Government regulations , economic conditions, government-sponsored cryptocurrency, and more can also affect cryptocurrency. It's possible that technological advancements could even render cryptocurrencies obsolete. This is largely due to consumer and investor perspectives—if a means of exchange can purchase more goods, it is worth more. If a commodity or investment has a higher value for people, they will pay more for it. Bitcoin is currently perceived to be a more valuable asset, so it is worth more.
Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author does not own Bitcoin or Litecoin.
Bitcoin Forum. Litecoin Wiki. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. Bitcoin vs. Litecoin: An Overview. Key Differences. Litecoin vs. Bitcoin FAQs. Cryptocurrency Bitcoin. Part of. Guide to Bitcoin. Part Of. Bitcoin Basics. Bitcoin Mining. How to Store Bitcoin. Bitcoin Exchanges. Bitcoin Advantages and Disadvantages. Other Cryptocurrencies.
Bitcoin Value and Price. Litecoin: An Overview Over the past several years, public interest in cryptocurrencies has fluctuated dramatically. Both Bitcoin and Litecoin are cryptocurrencies that use the proof-of-work consensus mechanism. Litecoin can produce a greater number of coins than Bitcoin. Bitcoin's market cap remains much higher than Litecoin's. Is Litecoin Better Than Bitcoin? How Many Litecoins are Left? Does Litecoin Have a Future?
Why Is Litecoin So Cheap? Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Jan 13, Oct 21, Ethereum comprises of smart contracts, computer codes running on top of a blockchain and containing a set of rules, that act as blueprints enabling developers to build decentralized applications DApps.
In the mining process, 5 ether are awarded for every verified block. Similarities between Litecoin and Ethereum. Both have a faster transaction time than Bitcoin. Both use the proof-of-work POW consensus mechanism.
Ethereum uses Ethash, whereas Litecoin Scrypt. The idea behind POW is for miners to utilize their computational power to tackle cryptographically difficult puzzles. As a result, the miner who solves the problem by adding a new block to the blockchain is rewarded for the same. Both can be traded on many crypto exchanges. Both support smart contracts.
Differences between Litecoin and Ethereum. Litecoin is mainly seen as a mode of payment or currency as it serves as an alternative to Bitcoin. Conversely, Ethereum is primarily viewed as a smart contract platform needed in developing decentralized applications DApps. For every block mined in Litecoin, 25LTCs are awarded. On the part of Ethereum, 5 units of ether are awarded. The block time for Ethereum is 15 seconds, whereas that of Litecoin is 2.
This is founded on its capability to transfer value, store data, and develop many features. Litecoin was launched in , whereas Ethereum in Ethereum has the capability of crowdsourcing funds for new projects, but this is not possible with Litecoin.
Litecoin has a cap on the number of coins released because once it is reached, no new coin flow into the system. Ethereum has a different model as the same number of coins are released into the system every year. Final thoughts. Should you buy Litecoin or Ethereum? Based on the above information, you may be torn between buying Litecoin or Ethereum. Notably, Litecoin was launched earlier making it have more payment utility as compared to Ethereum.
Conversely, Ethereum is more than just a mode of payment as it serves as a smart contract platform. So here is the catch, you should invest in both based on the unique possibilities they render. Expressly, Litecoin is beneficial when it comes to daily transactions, for instance, it is accepted by major retailers as a payment mode. On the other hand, Ethereum is instrumental in the development of a decentralized ecosystem making it loved by developers based on its ability to transfer property.
Here are the major takeaways:. Be a faster version of Bitcoin for transactional purposes. Be a decentralized platform to power DApps across the world. Block Reward. Consensus Algorithm. POW using Scrypt. POW using Ethash. Block Time.
As such, they are considered to be the pillars of the crypto community. One of the reasons they are so popular is their underlying blockchain technology. It enables peer-to-peer transactions and eliminates the need for control from governments or other centralized financial institutions. Bitcoin and Litecoin markets behave according to supply and demand. The absence of intermediaries makes transactions quick and easy with, minimal fees, and eliminates third-party frauds.
