Bitcoin is by far the more well-known ‘brand name’ of cryptocurrency. It’s the first thing people think of when the topic is brought up. And it will continue to be this way for a very long time. According to most, every other alternative digital currency is a ‘wannabe’ Bitcoin, even though that’s not exactly the case. It would take a huge marketing campaign or a massive improvement functionality improvement for another coin to be recognized as widely. However, Litecoin has some advantages as well (discussed below) so most consider Litecoin to be the ‘silver’ to Bitcoin’s ‘gold’.
Number In Circulation, Value
There are approximately 4x more Litecoin circulating, and there will be 84 million, compared to Bitcoin’s 21 million. Therefore the price of a Litecoin is very unlikely to reach even close to Bitcoin. Due to supply and demand, Litecoin is more prevalent and available, therefore its price will be cheaper.
Litecoin takes a huge lead in this department. Bitcoin takes many minutes – close to 10 – to transfer from one user to another. Litecoin on the other hand transfers within a few minutes. Hence its name, “Lite” coin as in lightweight. It was created to combat the scalability issues of the brand name coin, and it has done its job just fine. However, some question if Litecoin would become ‘obsolete’ if ever Bitcoin achieved faster transaction times (through the Lightning Network).
Block Generation (Transaction Verification)
The faster transfer times of Litecoin are due to the block rewards. Litecoin has only 2x the block reward as Bitcoin, however it pumps out the rewards twice as fast. Hypothetically if it takes 10 minutes for 25 Bitcoin to release, then it takes Litecoin 5 minutes for 50 Litecoin to release (but it releases 100 every 10 minutes, which is 4x the number of Bitcoin, which explains its max circulation of 84 million).
Algorithms (SHA-256 vs. Scrypt)
This difference is really only significant to miners who use different methods to mine each coin. Bitcoin uses a more common standard of encryption called SHA-256. Most of the internet is built on this encryption algorithm. Litecoin uses a newer Script, which opens up a lot more mining potential. Many alt-coins were created based on Litecoin’s Scrypt standard due to its widespread CPU and GPU mining capabilities.
In the end, neither is better or worse. As mentioned earlier, Bitcoin has the brand recognition going for it, being the ‘first cool kid on the scene’ but Litecoin came around not too long after. Both of these cryptocurrencies are early players. Considering that there are more than 1000 alternative cyrptocurrencies in circulation at the time of writing this, it’s pretty obvious that both Litecoin and Bitcoin receive major recognition from investors. At the time of writing this, Litecoin is a mere 1/80th the value of Bitcoin. When factoring in a hypothetical 4 Litecoin = 1 Bitcoin (in terms of total available) we still arrive at an equivalent 1/20th value. Based on this fact alone, many major investors consider Litecoin’s value to be not yet recognized. If you’re looking to invest in something that has the potential to spike pretty fast, Litecoin may be worthy of your consideration!