What’s the difference between Bitcoin and Litecoin? After the launch of Bitcoin in 2009, a few other cryptocurrencies were launched to compete for success in the crypto world.
Because Bitcoin is open-source, it can be freely changed and used as a basis for different projects. Therefore, several later cryptocurrencies were altered versions of this code, and each of them had different levels of success.
Among them, Litecoin was the most successful. And given the many similarities, there are also significant differences between them.
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Bitcoin and Litecoin: What is Litecoin?
It was the year 2011 and then software engineer Charlie Lee was working for Google when he knew everything about Bitcoin and was totally fascinated.
Being a software developer, he decided to enter the project, open-source, downloaded everything and started to analyze the way it was programmed. That is, he analyzed the code that makes Bitcoin work.
Without a doubt, he was even more impressed by the robustness of the project and convinced of the potential of cryptocurrency. Such was his interest that he decided to get more involved and at the same time identified some aspects that he disagreed with the way Bitcoin was created and how it works.
That’s why he made the decision to write his own code, based on the original. Already in 2013, he gave up an excellent position he had at Google to devote himself full time to managing and promoting the use of Litecoin.
That’s how what many call Bitcoin’s little brothers began to take shape. Although actually this denomination is more because it came up in a second instance, in second place and not because this cryptocurrency is less robust or less useful.
Many users are preferring Litecoin over Bitcoin, and it will become clearer why when we analyze and contrast the features of both below.
Differences between Bitcoin and Litecoin: Number of Units
In the first instance, as we have mentioned, the limit of Bitcoin units that will go into circulation and be created is a total of 21 million.
Although this is a desirable feature, this is a necessary feature in order to be able to use something as a viable means of payment, Charlie Lee determined that the amount was still too limited for the enormous number of pressures that are potentially going to be placed on these crypto-currencies once they reach their maximum potential.
So, Charlie decided that for the cryptocurrency he was creating the limit of units would be much higher, leaving the figure at an impressive 84 million units of Litecoin.
There are more possibilities besides giving Bitcoin users motivation to use Litecoin as well or even for people who have never used crypto-currency to opt for Litecoin as an input.
Reduced block checking time
As we said earlier, Charlie also worked on rewriting parts of the code that he disagreed with or that he thought could be improved, so he identified that it takes an average of 10 minutes for a transaction block to be confirmed and incorporated into the blockchain for Bitcoin.
Charlie, observed and identified this as an area of opportunity and that coincides with many merchants who want the time to be shorter so the creator of Litecoin managed to reduce the checking time from 10 minutes to about 2.5 minutes on average.
Once again, this raises an issue for many players who want to use crypto-currency and by players, we mean both businesses that want to enable their customers to be able to use crypto-currency and thus attract more business to their online portals and physical stores.
But also by actors, we mean people who do not have access to traditional financial services and who have seen all the advantages of using cryptocurrencies instead of traditional currencies.
This is very convenient for businesses as well because when a customer makes a payment transaction, they get this confirmation in much less time and thus have the certainty that the payment was made and has been recorded in the big Bitcoin and Litecoin trade book.
Mining: Different Algorithms
Nowadays it has become very difficult for normal people to perform mining, due to the complexity of the working test algorithm used by Bitcoin.
The algorithm that is used is very robust and in fact, the logic of this algorithm is identified with the SHA-256 code but what has happened is that large groups or even companies that have been created specifically to mine Bitcoin have invested large amounts of money in traditional computers or even in chips specially designed and assembled to carry out mining and thus be the first to confirm the blocks and have all the currency units that are generated with the process.
These groups have been so successful that it simply becomes impossible for other people to mine coins because we can never invest thousands of dollars to acquire this advanced computer equipment.
All of us who do not have access to this type of monetary resource buy crypto-currencies from these large organizations and they do not sell them at a certain premium to recover the investment they made.
Charlie identified this weakness and even as many mention injustice that has been happening with Bitcoin.
So he decided to generate a different algorithm that should be used as a working test to be able to mine Litecoins.
That algorithm is known as the Script algorithm and it allows to level the situation so that it is easier for anyone to mine Litecoin units and thus more users are interested in obtaining the cryptocurrency and obviously in using it, which ultimately also increases its value.
Charlie’s project took on even more strength when Warren Togami joined.
Warren is one of the founders of the Fedora project, in charge of developing the Linux-based operating system that bears this name and whose importance is enormous worldwide so once again it reinforces one of the reasons why people are using more and more Litecoin.
This cryptocurrency is supported by prominent members of the most respected organizations of today.
According to CoinMarketCap, Bitcoin’s market capitalization today, July 2019, is about $171,515,368,595 million, although far from the December 2017 high of $326 billion, it is still the most valuable currency in the crypto market.
On the other hand, despite being the fourth largest currency in terms of market value at $5.7 billion, Litecoin still has a long way to go to get closer to Bitcoin.
Anonymity vs. presence
Finally, as another point that might not appear as relevant as the previous one but is definitely worth emphasizing since for some people if it is a factor when taking the issue of which cryptocurrency they want to start using, it is the fact that the creator of Bitcoin has decided to remain anonymous and that raises in these people or even in some authorities suspicions.
There is a belief, or some people believe, that some scandal, for example, the news reports about the person or group of people who created Bitcoin, can cause a decrease in the value of cryptocurrency.
Read also: 14 Myths About Bitcoin: Truth or Lie?
In fact, the opposite may be true, and when the creator or creators of crypto-currency are actually revealed, the value of cryptocurrency will increase.
Going back to the main issue, we have to say that the creator of Litecoin has clearly identified himself as Chalie Lee, and he has recognized this and is proud of this creation.
Charlie gives interviews and disseminates his knowledge so that anyone interested can use Litecoin or even join his project.
There are a lot of people who are reassured by this fact and therefore trust and use Litecoin instead of Bitcoin.
Charlie is a visionary and lets the world see how far cryptocurrencies and the economy, in general, will go with the following sentence:
“I firmly believe that just as the internet has revolutionized information, the power of cryptocurrencies will revolutionize the economy and traditional currencies.”