Both currencies represent global, digital payment methods with the purpose of making online financial transactions transparent and secure. Blockchain, which is a decentralized publicly distributed ledger, contains encrypted records of every transaction that has ever been made, thus contributing to data security. These considerations make Bitcoin and Litecoin very attractive. Finally, another reason for the popularity of both cryptocurrencies is the potential of quick and easy profits that they bear.
The past several years have shown investors a simple way to multiply wealth, causing constant growth in the number of followers. Bitcoin is the first blockchain-based cryptocurrency, so it stands apart from all other projects that have subsequently appeared. As a result, altcoins often use different protocols and encryption algorithms, with Litecoin and Ethereum taking ranks among the most well-known. The key points that differentiate them from each other are mining algorithms, the block generation time, the total number of coins, transaction speed, market capitalization, and price differences.
Bitcoin, Ethereum, and Litecoin use different cryptographic algorithms, which influence how new coins are created. With SHA, the bigger the network, the higher the difficulty of finding a new block, and thus the higher energy consumption. Bitcoin mining requires the use of expensive mining devices called Application-Specific Integrated Circuits ASICs , which are expensive and consume a lot of energy.
As a result, standalone miners can no longer make profits, having to join mining pools. Scrypt, by contrast, was designed to allow anyone with a personal computer to mine Litecoin. With Litecoin, end-users still have a chance to get profits as standalone miners. Bitcoin and Litecoin are similar in terms of using a Proof of Work PoW consensus mechanism for mining. The process of mining means using high-powered computers and special hardware to solve complex puzzles, necessary to validate transactions and generate new blocks.
The first miner, or node, to confirm the block is rewarded with new coins. The transactions are recorded on a public ledger, which is also stored by nodes. Ethereum blockchain has obviated the need for mining now that it has switched to the Proof of Stake consensus algorithm. The participants stake their coins in the system and everyone has a fair chance of getting a reward, depending on the size of the stake. Another way in which the three cryptocurrencies differ is the transaction speed.
Bitcoin network can process just 4—5 transactions per second TPS on average, and 7 at maximum. It takes approximately 10 minutes to create a new block. As for the Litecoin network, its speed is 56 TPS, and it takes 2.
However, this improvement has a drawback in the form of the so-called orphaned blocks which occur when two miners produce blocks at the same time. Ethereum 2. Currently, its speed is 12—15 transactions per second on average, confirming blocks every 15 seconds. One of the biggest issues of the Bitcoin network is related to the lack of scalability.
The more users try to send funds over the network in a given moment of time, the more congested it becomes. As transaction fees are defined on the basis of an auction, those who make higher bids get their transactions confirmed.
This leads to high network fees and longer confirmation times. Though Litecoin suggests much lower fees, it still has the same problem. To speed up transaction time and lower transaction costs, Bitcoin and Litecoin have implemented some scalability improvements. Among them are SegWit , which increases the block size limit by pulling signature data from transactions, and the Lightning Network, which keeps the transaction data off the blockchain. Ethereum blockchain does not have this problem.
Now that it has finally switched to PoS, the problem of scalability is no longer relevant for this network. Litecoin and Bitcoin have a preset coin limit on the amount miners receive for validating transactions. Once they reach their supply limits, no new coins will be issued. According to a predefined protocol, the Bitcoin supply is limited to 21 million BTC to prevent inflation.
On average, new Bitcoins are being mined per day. With Bitcoin halving occurring every four years, rewards for mining blocks have decreased significantly. After the last halving, in , miners got only 6.
Litecoin has a limit of 84 million LTC. The last Litecoin halving took place in , reducing the rewards to The next halving is expected in Unlike these two currencies, Ethereum has no final issuance cap. However, it has an annual minting limit of 18 million coins.
With the transition to PoS, block rewards are no longer irrelevant. In the prices of major cryptocurrencies increased immensely following another Bitcoin bull run. After a slight fall, the upward trend has continued. This growth led to the increase of the Bitcoin trade market.
While not a transactional token, Ethereum can process up to 15 transactions per second which translates to one block every 15 seconds and three minutes to reach the recommended twelve block confirmation. Litecoin is a decentralized payment method that allows individuals to transfer funds in a peer to peer transaction. It is free from intermediaries which would otherwise take a portion of the value of the transaction for services rendered. Touted as the new age of internet money, Litecoin is capable of allowing users to privately and securely send payment transactions across the network.
