Bitcoin has been trending for the past decade with a strong wave of investments flowing into cryptocurrencies during the pandemic era. To date, people only knew about Bitcoin as a prominent cryptocurrency available to one and all. There are different categories of cryptocurrencies such as Litecoin, Ethereum, Binance Coin, Dogecoin, etc. that have caught up with the investors who have made huge gains from trading them. But are all the cryptocurrencies the same? Let us understand Litecoin Vs Ethereum.
What is Ethereum?
- What is Ethereum?
- What is Litecoin?
- Litecoin Vs Ethereum: Difference
- Similarities Between Ethereum and Litecoin
- Final Thoughts
- Frequently Asked Questions
Ethereum is a software platform created via a blockchain network that has its very own cryptocurrency called Ether and uses its programming language named Solidity. Vitalik Buterin, a Russian-Canadian programmer along with other crypto entrepreneurs created the Ethereum platform back in 2013.
Although Ethereum is similar to Bitcoin, it is founded on blockchain technology, which records all cryptocurrency transactions, with the exception that individuals can create apps on the Ethereum platform. Ethereum has grown popular for decentralizing the financial system by removing middlemen and using blockchain technology to keep track of all transactions from mortgages to debt.
What is Litecoin?
In October 2011, former Google employee Charles Lee created Litecoin. Litecoin is a peer-to-peer cryptocurrency that was created with the goal of making daily transactions cheaper and faster. Litecoin is commonly referred to as Bitcoin’s younger sibling, yet it has a greater market cap ceiling and a more faster mining process than Bitcoin.
With the help of blockchain technology, Litecoin not only helps you transfer funds but also records all the public transactions. Its decentralized system ensures that you are free from government control or any form of censorship.
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Litecoin Vs Ethereum: Difference
|Digital Platform||Financial Asset|
|No limitations||Maximum Limitation|
|Smart Contract Platform||Mode of Payment|
|Faster Block Time||Lower Transaction Fee|
1. Digital Platform v/s Financial Asset
Ethereum is a blockchain-based digital network for trading cryptocurrencies like Ether. The worth of various cryptocurrency assets trading on the platform can also be determined using various algorithms. Litecoin, on the other hand, is a financial asset with intrinsic value, similar to Bitcoin. Litecoin is easily traded on cryptocurrency exchanges.
2. No Limitations v/s Maximum Limitations
The Ethereum platform has no limit on the number of tokens that can be mined, but Litecoin has a limit of 84 million tokens that can be mined. In other words, at some point in the future, no new Litecoin tokens will be mined, implying that no new Litecoins will be created. In the future, Ethereum will not suffer any scarcity issues.
3. Smart Contract Platform v/s Mode of Payment
Ethereum functions more like a smart contract platform, allowing users to construct decentralized apps known as DApps. The Ether tokens can naturally transact thanks to the smart contract feature. Litecoin, on the other hand, is a simplified version of Bitcoin that is used to complete transactions.
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4. Faster Block Time v/s Lower Transaction Fee
Ethereum is recognized for having a block time of only 15 seconds, whereas Litecoin’s block time is approximately 2 minutes 19 seconds. In Litecoin’s defense, the block time is at least 10 minutes faster than Bitcoin’s, but Litecoin outperforms Ethereum by charging a transaction fee of only $0.04 each transaction, compared to $0.85 per transaction for Ethereum.
Similarities Between Ethereum and Litecoin
Ethereum and Litecoin are significantly distinct from each other in terms of their definitions, since one is a cryptocurrency platform while the other is a cryptocurrency. However, depending on certain parameters, both can be very similar.:
- Above Bitcoin, both cryptocurrencies have extremely rapid transaction times.
- Both crypto networks employ a Proof-of-Work (PoW) method for miners, which allows them to put their computational skills to use by adding a new block to the blockchain network.
- Many cryptocurrency exchanges, including Coinbase, trade Ethereum and Litecoin.
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Your sole decision as an investor is which of these is a better investment. Should you put your money into Litecoin or Ethereum? In terms of operations, both have advantages and disadvantages. Because the two cryptos serve distinct goals, determining which one is the best investment is challenging.
Nonetheless, it is preferable to invest in both Ethereum and Litecoin, as each is distinctive in its own manner. Ethereum’s platform serves its function, while Litecoin’s payment mode serves its purpose. With their incredible speed and low transaction costs, both are more advanced than Bitcoin. After all, it’s better to have numerous eggs in multiple baskets when it comes to investing than to have a single dangerous asset.
Frequently Asked Questions
Which type of consensus algorithm is used for both the cryptocurrencies?
Ethereum utilizes Ethash to record PoW, whereas Litecoin uses Scrypt.
Should I buy Litecoin or Bitcoin?
Bitcoin prices have recently risen to record highs, while Litecoin prices have remained stable. Litecoin is a superior investment alternative than Bitcoin because it is faster and cheaper.
Is Ethereum a currency?
No, Ethereum is a trading platform for the Ether cryptocurrency.
Can investing in Ethereum or Litecoin make you rich?
If you invest wisely, any investment will make you wealthy. It is preferable to invest in Ethereum or Litecoin for the long run in order to reap the benefits.
Can Ethereum replace Bitcoin in the future?
Ethereum is expected to overtake Bitcoin at some point in the future, based on more advanced technology with better functionality.