Last Updated on January 27, 2021 by Larious
Bitcoin had a lot of forks, but the very first was Litecoin. In this article, we are going to discuss the advantages and disadvantages of these two coins. If you are considering diversifying your portfolio with reliable altcoins, then this content is for you.
Is Litecoin just another bitcoin “clone”?
Yes and no. Litecoin is created based on the Bitcoin protocol. This is the same peer-to-peer network that consists of a chain of interconnected blocks. These blocks store information about transactions. It was formed due to the voluntary support of participants who provide their computing power for processing transactions and generating blocks.
The essence and purpose of Litecoin are similar to the tasks that its “older brother” was originally meant to solve. It should be a means of payment, more convenient, faster, and cheaper than regular national currencies.
The differences between BTC and LTC
- Different algorithms for forming the “building blocks” of the blockchain. While bitcoin works on SHA-256, Litecoin uses a script.
- Increased block generation frequency. On the Bitcoin blockchain, a new block appears every 10 minutes, while on the Litecoin network this process takes only 2.5 minutes.
- LTC mining will stop when the total number of mined coins reaches 84 million. The total BTC emission is 4 times less – 21 million.
Why is Litecoin better than Bitcoin?
To answer this question, we will take a look at the LTC to BTC chart and make a deep analysis of these two coins. LTC developers have never claimed to compete with the №1 cryptocurrency. On the contrary, they believe that Bitcoin will serve as the main digital coin. Litecoin will modestly take its place as a useful complement.
The faster the network processes payments, the fewer transactions accumulate. Consequently, transfers can be carried out quickly without increased commissions. Transferring LTC is still 3-5 times cheaper than BTC.
From 2013 to March 2017, the price of the coin showed amazing stability. It fluctuated in the $3-5 range almost all the time. However, everything changed in the spring of 2017. LTC was growing for several months until it crossed the $350 mark in December.
After the end of the last bull market, the rebound was sharp – in 2018, the coin fell to $30. After that, the coin traded at $100 for a long time. And in December 2020, it began to grow again and to date, the LTC rate is $148.
As a whole, the Litecoin rate repeats all the bends of the price chart of Bitcoin falling and growing. While BTC rose more than 100% from its previous high in early 2021, LTC hasn’t even made it to half.
Now it is difficult to forecast the future of Litecoin. Some experts predict a bright future only for Bitcoin. Others, on the contrary, are confident that the slowness of BTC will play into the hands of a more maneuverable and cheaper LTC.
If Bitcoin strengthens its position as digital gold and spreads as a means of payment, then the LTC rate will have a good chance to grow due to partnership agreements with companies, retailers, all kinds of online services, etc. The wider the circle of organizations that accept Litecoins, the higher the price.