Bitcoin and Litecoin both are digital currencies traded online as cryptocurrencies. For some time now, the trading in cryptocurrency has increased, and Bitcoin is the main focus where most investors put in their money. Being the first digital currency, Bitcoin has been a choice of several traders. Litcoin, on the other hand, is the ninth-largest traded cryptocurrency and has made a good impact in the market. Both currencies are good investment sources available in the Forex market. Through this article, we’ll get into details of Bitcoin and Litecoin and know what makes them different from each other. So, let’s get started.
Bitcoin
The first digital currency found in 2009 by Satoshi Nakamoto, Bitcoin works on whitepaper ideas. This digital currency traded online is a profitable investment source due to its low transaction fees compared to traditional payment methods online. Bitcoin is operated on decentralised technology, where there is no interference from the government or any other authority. The decentralised method based on blockchain technology is the best way to record and verify the transactions online. The investor’s transactions are all securely recorded in the public ledger, and the traders have transparent trading access.
Bitcoin is not a legal tender; still, it is popular globally and has launched several other cryptocurrencies called altcoins. The system of blockchain used in cryptocurrencies operates and creates blocks to store the transactions. So, the computers using the blockchain have the same blocks and transactions. This allows transparent access to the investors of Bitcoin to check the new blocks and Bitcoin transactions. The system altogether is referred to as cryptography that verifies the blockchain transaction and allows no theft and cheating of the investments online.
With ten thousand nodes, Bitcoin expands day by day and uses mathematical algorithms to encrypt the transaction and secure investors. Therefore, it is the best choice online for trading in virtual currency. The keys are used to keep the Bitcoin tokens that are the public and private keys. The public key is the address to which the investors send Bitcoin. At the same time, the private key is for authorised transmissions and a secret code. It is like that a public key is the account number, and the private key is an ATM pin of the transactions online.
Litecoin
Founded in 2011, two years after Bitcoin by Charlie Lee, Litecoin had been a great competition for Bitcoin. But as the Forex market is volatile, the situation changed, and Litecoin value decreased. In 2021, Litecoin, with its total capitalisation, stands at ninth position in the cryptocurrency market. Being a lite version of Bitcoin, Litecoin is regarded as the reaction of Bitcoin. It works similarly to other cryptocurrencies with some similar features as Bitcoin. It has a fixed supply of eighty-four million circulations in the crypto market.
Litecoin transactions are recorded every two point five minutes, and new blocks are generated with the ledger entry. Operating on the procedure of mining, Litecoins are verified by the mining software, recording the transactions. Available for individuals and institutions, Litecoins transfers funds in the accounts.
Difference between Litecoin and Bitcoin
Both Bitcoin and Litecoin share certain differences making them a choice for various traders. These differences help traders decide as per their needs which cryptocurrency they should be investing in.
Capitalisation
This is the most significant and primary variation between these two. In 2021 the total worth of Bitcoin stands at $1 trillion, and Litecoin is worth $13.7 billion. Bitcoin is seventy times higher than Litecoin and making Bitcoin the most traded currency. The uncertain market keeps the capitalisation changing over a period of time, so one can never say about the future without knowledge and analysis. Also, the other cryptocurrency value is lower than Bitcoin; this gives it an upper hand over all the traded currencies.
Distribution
The other variant is the distribution of the coins online. Here, Litecoin has dominance over Bitcoin as Litecoins can circulate eighty-four million coins, and Bitcoin can only circulate and produce twenty one million coins. Although infractions when divided, that is for Bitcoins, Satoshi, the minimum fraction amounts to one hundred millionth of Bitcoin. So, in the real world, Bitcoin fractions are more valuable than Litecoin’s.
Transaction Speed
Cryptocurrencies use the latest technology for the speed of transactions online, and both Bitcoin and Litecoin are best in executing the trades. Litecoin has a set goal of achieving the speed of transaction and is known for the same worldwide.
The transaction speed of Bitcoin as per the blockchain is nine minutes per transaction, whereas Litecoin speeds at two point five per minute. For Bitcoin, the speed varies according to the traffic of transactions online..
Algorithm
Cryptography is the fundamental difference between the two; Bitcoin uses the SHA-256 algorithm, and Litecoin uses the Scrypt algorithm. Scrypt is the new technology for trading online. These algorithms help in the procedure of mining the currency online.
SHA-256 algorithm allows a greater degree of parallel processing compared to Scrypt but is complex to use. In contrast, Scrypt is less susceptible, making it more acceptable for investors.
Similarities of Bitcoin and Litecoin
Both the coins belong to the same market sharing common trading facilities. The basic of all is the use of decentralised methods of trading cryptocurrencies. Other than this, both the currencies use cryptography technology involving no mediator like government or banks. Also, during its launch in the market, Litecoin was labelled as the lite version of Bitcoin, making it similar from the start. Thus, leading to the same features of Litecoin as Bitcoin.
The proof of work is similar for both as they use authenticity for the mining process and record and verify the transactions through blocks. Lastly, the storage and transaction of Bitcoin and Litecoin are similar. Both are bought and transacted through exchange and mining processes. The currencies require a digital wallet for transactions as well, making them quite similar to trade.
Conclusion
Bitcoin and Litecoin are excellent choices for traders in cryptocurrency trading. An investor must consider them to trade in cryptocurrency. They both share similarities and are different, and the trader has a choice to decide one as per the need. The two have ample opportunities for digital currency trading and have profits. I would suggest these two as a good option in the crypto market. Keep trading.
