Cryptocurrency. Over the past few years this word made huge popularity in public, people's interest in cryptocurrencies has increased dramatically. The main reason to focus on this interest has been Bitcoin, which came into the marketplace in 2009 and has become the dominant name in the field of cryptocurrency. Since then, there are so many cryptocurrencies who entered the scene, with at least 20 tracked by major financial news sites every day. Among these, one cryptocurrency which has gained increasing interest by people is Litecoin. Actually, Developers of this cryptocurrency has made a statement that their intention is to create the silver to Bitcoin's gold.
Bitcoin and Litecoin have a lot of things in common, on the surface. But at the most basic level, both of them are cryptocurrencies. Whereas state currencies like U.S. Dollar and Japanese Yen depend upon political and legal mechanisms for value and legitimacy, cryptocurrencies mainly depend on the cryptographic integrity of the network itself. But also Litecoin and Bitcoin have differences in essential respects.
As per new research, By 24 February 2019 Bitcoin's market value sits at roughly about 67 billion U.S. Dollar, Whereas Litecoins has a long way to travel as their market capitalisation is 2.7 billion U.S. Dollar. Whether Bitcoin's market capitalisation strikes you either high or low, it depends mainly on the historical perspective.
When we reckon that Bitcoin's market capitalisation was hardly 42,000 U.S. Dollar, It's current figure seems staggering, but not as much when it is compared to its high market capitalisation 326 billion U.S. Dollar by the date 27 December 2017. While Bitcoin is considered as the most valuable player by far, in the field of cryptocurrency, others like Litecoin, Ripple, and Ethereum are catching up.
One of the vast differences between Litecoin and Bitcoin is the total number of coins that each cryptocurrency can produce. This is where Litecoin makes a considerable impact. The Bitcoin network can never produce a single more bitcoin than 21 million coins, where Litecoin can make up to 84 million coins. In this theory, it seems like there is a significant advantage in favour of Litecoin. But it's real-world effects may be negligible and the reason behind this is both Bitcoin and Litecoin are divided into nearly infinitesimal amounts. In fact, the quantity of minimum transferable amount of Bitcoin is one hundredth million of a bitcoin, which is known as "satoshi". Users of either currency should have to face no difficulties in purchasing low priced goods or services, regardless of how high the general price of a whole single Bitcoin or Litecoin maybe. Litecoin higher number of maximum coins might offer a psychological advantage over Bitcoin because of its smaller price as of yet for a single unit.
Although technically transaction occurs on both the Litecoin and Bitcoin networks instantly fast, the time required to process a complete transaction is confirmed by other network participants. According to some research, the Bitcoin's network long term average transaction confirmation time is just over 10 minutes per transaction, although this time can sometimes vary when traffic is high in the Bitcoin network. Here also Litecoin is quite ahead than Bitcoin as it's average transaction confirmation time is 2.5 minutes per transaction. This difference in transaction confirmation time Litecoin will be the first preference for merchants. For example, a merchant is selling a product in exchange for Bitcoin would need to wait nearly four times as long to confirm the transaction as if the same product were sold in exchange for Litecoin. On the other hand, a merchant can always select an option to accept transactions without waiting for any confirmation at all. The security of such zero-confirmation is still a matter to debate on.
By far, the most fundamental technical difference between Litecoin and Bitcoin are the different cryptographic algorithms which they make in use. Bitcoin network makes use of the longstanding SHA-256 algorithm, whereas the Litecoin network makes use of a completely new algorithm known as Scrypt. The primary practical importance of these different algorithms is their impact on the process of mining new coins. The method of confirming transactions requires convincing computer power in both Litecoin and Bitcoin. Some of the members of the currency network, which are known as miners, allocate their computing resources toward confirming the transactions of other users. In exchange for doing so, these miners are awarded by earning units of the currency which they have mined.
SHA-256 is considered to be a more sophisticated algorithm in comparison to Scrypt, while at the same time, it allows a higher degree of parallel processing. Hence, Bitcoins miners in recent years have utilised increasingly refined methods for mining Bitcoins as efficiently as possible. The most common method for Bitcoin mining consists of the use of Application Specific Integrated Circuits. These are hardware systems which is opposite to the simple CPUs and GPUs which came before them, can be tailor-made for mining Bitcoins. The practical result of this has been that mining of Bitcoin has become increasingly out of reach for the daily users.
Scrypt, by contrast, was designed to be less susceptible to the kinds of custom hardware solutions employed in Application Specific Integrated Circuit (ASIC) based mining, which has led many commentators to view Scrypt based cryptocurrencies such as Litecoin as being more readily available for users who also wish to participate in the network as a miner. While some other companies have brought Scrypt ASICs to the market, Litecoin's vision of more easily accessible mining is still reality because most of the Litecoin mining is done via miner's CPUs or GPUs.
While Litecoin and Bitcoin may be the gold and silver in the field of cryptocurrencies today, history has shown that the status quo in this dynamic and emerging sector can change even in a few days or months. But it still remains to be seen whether these cryptocurrencies with which we have become familiar will retain their stature or not in the upcoming months and years.