Litecoin vs Ethereum- Choose The Best!
Recently, Blockchains and cryptocurrencies have become the buzzword, and many people now look forward to building applications and investing their money into them. A few Blockchains have made it all their way to be on the list of top 10 cryptocurrencies. Let’s discuss Litecoin vs Ethereum.
Blockchains are the decentralized network of various nodes on which people can do peer-to-peer transactions and use various financial instruments. As the web3 industry is gaining popularity daily, many new blockchains and cryptocurrencies have come up to offer unique features to users.
Litecoin vs Ethereum – An Overview
Litecoin is one of the oldest alternative cryptocurrencies to Bitcoin cash. It was launched a decade ago to be the silver to Bitcoin’s gold. It is one of the largest cryptocurrencies in the crypto market industry, with a significant Market Cap.
Litecoin vs Ethereum- Comparison
|Creator||Charlie Lee||Vitalik Buterin|
|Features||Peer-to-peer cryptocurrency, better than Bitcoin in terms of block time and transaction fees.||Blockchain platform, Smart contract operations|
|Fees||Around $0.04 per transaction||Around $0.85 per transaction|
|Algorithm Used||Proof of work using Scrypt||Proof of stake using Ethash|
|Supply Limit||84 million coins||No Fixed Supply Limit|
|Block Reward||25 LTC||2 ETH|
Litecoin has seen an all-time high price of USD 420 in 2021. Ethereum has seen an approximate 4k USD all-time high.
Ethereum platform is a decentralized peer-to-peer network that works on the strong fundamentals of Bitcoin. Along with the features of Bitcoin btc, it also supports the deployment of decentralized applications using smart contracts.
Ethereum and Litecoin are backed by some of the best teams of Engineers in the world. Some of the essential things we will discuss are the Differences between Litecoin vs Ethereum, Similarities, different use cases, and how they work. If you want to know all this, keep reading this blog till the end.
Litecoin vs Ethereum-At A Glance
What Is Litecoin?
Litecoin is like any other blockchain, it runs as an open-source Blockchain without any central authority controlling it. Every Litecoin Node has the full copy of the Complete blockchain data to ensure that there are no duplicate transactions. Also, there are miners who help with the process of validating the new transactions and blocks. Litecoin transactions use an entirely different hashing algorithm, unlike other blockchains such as Bitcoin and Ethereum.
Litecoin supports Peer to peer transactions only, unlike Ethereum. The Development of Decentralised Applications is highly centered on the EVM compatible Blockchains and Ethereum.
Pros And Cons Of Litecoin
- Litecoin is open-source blockchain technology. There is complete information available on different platforms like Github.
- Litecoin is a peer-to-peer payment system, just like Bitcoin technology.
- There is no central authority controlling the Litecoin Blockchain.
- Litecoin offers inexpensive, fast, and secure transactions. You can use Litecoin to send money to your friends and relatives.
- Litecoin has some branding issues. Although Litecoin is quite similar to bitcoin, there are a lot of concerns related to the security of Litecoin.
- In recent few times, Litecoin has lost its credibility. Litecoin saw an ATH a few years back, but due to the fall in price, a lot of people questioned Litecoin.
Is Ethereum A Good Investment?
Ethereum is a global computer that consists of thousands of nodes that work together to validate different transactions happening on the Ethereum Blockchain.
The main goal of Ethereum is to offer a complete system with User control over their data and a platform to build decentralized applications. Any developer who wants to deploy their Application on Ethereum requires an Ether token.
In recent few times, a lot of Applications such as Decentralised Applications and NFT marketplaces have been deployed on Ethereum. It is one of the preferred choices for bitcoin blockchain Engineers to deploy their applications.
If you want to make an investment in ether tokens, this could be the best choice for the digital asset, as it is one of the oldest Blockchains that offers a variety of features as we discussed above.
Pros & Cons Of Ethereum
- Smart contracts: Smart contracts are programs that execute certain functionalities based on the conditions specified in the program. Smart contracts are now used for various blockchains with EVM architecture.
