Currently, there are hundreds if not thousands of different types of cryptocurrencies in the market. Over recent years, cryptocurrency has grown exponentially in both popularity and value.
When looking at cryptocurrencies, Bitcoin was the first to hit the market and is still leading in value. Following closely behind are Litecoin and Ethereum.
The devolvement of both cryptocurrencies aimed to resolve the weak points in Bitcoin. They proved to be fundamental digital assets in cryptocurrency. In comparison, these coins are significantly different in the technical features. Each serves different purposes to different coin
So which cryptocurrency is best? In this article, we will highlight the key features of each, similarities as well as differences.
Vitalik Buterin founded Ethereum and released it in 2013. It’s based on the belief that blockchain technology is capable of more than being a payment-service provider.
Ethereum is a blockchain platform that has its own cryptocurrency, referred to as Ether (ETH) or Ethereum.
Since Ethereum is a programmable blockchain network, it works as a decentralized public ledger. Ethereum verifies and records transactions while providing a marketplace. You’ll find financial services, games, and apps developed on Ethereum.
Ethereum network permits you to custom-make token projects and sell them to interested buyers with ease.
Ethereum can also facilitate other types of financial arrangements. It implements smart contracts and also stores data for third-party applications
You can buy or trade Ethereum on major exchange platforms such as CoinCasso
Ethereum functions as an open software platform supported by blockchain technology. To decentralize it, the blockchain gets hosted on a global network of computers working together as a supercomputer.
Every computer contains a copy of the blockchain so any changes to the network need an extensive agreement.
Ether is second in value after Bitcoin and works as the mode of payment on Ethereum. Similar to Bitcoin, the Ethereum blockchain is a record of the transaction history.
The ether token (ETH) functions as the gas or fuel for contracts and applications built on the Ethereum platform. Instead of transaction fees, Ethereum uses a gas system.
A gas unit determines the amount of computational power needed to complete the transaction in Ether. When you send Ether, you get charged a gas fee.
As a programmer, you can create and market gaming and business applications on Ethereum. Anyone using the network is able to create and publish smart contracts, and use distributed applications (DApps) on the platform.
Smart contracts have codes to ease the exchange of money, shares, content, or other valuable items. These contracts store information about agreements such as property and monetary transfers, and the sets of rules involved.
The contracts are self-executing, and carry out the contract terms digitally. Every step of a smart contract can only get carried out after the previous step is fully executed.
The parties in a smart contract deal with each other directly without the need for an intermediary or a third party.
Smart contracts are then together to create DApps. With DApps, you can generate agreements and carry out transactions directly without an intermediary. For example, you don’t have to use a bank to transfer money to another user.
The DApps and smart contracts can get used with no risk of downtime, fraud, theft, or third-party intrusions. The data that makes up a DApp does not belong to one single entity.
The initial design of Ether cryptocurrency allowed its use within the Ethereum platform. However, recent growth has let to its acceptance as a mode of payment for select merchants and service providers. Some examples of sites that allow Ether as a mode of payment are Overstock, Shopify, and CheapAir.
Ethereum is not vulnerable to hackers and third party interference. This has diversified its usage to storing private information like in the healthcare industry and voting systems.
Ethereum can carry out not more than 15 transactions per second.
Litecoin (LTC) is a cryptocurrency created in 2011 by Charlie Lee, a former employee of Google. It is actually a fork of the Bitcoin blockchain, making it similar to Bitcoin in a number of ways.
Litecoin got launched as a lite version of Bitcoin that is faster, fairer, and cheaper. Since it’s a fork of the Bitcoin blockchain, it uses many features of Bitcoin but there were some changes made to address some weaknesses.
By design Litecoin is a digital currency that supports direct transactions between individuals or businesses. The cost of sending Litecoin is very low and the process is secure.
It works as a public ledger that records all transactions. It also allows the cryptocurrency to have a decentralized payment system.
Although Litecoin transactions are smaller in size, they are faster and cheaper, taking only take 2.5 minutes. Litecoin can process not more than 56 transactions per second, faster than both Bitcoin and Ethereum.
The increased speed allows the network to scale and handle higher transaction volumes. Litecoin also has a maximum supply of 84 million tokens, with 54.26 million in circulation.
Litecoin can get utilized as a global mode of payment. It requires no intermediary such as a bank, credit card company, or payment processing service.
Litecoins get generated through mining, which involves processing a list of Litecoin transactions.
Litecoin utilizes Segregated Witness (SegWit), to facilitate more transactions within a block. SegWit only stores the most vital data on the main blockchain. Having minimal data on each block translates to faster mining.