Thereby empowering individuals to control their finances without the need for a financial supervisory. Its low cost and ability to eliminate geographical obstacles have made it a borderless platform, compatible with the globalized economy. Also, as a close relative to bitcoin, many have used Litecoin as a test net for bitcoin as the platforms are similar to each other. In , the reward for mining Litecoin was halved from 25 LTC to Currently, there are approximately 63 million Litecoins left in circulation.
With a maximum of Litecoin capped at 84 million. Ethereum, by comparison, does not yet have a maximum capacity set. This fact is a strong point to start the comparative difference between Ethereum and Litecoin. This is because the total supply of a cryptocurrency affects its price through the forces of demand and supply.
The concept of proof of work consensus used between Litecoin or Ethereum is very similar in function and purpose. But the rewards and means are very different. Regardless of which platform, Litecoin or Ethereum, both blockchains use Proof of work as a method to secure the network by tying security to economic rewards and incentivizing participation. It also serves as an integral part of the network to function properly.
From Litecoin to Ethereum, the process for proof of work involve incentivizing individuals to participate in the network through contribution to computing power. The right to solve the next block will result in the distribution of tokens. For these rewards, the differences between Ethereum and Litecoin will be the type of tokens being given. Thus, the debate between Ethereum and Litecoin can be an economic one as well as for utility.
While Litecoin or Ethereum can perform the same utility as the other, it is simply not the same. For example, Litecoin is primarily used as a payment method and as a form of internet money. Ethereum, while being a platform for smart contracts and decentralized applications, can be used to send value from one peer to another, the process is not optimized.
Litecoin, on one hand, can solve blocks at 2. While Ethereum takes 3 minutes to reach transaction finality. While Litecoin is not developed as a decentralized application, it is open source and people can build around its infrastructure. However, again, it is not optimal. Therefore, the greatest difference between Ethereum and Litecoin is in its utility. Both projects are trying to solve different problem statements.
However, if an individual were comparing for economic speculation, then a more objectified argument needs to be made. Debates between cryptocurrencies such as Litecoin or Ethereum will often bring up questions regarding which cryptocurrency to buy. What we can do is take an objective stance and compare the market performance of Ethereum and Litecoin.
The price of these cryptocurrencies have a significant impact on their appeal as a prospect for speculation. And also for their mining potential. Mining incurs costs in the form of hardware such as GPUs etc and electricity.
And while bitcoin dominates the market, several other digital currencies are making waves. CNBC has created a brief guide on how the top five cryptocurrencies by market capitalization, or value in the world, have performed so far this year, and what the differences are between each of them. Bitcoin , invented in , is the largest cryptocurrency by value. A whitepaper was released by Satoshi Nakamoto, bitcoin's mysterious founder , outlining the aim of the project.
The original document stated that bitcoin is a "peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. It runs on a technology known as blockchain, which is a digital ledger of activity that cannot be tampered with.
It's decentralized because there is no central authority governing bitcoin. Instead, a network of so-called "miners" with high-powered computers work together to verify transactions through complex cryptography. But because of the frenzy around bitcoin, transaction times have spiked, which could go against the original aims of the cryptocurrency.
While Nakamoto referred to bitcoin as electronic cash, many experts have called it "digital gold" and said it could be a long-term store of value. At the moment, some retailers in Japan have begun accepting bitcoin as payment and there are even instances of real estate firms accepting it too. But there is little evidence of widespread use of bitcoin for payments. Ethereum is the name of a blockchain company that has created the digital token ether. But Ethereum and ether are now used interchangeably to refer to the cryptocurrency.
Ether is backed by a blockchain, much like bitcoin, but the technology is slightly different and aimed at a specific use case: smart contracts. Take a trade finance deal, for example. This relies on each party in the deal having a paper or digital copy of the contract and needing to update it individually. It's arduous and prone to error. But a smart contract is one that is written in code into a blockchain. Once the terms of the contract are met by each party, a deal will be executed.
