Over the years it's become more clear that there's not such a thing as Bitcoin Vs. Litecoin but that both have their space. Keep reading to learn everything.
Litecoin, one of the earliest offshoots to Bitcoin's whitepaper, was born with a specific goal: to address Bitcoin's scalability issues.
By creating this altcoin just mere years after Satoshi Nakamoto revolutionized cryptocurrency and financial systems as we know them today, Litecoin sought not only to expand upon those ideas but also improve speed by adding blocks approximately every ten minutes - solving what would otherwise be an upcoming issue for widespread utilization of this new technology.
Some people compare Litecoin to silver while comparing Bitcoin to gold: Silver is an accessible and valuable asset that complements its advanced and powerful counterpart of gold that's used as a store of value and not so much a means of exchange.
Litecoin is an influential cryptocurrency developed independently of Bitcoin.
While it shares much with its predecessor in terms of features and code, Litecoin offers several distinct advantages: faster block times that result in the speedier completion of transactions; more coins available on its market cap - 84 million compared to 21 million for bitcoin - meaning more significant liquidity potential; and less energy consumption when mining new blocks.
Litecoin and Bitcoin both leverage the power of Proof of Work (PoW) to uphold network consensus.
Miners from these two leading cryptocurrencies engage in a race against time - solving complex math puzzles with hash algorithms that are incredibly difficult to crack.
Should they succeed, miners not only keep the blockchain safe and guarantee accurate transaction processing but also earn timely rewards for their efforts.
Bitcoin utilizes the Secure Hash Algorithm 256 to secure its Proof-of-Work mining process. At first, miners relied on central processing units (CPUs) as their core machinery; however, it soon became apparent that these computers lacked sufficient capacity and oomph for completing such intensive math puzzles.
The search was then on for something more potent - enter the graphics processing unit (GPU). This second processor took a significant load off CPUs while providing superior overall performance.
Litecoin was developed to be an accessible cryptocurrency for individuals, who were its most prominent proponents. The memory-intensive Scrypt hashing algorithm was chosen to achieve this goal as it would deter GPUs and ASICs, allowing Litecoins to initially only be mined using CPUs.
However, ASICs capable of mining with Scrypt have become available over time, making almost all Litecoin extraction now done through dedicated hardware alone.
With blocks mined on the Litecoin network four times faster than Bitcoin, it's no wonder its transaction throughput is far quicker.
Each new block generated sees miners rewarded with a predetermined amount of LTC; however, this reward gradually decreases over time through halving - an incremental decrease in rewards by 50%.
To ensure a consistent trajectory of growth and development, Litecoin employed an innovative solution to compensate for its faster block time: extending the interval between halvings from 210,000 Bitcoin blocks to 840,000.
This fourfold increase results in quadrupling the amount of new LTC tokens being generated compared with BTC each year, similarly occurring at a four-year frequency.
Ultimately this approach affords 84 million total issued coins—significantly higher than Bitcoin's 21 million ceiling — solidifying Litecoin as both a reliable investment choice and a technological marvel.
Litecoin was explicitly designed to provide a quicker and more effective platform for exchanging digital money than Bitcoin.
This became apparent with its faster block times and higher transaction throughput, as well as being an essential component in SegWit's soft fork adoption by Bitcoin, thus making it clear that Litecoin is not just another cryptocurrency but also plays a critical role in aiding innovation within the industry.
Litecoin's secure, cost-effective blockchain model has earned it global recognition and trustworthiness.
It's widely viewed as a valuable supplement to Bitcoin instead of an adversary; Litecoin is the silver that complements Bitcoin's gold standard in the cryptocurrency world.