Since its inception in 2009, Bitcoin has become synonymous with the word Crypto for most part of a decade. It created an entirely new asset class used by various retail and institutional investors today. It was the first time since gold that an asset had its intrinsic value and was based on a scarcity-driven model.
But Bitcoin’s effects were not just limited to creating a new asset class. It inspired many innovators to come up with various Crypto tokens which had unique applications. One such application which was the product of a hard fork of the Bitcoin blockchain is Litecoin. A hard fork is when a disagreement occurs on the Blockchain network and as a result of that, the Blockchain splits, thereby creating a new chain represented by a new token.
What is Bitcoin
Bitcoin was created by Satoshi Nakamoto in the wake of the 2008 global financial crisis. It was created as an alternative to traditional finance. Bitcoin transactions are recorded on the Bitcoin blockchain which is an open-source decentralised ledger. The bitcoin blockchain is also immutable, meaning that transactions recorded on the blockchain cannot be erased.
What is Litecoin
Litecoin is a Crypto token launched by Charlie Lee in 2011. It was aimed at removing the limitations of Bitcoin. The first meteoric rise of Bitcoin( BTC) price during 2009-11 saw several first movers trying to get their hands on the asset.
During this rise, it became increasingly difficult to mine Bitcoins because of the rising computational power required during the Proof-of-Work consensus mechanism. Bitcoin mining infrastructure known as Application-Specific Integrated Circuits (ASIC) became increasingly expensive. It became harder for ordinary crypto enthusiasts to engage in Bitcoin mining. Increasing costs also meant that fewer people can purchase the infrastructure which could lead to centralisation.
Litecoin was created to overcome this limitation of infrastructure cost and centralisation by using a mining algorithm called Scrypt.
Read more: Proof of Work vs Proof of Stake
Key Differences Between Bitcoin vs Litecoin
While mining algorithms and infrastructure cost are two key differences, many other features set them apart.
|$ 385 billion
|$ 3.8 billion
|Blockchain transaction speed
|10 minutes to confirm a block on the Blockchain
|2.5 minutes to confirm a block on the Blockchain
|Mining hash rate
|Comparatively higher than Litecoin
|Lower than Bitcoin
Is Litecoin Better Than Bitcoin?
While we have glanced at the key differences between Bitcoin and Litecoin, now comes the big debate of which token is better. While Litecoin started with the aim to ensure affordable mining infrastructure to ensure decentralisation, mining manufacturers were successful in manufacturing Scrypt ASCI mining infrastructure. Litecoin now seems to be more concentrated with the majority of mining taking place from a handful of mining pools.
Read more: How Do Miners Earn Block Rewards?
On the other hand, Bitcoin has a reputation like no other Crypto token. It is dubbed “Digital gold” and has been a formidable asset since its inception. Bitcoin’s blockchain is also more secure than Litecoin’s because of its high hash rate. A higher hash rate means more computational power is required to carry out a 51% attack. Right now the Bitcoin blockchain is highly resistant to any hacks.
Solutions like the Lightning Network also solve the scalability problem of the Bitcoin Blockchain. If the Bitcoin blockchain succeeds in improving the transaction throughput, we could see Bitcoin being used for everyday transactions.
Both Litecoin and Bitcoin have been around for more than a decade. Bitcoin is the clear winner when it comes to aspects such as decentralisation, blockchain security, popularity and adoption. Litecoin performs better than Bitcoin with respect to transaction speeds on its blockchain. While the layer 0 level of Bitcoin is comparatively slower, the lightning network of Bitcoin solves this problem.