There was a point when only a handful of people were aware of digital cryptocurrencies, but that is not the case anymore. The booming cryptocurrency community is spreading crypto awareness, and an increasing number of investors are trying to get involved in the digital asset trading system with a better grasp of their perspective.
This article will look at two prominent cryptocurrencies: Litecoin and Ethereum. We'll analyze each in terms of transaction speed, scalability, algorithm, mining, and more, as well as price them to determine which has better potential in terms of investment.
Are Litecoin and Ethereum the same?
All cryptocurrencies that were introduced after Bitcoin are called altcoins. These altcoins use various protocols and encryptions, among which Litecoin and Ethereum are two popular names. They were among the first altcoins that rose to fame in the early days of crypto. However, investors still have difficulty deciding between the two due to their potential. The key points differentiating the two are number of coins, transaction speed, prices, market cap, and more.
What is Litecoin?
Litecoin was originally launched in 2011 as “the silver to Bitcoin’s gold” by developer Charlie Lee, who took Bitcoin's technology as a reference point to construct a coin he believed would be more user-friendly. Litecoin, for example, may accomplish tasks quicker than Bitcoin. It also has a bigger supply, which Lee believed would make transactions simpler than they are with Bitcoin, which is fairly rare.
Although many so-called cryptocurrencies have failed in the years after Litecoin's inception, it has remained one of the market's most widely used cryptocurrencies. In May 2022, Litecoin supporters released an upgrade that will strengthen transaction privacy and distinguish it from the competition.
How Does LTC Work?
Litecoin, like Bitcoin (BTC), is based on an open-source blockchain that is not managed by a central authority. Every Litecoin node operator keeps a copy of each blockchain to guarantee that new transactions do not invalidate previous ones and miners aid in processing new transactions by adding them in new blocks.
BTC and LTC can both be mined, resulting in orphaned blocks. Another Litecoin concept that promotes compatibility with the blockchain is Atomic Swaps, which allows for trading various cryptocurrencies without actually exchanging them. Litecoin uses a proof-of-work mechanism with a scrypt-based process that does not require high computing power. As a result, it requires the mining to be spread among more miners.
What is Ethereum?
Ethereum was founded in 2015 by Vitalik Buterin and Gavin Wood. It is a decentralized global platform focused on blockchain technology. Ethereum offers open access to digital money through its currency "ether" (ETH), and dozens of other apps available today on Ethereum’s platform.
Ethereum is regarded as the second-generation blockchain (2.0). While Bitcoin is primarily used as digital money and a reserve currency, Ethereum's primary use extends beyond these functions. Ethereum is a marketplace for worldwide payments, games, and dozens of decentralized apps. It is regarded as the most programmable blockchain in the world.
How Does ETH Work?
Ethereum focuses on smart contracts, property transfer, and dApp development. The Ethereum blockchain dApps make use of Ether tokens generated by the network. While these tokens can be used as currency, their primary purpose is to power the establishment of dApps.
Smart contracts are blockchain-based programs executing an activity when criteria are met. This method ensures that all Ethereum transactions for the user are secure and private. Ethereum mines use a proof-of-stake method, which takes significantly less processing power, decreases hardware requirements, and assures more access to the mining process.
Litecoin vs. Ethereum: Exploring the key differences
Creation: Litecoin was launched as an altcoin on October 13th,2011, right after Bitcoin. On the other hand, Ethereum was launched on July 30th, 2015, after almost four years.
Value: Litecoin is much less expensive to maintain than Bitcoin, which makes it an intriguing alternative. As of September 2021, one Litecoin token is valued at approximately $150, much less than Bitcoin's $40,000 price tag. Litecoin has a market cap of $10 billion, making it one of the most prominent coins on the market. Ethereum, on the other hand, has a market cap of roughly $320 billion as of September 2021, with one coin costing approximately $2,700.
Supply and Growth: Litecoin is hard-capped at 84,000,000 LTC, with 66,752,414 LTC in circulation. Litecoin reached an all-time high of $417 on Coinbase in 2017 before sliding back to below $20. Before the coin's halving in 2019, it was trading at $140 per LTC coin, about half of its all-time high and a more than 600% increase from its low price. Another decline caused Litecoin to touch $35 in late 2019; however, with a higher low, the future price of Litecoin is only predicted to rise from there.
Over 119 million Ethereum tokens have been issued and will be in active circulation by March 2022, although additional coins are not projected to arrive quickly. Even though the cryptocurrency has an infinite supply, Ethereum was updated in August 2021, EIP-1559, which enhanced the block size required to create coins and destroyed ("burned") any transaction fees rather than sending them to the original miners.
