximum of $110,201, a minimum of $102,283, and an average of $106,091 in 2030. 

Bitcoin Price Prediction for 2031

Bitcoin is predicted to reach a maximum of $135,939, a minimum of $127,999, and an average of $131,931 in 2031.

Bitcoin vs. Litecoin: Which is Better?

Both Litecoin and Bitcoin can make a good investment, as seen from the predictions, but it boils down to your interest. If you want cryptocurrency for frequent transactions and payments, then Litecoin is a good option since the processing time and fees are incredibly better than Bitcoin’s.

However, if you are looking for a store of value, then bitcoin is a no-brainer. There is more such interest in Bitcoin from retail and institutional investors than there is in Litecoin.

Frequently Asked Questions (FAQs)

How many Litecoins are left?

There are currently 12,539,507 Litecoins left to be mined, which is about 25% of the total supply. The maximum supply is 84 million, and about 71.468 million Litecoins are currently in circulation. 

Is Litecoin cheaper than Bitcoin?

Yes, Litecoin is cheaper than Bitcoin. Presently, the price of Litecoin is around $52 per coin, while Bitcoin’s price is around $19,338 per coin. This is a difference of $19,286 from Litecoin’s price. 

Will Litecoin follow Bitcoin’s Price?

Probably. Most cryptocurrencies are correlated with Bitcoin’s price to a large or small degree due to Bitcoin’s market dominance. Thus, we can expect Litecoin to increase if Bitcoin rises too. 

Is Dogecoin better than Litecoin?

The answer to whether Dogecoin is better than Litecoin may vary for every crypto investor based on their interest. Dogecoin was designed as a meme cryptocurrency, while Litecoin was made to facilitate faster and cheaper payments. 

What future does Litecoin have?

As crypto adoption rises across the world, several cryptocurrencies like Litecoin could gain a huge spot in the future, especially in the area of digital currency payment. With the demand, Litecoin’s price and market capitalization are more likely to increase. 

Why is Litecoin still cheap?

Litecoin is cheap because of the low demand from users. Moreso, the supply of Litecoin is high compared to Bitcoin. The price of an asset is more likely to increase in the presence of demand and low supply. 

Is Litecoin faster than BTC?

Yes, Litecoin transactions are faster than BTC. The Litecoin blockchain has an average block time of 2.5 minutes, while Bitcoin has around 10 minutes. 

Is Litecoin the new Bitcoin?

Not yet. Litecoin is the “silver to Bitcoin’s gold” and is commonly used as a payment currency. But if investors start seeing Litecoin as a store of value, then can it compete closely with Bitcoin?