Litecoin vs. Bitcoin: What Differentiates Cryptocurrency?
Litecoin vs. Bitcoin: What is the difference? If you are asking yourself this question, you may be trying to decide whether to purchase either of these cryptocurrencies, or just to learn more about these important players in the digital economy that is taking shape. You may also have heard of many types of cryptocurrency and want to know more about some of the cryptocurrencies that have lasted the longest. Although Bitcoin has only been around since 2009, and Litecoin since 2011, they are among the cryptocurrencies that have been around for the largest number of years.
Bitcoin is the most well-known and widely-used cryptocurrency, so people tend to be most familiar with it, even if they are not very well-informed about crypto. However, as curious individuals begin to research cryptocurrency, they are often overwhelmed by the amount of cryptocurrencies out there. As of late June 2018, there were about 1,600 different cryptocurrencies, and more continue to pop up all of the time. The more you get interested in cryptocurrency, the more you will find that there is to learn. To understand cryptocurrency exchanges, investing, and the industry as a whole, you need to understand how to compare Litecoin to Bitcoin and other cryptocurrencies.
Background on Bitcoin
If you are interested in cryptocurrency, you are probably familiar with Bitcoin. As the first cryptocurrency to gain popularity, Bitcoin launched in 2009 and has since gone through a short but interesting history, eventually reaching the status of a household name. With some people buying cryptocurrency as an investment and others using it to purchase items or services, Bitcoin has shown its staying power as a leader in the crypto space. The established name Bitcoin may help new buyers to feel more confident starting out in crypto with something they have heard of rather than some of the more obscure options. However, Bitcoin is by no means the only cryptocurrency out there.
Background on Litecoin
Litecoin launched in 2011 as another choice for a decentralized, blockchain-based digital currency. In terms of popularity and market capitalization, Litecoin has never been on an even footing with Bitcoin, but it does have some advantages which will be discussed below.
Litecoin vs. Bitcoin: How Are They Different?
Litecoin and Bitcoin seem incredibly similar on the surface; they’ve long been some of the most popular cryptocurrencies available. However, there are key differences between the two, including name recognition, market capitalization, transaction processing speed, and number of available coins.
Name Recognition
This might be obvious, but Bitcoin has much greater name recognition than Litecoin, particularly outside of the industry. For many people, Bitcoin may be the only cryptocurrency they can name. By contrast, while Litecoin is well known by crypto enthusiasts, it may not be something that you have heard of in the past if you are new to the crypto scene. This might not be a consideration for you when you are deciding what cryptocurrency to buy, but for some people it may be reassuring to invest in or purchase something you and your family and friends have talked about before.
Market Capitalization
Another variable that differentiates Bitcoin and Litecoin is market capitalization. Bitcoin has the largest market capitalization in the cryptocurrency network, with its current highest ever market capitalization at $1.28 trillion, which occurred in November 2021. Litecoin’s market is currently over $4 billion, although it has sometimes risen much higher than that. Clearly, Bitcoin has a lot more money invested in it, but it also got to this number quite rapidly. Bitcoin’s July 2010 market capitalization was just over $40,000. Bitcoin has seen incredible growth, but Litecoin has been growing steadily, too. Litecoin’s market capitalization was almost $1.5 million on June 1, 2017, and it increased by about 3.5x a year later.
Transaction Processing Speed
Technically, the processing speed is instant when it comes to the user side of the transaction. It doesn’t take very long to use a cryptocurrency ATM to input all of the information needed from the user for a transaction, for example. You process the information and move on, but the blockchain ledger has to record the transaction still. The time it takes on each of the networks is significantly different. As of September 2023, Litecoin processes and records transactions about 4 times faster than Bitcoin does. This processing speed is essentially the time it can take for an individual to receive confirmation on a transaction, and for now, that hasn’t been a big deterrent for Bitcoin users. However, moving forward with cryptocurrency technology, Litecoin’s faster processing speed can be a huge advantage. When the category is transaction processing speed, in the Litecoin vs. Bitcoin comparison, Litecoin is the winner.
