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Difference between Bitcoin and Litecoin
There are a lot of people who are familiar with Bitcoin, but more recently, people have learned that there are also a lot of other cryptocurrencies. One of the cryptocurrencies that emerged in the wake of Bitcoin is called Litecoin. In fact, Litecoin was developed so that it could be utilised alongside Bitcoin.
Transactions involving cryptocurrencies are encrypted through the use of algorithms. The information regarding transactions is added to the blockchain whenever a transaction takes place. The participants in the network are able to generate more blocks for rewards and to regulate the transactions without the intervention of a centralised authority such as a bank because this method is used. In addition to this, the encryption prevents transactions from being performed more than once.
The use of cryptocurrencies is rapidly gaining popularity. The invention of Bitcoin and the subsequent publication of its source code in an opensource format made it feasible for the development of a wide variety of additional cryptocurrencies, including Litecoin.
What is Bitcoin?
Satoshi Nakamato is the inventor of the cryptocurrency known as bitcoin, which was released in 2009. Nakamato's goal was to design a decentralised currency that would eliminate the possibility of processing errors through the use of sophisticated encryption. When it was first made available, one bitcoin could be purchased for less than one dollar, but since then, its value has skyrocketed. Despite this, Bitcoin has been subject to extreme price fluctuations, which have sometimes caused the value of the currency to plummet.
Bitcoin has a total supply of 21 million coins, with more being created whenever a transaction is carried out. Transactions in Bitcoin are confirmed with the help of a robust algorithm. It has a massive capacity for processing in parallel.
Some significant Bitcoin qualities that make it distinctive are −
Proof-of-work − The consensus mechanism and validation process that verifies transactions and blocks on the blockchain by utilising the computational capacity of GPUs and, to a lesser extent, CPUs.
It uses SHA-256 − The cryptanalytic hash function that is responsible for encrypting blockchain data. In order to encrypt information, the hash function transforms the input into an output that has a predetermined length.
What is Litecoin?
Litecoin was initially conceived of and developed by Charlie Lee, an engineer who had previously worked for Google. To develop this new cryptocurrency, Lee relied on the open-source code that had been made available by Satoshi Nakamato. In addition, Lee launched Litecoin with the intention of making it the "silver" alternative to Bitcoin's "gold" status in the cryptocurrency market.
There are 84 million Litecoin’s available. The algorithm that is used to confirm a transaction is simplified, making it easier for regular people to understand. This indicates that there are greater opportunities available for mining Litecoin as opposed to simply purchasing coins.
Key Features of Litecoin
Following are some of the key features of Litecoin &mius;
Proof-of-work − Proof-of-work is utilized by Litecoin; however, it is dependent on access to huge amounts of memory as opposed to relying solely on computing power provided by a central processing unit (CPU) or graphics processing unit (GPU).
Uses Scrypt −The hashing function of Litecoin is implemented using Scrypt. Scrypt employs SHA-256, however the memory requirements for its proof-of-work protocol are significantly larger. It is speculated that as a result, its reliance on GPU arithmetic logic units (ALUs), and hence ASIC mining computers, will be reduced. Nevertheless, the first Scrypt ASIC mining devices appeared in 2021, which means that Litecoin might require an alternative solution.
Differences between Bitcoin and Litecoin
The following table highlights the major differences between Bitcoin and Litecoin −
| Basis of Comparison | Bitcoin | Litecoin |
|---|---|---|
| Creation details | In January of 2009, Satoshi Nakamoto developed the cryptocurrency known as bitcoin. | Charles Lee is credited with the invention of Litecoin in October of 2011. |
| Amount available | Bitcoin will distribute a total of 21 million coins to users. | 84 million Litecoin will be made available after Litecoin is fully implemented. |
| Algorithms | SHA-256 is the name of the algorithm that is utilized by Bitcoin. | The Scrypt algorithm is utilized in the mining of Litecoin. |
| Transaction Speed | A transaction, also known as the creation of a block, takes approximately ten minutes to process. | A transaction, i.e., creating a block, takes about 2.5 minutes to process. |
| Reward for new block | In the beginning, Bitcoin (BTC) miners were rewarded with 50 BTC every block; however, this sum is halved every 210,000 blocks that are mined. At this time, the reward for each block mined in Bitcoin is 12.5 BTC. | Litecoin (LTC) also began with a payout of 50 Bitcoin; however, the value of the prize is halved every 840,000 blocks. The reward for each block is now set at 25 LTC. |
Conclusion
Both Bitcoin and Litecoin are digital currencies that were produced using the same open-source technology, but they operate using distinct blockchains.
The fact that one Bitcoin is worth far more than one Litecoin in terms of dollars lends credence to the notion that Bitcoin is the "gold" of cryptocurrencies, while Litecoin’s are the "silver."
The algorithm that underpins Bitcoin is difficult to grasp, while the one that underpins Litecoin is simple. The complexity of the algorithms determines how long it takes for a transaction to be confirmed. For example, a transaction using Bitcoin takes around 10 minutes, while a transaction using Litecoin takes approximately 2.5 minutes before gaining confirmation.
Due to the quicker speed at which transactions may be completed, Litecoin is tempting for merchants who would like to give their customers the option of paying with a cryptocurrency.
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