How it works: Different cryptographic techniques are used by Ethereum and Litecoin, which influences how new currencies are produced. Litecoin uses Scrypt, whereas the Ethereum Network previously depended on Ethash, which is no longer relevant because the network has switched to Proof of Stake (PoS) as part of its Ethereum 2.0 update.
Purpose: Litecoin's fundamental design goal is to manage peer-to-peer payments quickly and economically without the interference of a third-party financial institution. Ethereum, on the other hand, can manage more sophisticated transactions and facilitate the creation of a wide range of applications.
Mining: Mining entails employing high-powered computers and specialized hardware to solve complicated riddles required to validate transactions and produce new blocks. The first miner or node to verify the block receives fresh currency. Because it has moved to the Proof of Stake consensus process, the Ethereum blockchain no longer requires mining. Participants bet their coins in the system, and everyone has an equal chance of winning.
Transaction speed: Each of these coins has a different block time. The block time for Ether is only 15 seconds. That means you can confirm many transactions within a minute. Litecoin, on the contrary, has a longer block time than Ether, at 2 minutes and 19 seconds. Litecoin is over four times faster than Bitcoin, making it one of the world's fastest cryptocurrencies. However, Ether comes first.
Transaction fees: In Ethereum, the usual transaction fee is $0.85. On the other side, the average transaction fee for Litecoin is negligible, at only $0.04 per transaction. One of the numerous things giving bitcoin the advantage is the astonishing gap in transaction fees between the two.
Block time: Litecoin's desired block time is every 2.5 minutes, while Ethereum's is between 10 and 19 seconds.
Smart contracts: Smart contracts are digital payment protocols that, if parties follow set rules, verify, regulate, and self-execute any agreement embedded in digital codes on a blockchain. Unlike traditional (physical) contracts, these take place between anonymous individuals and are automatically enforced without the involvement of a third party. The best feature of Ethereum is its cryptographic security, which enables Ether transactions to occur spontaneously. Litecoin is not as intelligent as smart contracts.
Comparison Table for Ethereum and Litecoin
L 2.5 min
Decentralized apps platform
L 12.5 LTC
Reward per Block
Ethereum Coin: Pros and Cons
Advantages of Ethereum
Decentralization of Crypto: Ethereum's decentralized design successfully distributes information and trust among network users, eliminating the need for a centralized headquarter to manage the platform and mediate all the transactions happening on the platform.
Permissioned Network: Various open-source protocol layers allow organizations to develop on Ethereum networks while guaranteeing compliance with all governing and user-safety protocols.
Secure Transactions: Businesses in Ethereum can gain privacy granularity by forming private collaborations transactional layers. Private data is encrypted, and only those who know about it can access it.
Scalability: Because of Proof of Authority consensus and tailored block time and gas constraints, consortium networks built on Ethereum can outperform the public grid-connected and scale to hundreds of transactions each second or more, depending on network configuration. Ethereum's throughput will be enhanced shortly thanks to protocol-level solutions like as sharding and off-chain, as well as layer 2 scaling solutions such as Plasma and state channels.
Disadvantages of Ethereum
Complicated Programming Choices: Ethereum employs a programming language identical to C++, Python, and Java is known as learning Solidity, Ethereum's native language, which may be difficult. One of the most serious concerns is a lack of beginner-friendly classes for programmers looking to develop.
Risky Investment: Investing in Ethereum, like any other cryptocurrency, can be risky. Cryptocurrencies are highly unstable, resulting in both big gains and significant losses. The price of Ether has fluctuated dramatically in the past, which could be a substantial disadvantage for some investors, particularly newcomers. Furthermore, Ethereum's fees fluctuate, which is annoying.
Litecoin: Pros and Cons
Advantages of Litecoin
Speed: Speed is undoubtedly the most important advantage of Litecoin. Litecoin is four times faster than Bitcoin and other cryptos. It can complete transactions in as little as 2.5 minutes. Litecoin’s fast processing speed makes it far more secure since hackers have less time to try double-spending attacks on it.
Low transaction Fees: When compared to many other cryptocurrencies or conventional payment systems, Litecoin offers comparatively cheap transaction fees. This is a significant factor that can expand and ease the acceptance of LTC.
Scalable: Scalability is another significant advantage of Litecoin. Litecoin has a transaction rate of 56 transactions per second. On the other hand, Ethereum currently manages 15 transactions per second, giving Litecoin an upper hand.
