How Is Litecoin Different From Bitcoin?

Litecoin is definitely worth knowing about
Litecoin is definitely worth knowing about

In this article, I want to give you a brief introduction to Litecoin, and explain why you should not look at it in the same you look at Bitcoin. So let’s start: 

What Is Litecoin?

Charles Lee, a former Google engineer, is the pioneer of Litecoin. In October 2013, he introduced the world to this fascinating new altcoin. It is often referred to as “silver to Bitcoin’s gold”. The owner, Charles Lee, claimed to solve the majority of BTC’s problems with the digital currency. The highly potent technology of Litecoin makes it one of the fiercest rival to Bitcoin, though Litecoin’s market cap is only over $9.67 billion. If you weigh both the currencies, you’ll observe tons of similarities because both the crypto giants have a lot of similar characteristics. Litecoin was designed in a way to offer a peer-to-peer transaction system, much like Bitcoin. It enables its users to carry out transactions or payments all around the globe with minimum fees. Litecoin is a decentralized currency, like bitcoin. There’s no centralized headquarters, building, or authority for it. Its currency knows no bounds and flows freely on the internet. This means that Litecoin is much more secure than just a paper currency. Since the government can’t reproduce or regulate it, the value of Litecoin resides in the hands of the people.

This new type of Altcoin is generated by mining, a process that is followed by the majority of the digital currencies for production. What miners do is that they use computers to process Litecoin transactions, which are displayed in the form of algorithms that the supercomputers need to solve.

Whenever a computer successfully solves a problem, additional Litecoins are credited to a network, and miners are granted with a reward.  There’s a certain limit of Litecoins in the world – its volume can never go beyond $84 million. As soon as Litecoin reaches its full potential, it will then be divided into two minute payments. The currency’s finite cap and the mining process protects Litecoin from hyperinflation. Moreover, Litecoin has a finite supply and is money for the people. With that being said, there are some dissimilarities among Bitcoin and Litecoin too. And those dissimilarities, are compelling enough to make you understand how valuable Litecoin is. So, let’s have a look at 3 reasons why you should buy a Litecoin.

1. Less Complex Algorithm

Other than volume and transaction speed, one more crucial difference among the two rising cryptocurrencies is the “complexity of algorithm”.

For those who have no idea about the digital currency, let me explain what it is. Digital currency is made up of codes. Now, both the cryptocurrencies: Litecoin and Bitcoin use a different types of algorithms. On one hand, Litecoin uses a script-hashing algorithm. Whereas, on the other hand, Bitcoin uses the SHA-256 hashing algorithm.

Speaking from a technical point of view, both these algorithms are extremely potent. But over the last few years, the SHA-256 has made it exceedingly complex to obtain bitcoins by mining. To obtain an extremely small portion of BTC, the miners have to put in place incredibly high technology equipment. While, in Litecoin, it is pretty easy for miners to access the system because of its script-hashing algorithm.

Interestingly, Litecoin’s simplicity possesses the ability to steal Bitcoin miners. Though Bitcoin is worth massively higher than Litecoin, the majority of BTC mining is done with the help of supercomputers. The BTC’s algorithm is becoming increasingly tough for miners to work with.

This could potentially mean that a huge number of Bitcoin miners might switch to Litecoin just because of its simplicity.

2. Rounded Numbers – The Ultimate Satisfaction

The number of coins that can exist in this rapidly growing world of digital currency is finite. Certain restrictions are needed to be followed and that’s why there can never be an infinite number of Litecoin in the world. The rule is the same for all the cryptocurrencies, be it Ethereum, Bitcoin or Ripple. However, a certain number of coins that can exist depends on the cryptocurrency itself.

Fortunately, this goes into Litecoin’s favor. Litecoins will go on to have more coins than BTC in the future. And this will greatly attract those users who are looking for an effective and simple digital currency.

Recent research revealed that around fifty-seven percent of retail shoppers are more likely to buy a product that has a rounded price. Shockingly enough, the research also revealed that four percent of those retail shoppers ended up paying more just to round up the price. So, it is crystal clear, people are more than likely to opt to pay with full numbers. And since there will be more Litecoins than Bitcoins on the market, it’s highly certain that consumers will buy goods with rounded numbers.

3. Litecoin – The Better Blockchain

Blockchain technology is the base of Litecoin, like all the other digital currencies. Whenever an exchange or transaction takes place in a digital currency network, the information related to that transaction or exchange is saved in a “block.” And then all these blocks are regularly added to the increasingly growing blockchain.

Almost everyone registered on the network has complete access to all information in the blockchain. What this means is that all the transactions are public, even if the consumers are anonymous. Consumers are only bound to the transactions that are happening on the blockchain by an electronic signature that provides a fair bit of anonymity. This entire framework makes the digital currency extremely secure.

Although both Bitcoin and Litecoin use Bitcoin technology, Litecoin has by far the quickest transaction speed of 2.5 minutes as compared to 10 minutes of Bitcoin. This attracts both the merchants and consumers who are looking for a way to get quicker transactions. Litecoin provides everything you want – speed and security.

Litecoin is highly valuable not only because of its speed but also because it has widely spread consumer appeal.