- Ethereum Blockchain: Blockchain is where all the historical data is stored. Various computers from all over the world store the complete data of blockchain and process incoming transactions using consensus Algorithms such as Proof of Work and Proof of Stake.
- EVM – The Ethereum Virtual Machine is the underlying architecture that executes smart contracts. EVM’s main feature is converting the human-written code to bytecode, which any machine can read. For Ethereum, there are over 140 different Codes that perform specific functionality.
- Competition: A lot of new blockchains are coming up that run smart contracts natively. For example, Polkadot, Cardono, and Binance Smart Chain are emerging blockchains.
- Proof of Work Consensus Algorithm: Ethereum uses a consensus algorithm, which makes ether transactions quite expensive.
- High Transaction Fee: This is one of the drawbacks, that prevents the Ethereum blockchain to become mainstream. For every transaction, users need to pay a huge amount of fees.
Litecoin vs Ethereum: Similarities
Litecoin and Ethereum are open-source technologies, and anyone can access their code.
Ethereum and Litecoin consume less Electricity than Bitcoin transaction. Due to the considerable consumption of Electricity, Litecoin has become relatively inaccessible, and mining costs have crossed the roof.
For both Ethereum vs Litecoin, the transaction confirmation time is quite similar. It takes less than a minute to process the transaction on any of the chains.
On Ethereum, the mining takes approximately 10-20 seconds, whereas, on Litecoin, it is pretty less.
Litecoin vs Ethereum: Differences
Ethereum Is Not Only A Transactional-Based Blockchain
Litecoin is a popular Cryptocurrency platform that only allows developers to make transactions similar to bitcoin. Whereas Ethereum is a full-fledged blockchain and offers a capability to developers to build applications on top of it by using the functionality called a smart contract. The complete underlying infrastructure is decentralized and managed by different nodes.
The Reward Mechanism
Ethereum and Litecoin use both Proof of work Consensus algorithms, and so Ethereum will migrate to the Proof of stake. Ethereum rewards 5 Ethers to a very block validator, whereas Litecoin offers 25 LTCs. The value of both coins is quite different, so one should not think that Litecoin provides more value. Based on the exchange price, you can get the exact value of the reward.
On Bitcoin Network, the transaction cost is relatively consistent. At the time of writing this blog, it costs around 0.00035 LTC for one transaction. At the same time, Ethereum uses an entirely different approach to calculate the gas. There is a predefined amount decided for every action happening on Ethereum, such as the transfer of erc20 tokens from one chain to another. Also, the cost is determined based on the complexity of the transaction and the amount of storage it needs.
Proof Of Work
Ethereum and bitcoin both use a Proof of work algorithm for the mining process. But for both chains, the use case is quite different. Litecoin Mining uses a different algorithm called scrypt that enhances the transaction speed and uses fewer resources such as electricity and computational power. At the same time, Ethereum uses an algorithm called ethHash. It is specifically designed for the Ethereum blockchain. The reason for creating such an algorithm was to prevent mining centralization.
Litecoin vs Ethereum: Features
Litecoin is one of the preferred ways to make payments over the border. Some companies like Travala.com, eGifter, Alza.cz, and others use Litecoin as a payment mode. As it offers fast transactions at lower transaction fees, multiple companies are now looking to integrate Litecoin for payments. Some third-party applications now have been published for crypto users to make peer-to-peer payments to different merchants or companies using the Litecoin cryptocurrency.
For Making Donations
You can use Litecoin for making donations and charitable purposes. Some standard organizations that accept Litecoins are Cedars Home for Childer and AfricaAid. Many video creators and bloggers use Litecoin for gifts, preventing them from paying capital gain taxes.
Litecoin offers inexpensive, fast, and secure transactions. You can use Litecoin to send money to your friends and relatives.
Advantages Of Litecoin vs Ethereum
✔ Lightning Network
Lightning Network is the scaling solution built on top of the Litecoin chain. It enables users to conduct transactions faster and with a low fee. Also, this extra layer consists of independent payment channels. The Lightning Network was the first network to be implemented on Litecoin.
