Since its introduction in 2009, Bitcoin has become synonymous with crypto and blockchain technology. Bitcoin is responsible for creating a new asset class used by financial institutions and retail investors today. Since gold, it was the first time a new asset was based on a scarcity-driven model and had intrinsic value.
Bitcoin’s achievement is not just limited to creating a new asset class; it also inspired many innovators to create various crypto tokens, each with unique applications. Litecoin is one such application that was the product of a Bitcoin hard fork. A hard fork is when a blockchain splits, creating a new chain and token. A hard fork happens when there is disagreement regarding the direction or development of a blockchain network.
What is Bitcoin?
Satoshi Nakamoto created Bitcoin after the 2008 global financial crisis. The idea behind Bitcoin was to be an alternative to traditional finance. The Bitcoin blockchain is an open-source decentralized ledger where Bitcoin transactions are recorded. Transactions recorded on the Bitcoin blockchain cannot be erased, making them immutable.
What is Litecoin?
In 2011, Charlie Lee launched a crypto token called Litecoin. The idea behind Litecoin was to create a crypto coin without the limitations of Bitcoin. Several first movers tried to buy Bitcoin (BTC) during the first meteoric rise of BTC between
During this incredible rise, it became difficult to mine Bitcoins due to the rising computational power required for the proof-of-work consensus mechanism. Application-Specific Integrated Circuits (ASIC) are the mining infrastructure of Bitcoin, and it has become increasingly expensive. High expense and computational power made it hard for ordinary crypto enthusiasts to engage in Bitcoin mining. Fewer users could purchase the infrastructure because of the rising costs, which could lead to centralization.
Litecoin was invented to overcome this limitation of centralization and high infrastructure costs. Litecoin uses a mining algorithm called Scrypt to overcome the limitations of Bitcoin.
Differences between Bitcoin vs. Litecoin
Apart from high infrastructure costs and mining algorithms, many features set Bitcoin and Litecoin apart.
Is Litecoin better than Bitcoin?
Now that we have seen the differences between Bitcoin and Litecoin, let us address the big question: which token is better? Litecoin was invented to ensure an affordable mining infrastructure for decentralization. Mining manufacturers were successful in producing the Scrypt ASCI mining infrastructure. As a result, Litecoin is becoming more concentrated as the majority of mining occurs through a few mining pools.
Bitcoin has a reputation for being the best crypto token. Bitcoin has been a formidable crypto asset since its inception and is known as digital gold. Due to its high hash rate, the Bitcoin blockchain is more secure than Litecoin. More computational power is required to carry out attacks or hacks on blockchains with higher hash rates. Currently, the bitcoin blockchain is highly resistant to any attack or hack.
Moreover , lightning networks solve the scalability issue of the Bitcoin blockchain. Bitcoin could be used for everyday transactions if the blockchain could improve the transaction throughput.
Conclusion
Both Bitcoin and Litecoin blockchains have been operating for more than a decade. Bitcoin is the clear winner between the two blockchains in features like security, decentralization, adoption, and popularity. Transaction speeds are better in Litecoin compared to Bitcoin. While the layer 0 level is comparatively slower in Bitcoin, blockchain solutions like the Lightning Network solve this issue.
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