Litecoin vs Bitcoin: What’s the difference?

Cryptocurrencies continue to shake up traditional finance and cultivate massive amounts of innovation within the tech world. It’s now estimated that at least 300 million people across the world use or own crypto, and that references to Bitcoin alone are posted on social media about every three seconds. 

Even though 2022 has been a very tough year for the crypto ecosystem with sustained bear markets, digital currencies still remain popular as mediums of exchange, stores of value, and as a way for people to get involved with cutting-edge projects and financial innovation. 

Litecoin and Bitcoin
Litecoin and Bitcoin

A Brief History of Bitcoin and Litecoin

Countless people across the world are familiar with Bitcoin, the first modern cryptocurrency that emerged in 2009.

Bitcoin remains the most popular and well-known digital asset due to its high price, reputation, and notoriety. Fewer, however, might know that Litecoin was a Bitcoin fork and ranks as one of the oldest ‘altcoins’ in the crypto ecosystem. 

Founded in 2011, Litecoin is based on the same underlying blockchain and consensus mechanism (PoW) as Bitcoin. The coin was founded by former Google engineer Charlie Lee, who announced his creation as the “lite version of Bitcoin.” 

What are the differences between Bitcoin and Litecoin?

While Bitcoin and Litecoin have many similarities, there are some stark differences between the coins. The biggest difference between the cryptos is the hashing function. Bitcoin relies on SHA-256 while Litecoin employs Scrypt. Scrypt does use SHA-256 but incorporates much higher Proof-of-Work (PoW) memory requirements.

Key Differences

The bottom line is tht Bitcoin and Litecoin are still vastly different cryptocurrencies, which means they each have some unique attributes and features beyond hashing functions alone. 

Market Capitalization

At first glance, the biggest difference between Bitcoin and Litecoin is market capitalization. The market cap refers to the total value of all mined coins (coins in circulation). 

As of late September 2022, Bitcoin’s market cap sits at around $372,537,000. Litecoin’s is vastly less, resting at just about $3,826,000. Bitcoin’s massive size still dwarfs all other cryptocurrencies, which makes the disparity between the two coins as something that would be expected.

Distribution

The distribution – or the total number of coins that can be mined – is another notable difference between Bitcoin and Litecoin. A max 21 million Bitcoins can be mined, while a maximum of 84 million Litecoins can be mined. 

As of late September 2022, about 91% of all Bitcoins are in circulation, with just about 1,835,137 BTC left to mine. About 85% of all Litecoins have been mined, which means there’s roughly 12,716,000 left to mine. 

Litecoin was designed to see its last coin mined about the same time as Bitcoin’s, which will occur sometime in 2140, according to current estimates. While many might assume Litecoin has the advantage since there’s more coins the network can accommodate, supply and demand principles still hold true in the crypto world. Bitcoin’s smaller supply is generally more appealing to investors. 

Transaction Speed

Transaction speeds, while much faster than in the traditional banking world, still do differ between both coins. A Bitcoin transaction takes about 10 minutes based on the block confirmation time which is also subject to change due to traffic and network activity. 

Litecoin, designed for swifter transactions, usually takes about 2.5 minutes. Speeds with Litecoin are also helped as the network is much less congested than Bitcoin’s. With any coin, the faster the network is able to process payments, there’s much less of a possibility transactions get stuck waiting for miners to work on them. 

What are the benefits of Litecoin over Bitcoin?

Litecoin’s benefits are faster transaction speeds, a cheaper price (which means investors can buy more), and lower transaction fees than Bitcoin. Litecoin continues to grow in notoriety and usage as more Litecoin casinos open up. 

What are the benefits of Bitcoin over Litecoin?

Bitcoin’s advantages include greater purchasing power, a higher overall valuation, and a much more limited supply than Litecoin. 

Which Is Right For You?

This comes down to personal preference. Both coins are great investment opportunities as they have been around for many years and have a strong reputation. Those looking for a coin with more purchasing power should opt for Bitcoin. Those interested in making fast transactions at a low cost should opt for Litecoin. 

Final Verdict

You can’t go wrong with Bitcoin or Litecoin. Before making a choice, be sure to understand the benefits and drawbacks of both to ensure you pick the coin that suits your needs and desires the best. 

Is Litecoin Better Than Bitcoin?

Litecoin is better than Bitcoin for those interested in cheaper transactions that execute at a faster rate than Bitcoin. Litecoin is also advantageous for investors with less capital who are interested in buying a stable crypto.

Can Litecoin Overtake Bitcoin?

The odds of Litecoin overtaking Bitcoin are extremely slim, due to the massive price disparity between both coins. However, we at dappGambl do see strong prospects for Litecoin moving forward, with a peak trading price of at least $4200 in 2031, if all factors remain constant. 

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Kevin OBrien
Written by Kevin O'Brien verified symbol Web3 & DeFi Writer
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Kevin is a native Texan focusing on DeFi, Web3 & NFT content. He’s written for Bitcoinist, CCN, CryptoGlobe and for a wide range of crypto projects. Kevin also enjoys collecting historical autographs and learning traditional musical instruments. Read more at texandefiwriter .com.

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Reviewed and Fact Checked by Eugene Abungana , Investment Analyst, Financial Analyst, and Institutional Trader