Many major organizations are experimenting with Ethereum's blockchain. A consortium called the Enterprise Ethereum Alliance , which includes companies like Microsoft and JPMorgan, is developing uses for the Ethereum blockchain. The cryptocurrency ether is required by developers who want to build apps on the Ethereum blockchain and by users who want access to interact with the smart contracts on the platform.
Bitcoin cash was created earlier this year after bitcoin split in what is known as a "hard fork. Those who owned bitcoin at the time received free bitcoin cash tokens. The rally in bitcoin cash hasn't been as dramatic as the other cryptocurrencies. Many developers were concerned about the high transaction times on the bitcoin network. As the bull run continues to heat up, new cryptos find themselves in the spotlight each day.
While many consider Litecoin to be a dead currency, supporters claim they hold it for transactional purposes, and latch on to its fundamental strength. Ethereum is a decentralized global computing platform, and the most actively developed project in the blockchain space by a wide margin. In fact, it now trades for nearly triple that. The outlook for Ethereum has never been higher as Vitalik and his team take on the most challenging problems the intersection of politics, finance, philosophy and computer science have to offer.
Webull, founded in , is a mobile app-based brokerage that features commission-free stock and exchange-traded fund ETF trading. Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling.
Founded in , Exodus is a multiasset software wallet that removes the geek requirement and keeps design a priority to make cryptocurrency and digital assets easy for everyone. Available for desktop and mobile, Exodus allows users to secure, manage and exchange cryptocurrencies like Bitcoin BTC , Ethereum ETH and more across an industry-leading 10,plus asset pairs from a beautiful, easy-to-use wallet. Exodus is on a mission to empower half the world to exit the traditional finance system by Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features.
Gemini is a cryptocurrency exchange and custodian that offers investors access to over coins and tokens. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x. Gemini is 1 of the only brokers with multiple platform options based on skill level.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality. Our team is diligently working to keep up with trends in the crypto markets.
Keep up to date on the latest news and up-and-coming coins. Introduced in and described as a clone of Bitcoin , Litecoin began with the Bitcoin codebase. However, Litecoin brings a few unique traits of its own. Litecoin is often referred to as the cryptocurrency equivalent of silver Bitcoin is gold. As such, Litecoin often targets smaller transactions. However, both Bitcoin and Litecoin can be subdivided up to eight decimal places. If or when the value of these cryptocurrencies increases well beyond their current values, the smaller increments will become more useful.
Litecoin uses SegWit Segregated Witness , a technology that allows more transactions within a block , which speeds up the processing time for individual transactions. Slow transaction completion times have been one of the leading criticisms of Bitcoin compared to alternatives.
Active development for smart contracts is centered on Ethereum. Government regulation of currencies or bans are also a concern. The fact that Litecoin has survived this long since October and that it is one of the few currencies available on the highly-selective Coinbase exchange could indicate a better future than other altcoins. A potential risk of owning Litecoin is that one of its main selling features, SegWit , a method of shrinking transaction sizes, is being considered for Bitcoin as well, which would eliminate a significant advantage of Litecoin.
However, SegWit has been a topic of spirited discussion within the Bitcoin community for years and may never be added to Bitcoin. Like many cryptocurrencies, Litecoin enjoyed a massive runup in price at the end of and into early Prices have fallen since that time but remain substantially higher than early levels. Ethereum was the brainchild of Toronto programmer and Bitcoin enthusiast Vitalik Buterin.
In , he released a white paper about Ethereum, detailing the potential uses of an alternative blockchain technology that could work as both a financial instrument and decentralized platform for developers to build applications. More developers joined ranks and Ethereum had momentum and a growing community of high-tech enthusiasts.
By , Ether was a live cryptocurrency powering the Ethereum blockchain. Since its beginnings just a few years ago, ETH has grown into the second-largest cryptocurrency by market capitalization. Bitcoin was built as a cryptocurrency platform.
Ether is the cryptocurrency that's created by the Ethereum blockchain platform. The unique feature of Ethereum is the functionality of a smart contract. Litecoin is geared more towards purchases and transactions, while Ethereum is designed for other types of information exchange and application. Litecoin and Ethereum are both popular for their short transaction times. However, their general functionalities differ from each other.