Whats the difference between bitcoin and litecoin

Based on the open-source global payment network that is not regulated by a central authority, Litecoin uses "scrypt" as a proof of work, which can be decoded with the aid of CPUs of consumer-grade. Although Litecoin is similar to Bitcoin in various ways, it has a faster block generation rate, and for this reason, it provides faster transaction confirmation time.

Along with developers, even the number of merchants are increasing to accept Litecoin. This makes Litecoin the sixth-largest cryptocurrency in the world. At the most basic level, both are decentralized cryptocurrencies. Following are few ways that make both these cryptocurrencies similar: Proof of Work: One of the vital similarity between Bitcoin and Litecoin is that they have the same proof of work ecosystem.

This basically means is that the underlying process used to mine both these cryptocurrencies is fundamentally similar. This incorporates the processes of generating, authenticating, and then adding it to blockchain which is a public ledger. Storage and Transactions: For investors, the various basic elements of transacting with Bitcoin and Litecoin are very similar.

Both of these cryptocurrencies can easily be purchased via an exchange or be mined using a mining rig. Both these cryptocurrencies also require a digital or cold storage wallet to be safely stored between transactions. This also depends upon factors varying from investor interest to government regulations. Thus, Bitcoin enjoys a significantly higher value than Litecoin because Bitcoin is so much greater than all other digital currencies that are in existence at this moment.

Distribution: The other vital difference between Bitcoin and Litecoin relates to the total number of coins that each cryptocurrency can produce. This is where Litecoin identifies itself. Bitcoin network won't exceed 21 million coins, whereas Litecoin can hold up to 84 million coins. In theory, this may appear like a significant advantage for Litecoin, but its real-world effects can ultimately prove to be negligible. This is so because Bitcoin and Litecoin are divisible into nearly infinitesimal amounts.

The minimum quantity of transferable Bitcoin is one hundred millionth of a bitcoin 0. The reward size for the received block while mining Bitcoin changes every four years whereas in the case of Litecoin, its premium is changed every , blocks, also every 4 years.

Transaction Speed: With regards to transaction speed, when comparing both the cryptocurrencies we can see that it takes roughly 9 to 10 minutes to get a block on the Bitcoin network and for Litecoin this figure is roughly 2. Due to this feature, the transaction confirmations using LTC is faster.

At the same time, the miners have more chances to obtain a reward for mining a block in the cryptocurrency network and can spend the earned money quicker. However, the negative side is the increase in the blockchain's size that takes up more space. Along with this, there are security problems, too, as it gets cheaper to attack the Litecoin network than Bitcoin.

Algorithms: The most fundamental technical difference between both these cryptocurrencies is the different cryptographic algorithms they employ. Bitcoin uses the longstanding SHA algorithm, and Litecoin uses a comparatively new algorithm called Scrypt. The practical significance of these different algorithms is their influence on the process of mining new coins. The process of confirming transactions, in both Bitcoin and Litecoin, requires substantial computing power.

Some miners may allocate their computing resources toward confirming the transactions of other users, and in exchange for doing so, these miners are rewarded by earning units of the currency they have mined.

In general, SHA is considered to be complex algorithm than Scrypt, while at the same time enabling a greater degree of parallel processing. Consequently, in recent years, Bitcoin miners have begun using sophisticated methods for mining this cryptocurrency as efficiently as possible. In contrast, Scrypt is less susceptible to the kinds of custom hardware solutions employed in ASIC-based mining. Due to this, many commentators view Scrypt-based cryptocurrencies like Litecoin to be more accessible for users who desire to join the network as miners.

Value Connection — Bitcoin vs Litecoin Over the last decade, Bitcoin and Litecoin have seen continued decoupling of value. With regards to Litecoin, its users have shown entirely different trading and spending practices compared to Bitcoiners. Proof-of-work algorithm Another significant fundamental way Litecoin differs from Bitcoin is its mining algorithm. While both are proof of work, Bitcoin uses the traditional SHA hashing algorithm. Litecoin uses a comparatively new algorithm known as Scrypt.

Another key difference between the two is that Scrypt requires less computing power, making it possible for regular users to participate in mining with less complexity. Both also have a limited supply. The total limit for Bitcoin is 21 million, while Litecoin has a limit of 84 million.

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