Number of Available Coins
The Bitcoin network will never exceed 21 million coins, but Litecoin can have up to 84 million coins. The total amount of coins mined is seemingly inconsequential, as the market capitalization of each will determine their value per coin. However, most investors in the cryptocurrency space agree that coins with limited circulating supply stand to gain the most value. When it comes to comparing issues such as value, the available supply of coins, how fast new blocks will be generated, halving is a topic you will want to understand as well. Litecoin recently underwent halving in August 2023 and Bitcoin is thought to have its next one coming up in 2024. This is just another illustration of how there is always more to learn about cryptocurrency, which is one of the challenging but also exciting aspects of it.
What Should You Keep In Mind When Deciding Whether to Buy Either Bitcoin or Litecoin
Whether and what kind of cryptocurrency to buy are decisions you need to make for yourself, a process that can include research and also consulting a financial advisor for advice. However, here are some suggested factors to consider when weighing buying Litecoin versus Bitcoin. As noted above, Bitcoin has much wider mainstream adoption and name recognition as the first major cryptocurrency. However, Litecoin is able to process transactions faster than Bitcoin can, so if speed is a priority for you, that might be important to note. In terms of growth in usage, the fact that Bitcoin is well-known already could indicate that it has more mainstream adoption potential as a payment method. Litecoin, while smaller, has continued to be a viable option since 2011. When looking at use cases, Bitcoin, while it has sometimes been accepted as a cryptocurrency, has also sometimes been considered a "digital gold" for investing and storing value. Litecoin can also be accepted as a payment method and has sometimes been used as an investment. Considering your timeline, risk tolerance, mining interest, and intended cryptocurrency use can clarify if Bitcoin or Litecoin is the better choice given your specific needs and outlook, but consulting with a financial advisor is always the best option if you have questions about your specific situation.
Why Are There So Many Cryptocurrencies?
Bitcoin, the first cryptocurrency to take off, introduced a practical application of a revolutionary technology into the world: blockchain. Inspired by that achievement, an engineer named Charlie Lee created Litecoin, aiming to be the “silver to Bitcoin’s gold.” This means that it was never designed to become Bitcoin’s equal and instead it focused on providing other benefits, such as faster transaction processing.
More cryptocurrencies evolved from Bitcoin by either altering the fundamental technology or the intended use of the cryptocurrency itself. Each cryptocurrency is different because of their intended purpose or vision of the founders. For example, the cryptocurrency Stellar focuses on cross-border transactions. While Stellar works to make those kinds of transactions cheaper, the cryptocurrency Zilliqa focuses on the issue of scalability on the blockchain, i.e. making it possible for more transactions to happen at a given moment. Having seen the success of Bitcoin, many people with the tech skills to do so have naturally wanted to start their own cryptocurrency.
You Can Get Started Investing or Using Crypto Today with Our Convenient ATMs
Whether you’re interested in owning Litecoin or Bitcoin, start your cryptocurrency journey with Pelicoin ATMs! If you have never purchased cryptocurrency before, you’ll find that these ATMs offer a format similar to a traditional currency ATM. This means that the ATM has a screen that will walk you through the steps to use it. While not much advanced preparation is needed to use our ATMs to buy cryptocurrency, be aware that you will have to decide what kind of crypto you want to buy and specify your choice at the machine. Hopefully this post has gotten you started on making this decision.
Pelicoin wants to ensure that our customers have a great experience using our machines, no matter what kind of crypto you choose or how many times you have purchased crypto in the past. Please don’t hesitate to contact Pelicoin at (504) 507-0879 or support@pelicoin.com with any questions. With locations all over the Gulf South, including in Texas, Louisiana, Mississippi, Alabama, and Tennessee, Pelicoin provides access to cryptocurrency where you need it. Our crypto ATMs located at places where you already go, such as convenience stores and gas stations, make it simple for you to get started today!