Simpler Mining Process: To mine new coins and verify each transaction, Litecoin uses the proof-of-work method. It uses “Scrypt”, which is far more efficient than SHA-256 and other hashing algorithms. Compared to other coins, such as Bitcoin, Litecoin's mining algorithm makes mining extremely energy-efficient and available to miners, which is also a huge advantage in terms of the environment.
Easy to Trade: Litecoin is a simple crypto to trade. Many exchanges support Litecoin, including eToro, among the most trustworthy sites, allowing investors to buy LTC and exchange CFDs on over 90 cryptocurrency pairs. All hardware wallets and atomic exchanges between LTC and BTC support Litecoin. Furthermore, due to its cheaper pricing in contrast to other prominent coins - with nearly zero transaction cost and low volatility levels - Litecoin is an appealing alternative for newcomers wishing to participate in the cryptocurrency field.
Disadvantages of Litecoin
Reduced Mining Profitability: Miners worldwide are rapidly losing interest in Litecoin as mining Litecoin is no longer as economical as it was a few years ago. Its difficulty has significantly increased, and revenues have reduced as one of the earliest cryptos with one of the largest chains. To put it another way, miners have to work much harder for much less LTC.
Patchy Upgrades: Whenever a new product is added to Litecoin, it often comes as a third-party addition. Several firms and organizations are working on Smart contracts for Litecoin instead of the Litecoin team. Some other neglected opportunities include the Lightning Network, which accelerates transactions by resolving them off-chain, the MimbleWimble protocol, which improves anonymity, and more. These additional features are often borrowed from other creators instead of being integrated into the system.
What makes Ethereum and Litecoin similar?
Both Ethereum and Litecoin are similar in the following aspects:
Ethereum and Litecoin use open-source networks. This means that both currencies are accessible to everyone around the world.
They both are extremely environmentally friendly, using less energy to mine than other cryptocurrencies. Furthermore, Bitcoin’s inaccessibility over the years has opened up the market for Ethereum and Litecoin.
Litecoin and Ethereum require less than one minute to authenticate any transaction made over the network. Although the duration varies according to network activity, the average confirmation period is much faster than other cryptocurrencies.
Is it better to buy Ethereum or Litecoin today? Or both?
It can be difficult to determine the best moment to buy cryptocurrencies, especially now, in the midst of crypto winter, which is a suitable time to invest in LTC and ETH. Of course, one can use price forecasts and various price predictions to understand better where the currencies are headed. However, Ethereum and Litecoin did not reach an all-time high during the 2021 bull run. This does not imply that it is unsuitable for investment. It means that Litecoin has a reduced risk ratio than Ethereum. Given the current crypto trading conditions, investing in Litecoin or Ethereum must be done with long-term returns in mind.
Ethereum vs. Litecoin: What is better at the end?
The cryptocurrency market is highly unpredictable, which makes it challenging for investors to pick the best investment opportunities. Many people are questioning whether they should buy Litecoin or Ethereum, given the buzz surrounding this business. New currencies enter the market monthly without assurance that they'll remain popular for a year. Nonetheless, the currencies discussed in this article have a large user base and experienced development teams and are available on most exchanges. Both these currencies have extremely high profitability rates with high chances of growth in coming years, each having its advantages. However, we suggest users do their research before taking a step.
Which is better, Ethereum or Litecoin?
And: Even though Litecoin has a lower market cap, it has advantages like higher transaction speed and fee. Ethereum is the second most valuable crypto after Bitcoin, making it a great name to invest in for prospects. They have advantages, and investment potential depends on each investor's needs.
Is Litecoin older than Ethereum?
Litecoin is much older than Ethereum and was first launched in 2011, right after Bitcoin. On the other hand, Ethereum was launched in 2015.
Should I invest in Ethereum or Litecoin?
Ethereum is the obvious winner of this struggle and is a far safer investment than LTC. It is vital to remember that crypto, blockchain, and smart contracts are still in their infancy. Therefore any investments should be considered speculative.
Is Litecoin still a good investment?
Yes, Litecoin is still a great investment with a high potential for growth and returns. It is a great choice for investors looking to enter the cryptocurrency world without making sizable investments in crypto.
*DISCLAIMER: None of the authors, contributors, administrators, or editors connected to OWNR Wallet encourage readers to invest in Litecoin or Ethereum without doing proper research on their own. This article is purely for educational purposes only.