This is another protocol on Litecoin that is an enhanced version of the Proof-of-Work algorithm. It doesn’t consider individual inputs and outputs to the transaction to improve privacy and reduce traceability. MimbleWimble was launched on the test in 2020, focusing on enhancing the user experience for the non-technical users of Litecoin.
✔ Segregated Witness
One of the unique features implemented soon after the launch was Segwit. Although it was proposed for bitcoin, Litecoin used this enhancement before. SegWit is the enhancement that enhances the scalability of the transactions by segregation the digital signature data on every transaction and using space efficiently.
Advantages Of Ethereum vs Litecoin
✔ Decentralized Finance
The blockchain-based development of financial services and products frequently makes use of Ethereum’s smart contracts. With Defi Applications, User has complete control over their funds, and they can transfer them without any intermediary party. Some of the typical Applications are Uniswap, Aave, and many more.
✔ Non Fungible Tokens And NFT Marketplaces Like OpenSea
NFTs are nonfungible tokens representing the ownership of any asset in the physical world. Recently, many applications have come up on Ethereum network that allow various creative people to express their artwork or music through NFTs and sell them.
✔ Decentralized Autonomous Organizations Or DAOS
DAOs are Autonomous organizations analogous to the companies that function per the conditions specified in the smart contracts. Most DAOs have in-built treasuries that can only be accessed when conditions in the smart contract are met. This is a better alternative to traditional companies, as there is no hierarchy such as CEO, CFO, or Manager. Also, DAOs enable a transparent and democratic way of operating the company.
How To Trade Litecoin?
If you are looking to trade Litecoin, there are three significant crypto exchanges, such as Kracken, Papperstone, and Bitfinex, that you can use. There are some essential steps that you need to follow to buy a Litecoin.
Open an account on any of the exchanges. Do the KYC and complete the registration process.
Fund your wallet with some stable coin like USDC or USDT based on the Litcoin pair available.
Place an order by filling the quantity of Litecoin.
Save your tokens into the native cryptocurrency wallet or store them in the Hardware wallet.
How To Trade Ethereum?
Buying an Ethereum can be done either on decentralized exchanges or the centralized exchange. To buy Ethereum on Decentralised exchanges like Uniswap, you need to follow some steps.
Fund your wallet with a stablecoin like USDC or USDT.
Based on the Liquidity Pool available on the Uniswap, you can choose a pair such as ETH/USDC or ETH/USDT.
Swap the USDC or USDT for Eth.
Store your Ethereum on the hardware wallet.
Final Verdict On Litecoin vs Ethereum
In a nutshell, both the blockchains are unique when it comes to use cases. It can be difficult to choose the best blockchain between Litecoin vs Ethereum because it depends on the different use cases. But when it comes to investment, most people prefer Ethereum as the safest investment compared to Litecoin. Many people hold the LTC, but since 2017 it has been reclaimed as a less invested digital currency. This doesn’t mean that you can’t make money out of it. There are different strategies to make an investment, if you want to invest in the top 5 cryptocurrencies, then you can consider both Ethereum and Litecoin network as they are quite the oldest blockchains.
Frequently Asked Questions
Litecoin can reach the price of Ethereum, but it needs to have a trillion market cap. It’s possible, but there has not been much growth seen for Litecoin.
Ethereum is a decentralized computer that offers a platform for decentralized applications. Whereas Litecoin only allows the Peer to peer payment and does not support smart contracts.
There has been tremendous progress made in The Ethereum Community. Soon Ethereum will be migrating to the proof of stake, which would change a lot of concepts. Investing in constantly progressively Blockchain like Ethereum is always Beneficial.
During the Defi Summer, many decentralized finance products were deployed on Ethereum, making it a pretty demanding blockchain.
The main difference is that Ethereum has a complete ecosystem that allows developers to build any kiApplicationations.