Litecoin’s network can process more transactions without modifying the software. This is a direct result of the shorter block generation time.
The Scrypt algorithm used to validate blocks on the Litecoin blockchain is easier to compute. It has improved storage efficiency and facilitates faster authentication of Litecoin transactions.
The Scrypt algorithm prevents miners from uniting to cause centralization in the network.
Currently, it’s possible to use Litecoin in many stores and businesses globally.
Exchange platforms are similar to stock exchanges. They buy cryptocurrencies from sellers and offer the currency to buyers at prices close to the real-time trading price.
Both Litecoin and Ethereum facilitate quicker transactions than Bitcoin. The reduced transaction durations allow the cryptocurrencies to remain viable.
Using the POW mechanism, miners can leverage their computational power to resolve cryptographically complex puzzles. As a miner, if you solve the problem by adding a new block to the blockchain, you get rewarded in Litecoin or Ethereum.
Litecoin and Ethereum are both cryptocurrencies, but perform different functions.
Litecoin got fashioned from Bitcoin, the original cryptocurrency. It’s designed to function as digital cash to facilitate peer-to-peer transactions. Since it’s lighter than Bitcoin, the transactions are faster and have reduced transaction charges.
Litecoin’s aim is to offer quick and cheap digital transactions.
In comparison, Ethereum’s function is completely different. Ethereum can get used to fulfill payments. Additionally, it uses blockchain technology to fulfill other functions such as crowd-sourcing funds for new projects. On Ethereum, data is stored in individual blockchain ledgers.
Ethereum uses smart contracts made using code. They facilitate development of decentralized applications (DApps). These apps can run independently, eliminating the need for an intermediary.
Litecoin is purely a cryptocurrency. Ethereum on the other hand has multiple purposes besides being a cryptocurrency. It’s a digital blockchain platform that functions the same way as the internet.
Mining refers to the process of using mining software to attach every block to the current blockchain. When the block gets attached, new units of cryptocurrency get liberated.
As a miner, you are able to inject the new units back into the market. Some crypto networks use mining to validate transactions.
Mining Litecoin functions through a Proof of Work (PoW) system. This means you can use mining equipment such as a computer, to solve complex cryptographic problems.
If you solve the problem first, a new group of transactions get added to the blockchain that records all transactions. By leveraging the computational power, you can earn newly created LTCs.
Currently, Ethereum also uses a Proof of Work (PoW) mechanism to validate transactions. However, through the advanced Ethereum 2.0 due for launch, Ethereum is to convert to a Proof of Stake (PoS) system.
PoS has validators in place of miners. In order to be able to validate new blocks and earn cryptocurrency, validators have to leverage some of their coins.
As a validator, when you discover a new block with transactions, you bet on it getting added to the blockchain. If it’s added, the validators who bet on it are rewarded depending on how much the stake was.
The PoS system will consume less Ether as fuel. When comparing the PoS and PoW systems, there’s a distinct difference. In PoW mining, miners are bound to sell some of the rewards to cover running costs such as electricity.
In PoS, the system consumes less resources so miners are able to continue staking Ether to accumulate more rewards. This makes mining Ethereum preferable over mining Litecoin.
When it comes to transaction speed, Ethereum is superior to Litecoin. Ethereum processes almost 20 times more transactions each second when compared to Litecoin.
On Ethereum, it takes about 15 seconds for a group of transactions to get added to a block chain. Litecoin on the other hand takes about 2.5 minutes.
One major potential disadvantage of having Litecoin is the possibility of SegWit getting introduced to Bitcoin. This will remove the edge it currently has over Bitcoin.
Although Litecoin and Ethereum are both accepted cryptocurrencies, they differ in price trends. This is partially attributed to the supply or availability of each currency.
Currently, the reward for mining a Litecoin block is 25 Litecoins and it’s halved every 840,000 coins. This means that Litecoin generates 420,000 new tokens for every 840,000 blocks
Ethereum has no supply limit, as the same number of coins gets released every year. Litecoin on the other hand has a supply of not more than 84 billion coins.
The reward for mining an Ethereum block is currently 2 Ethers. To control Ethereum supply, it has a lower block mining reward than Litecoin.
The Ethereum network offers a unique platform therefore support from its community of developers is stronger than that of Litecoin.
Ethereum actually has the largest ecosystem in blockchain and cryptocurrency.
Litecoin is yet to establish a clear value for investors by reinforcing the unique value proposition of Litecoin. For instance, you’ll find around 2,700 tweets about Litecoin every day, while Ethereum gets around 10,800 daily.
Litecoin is well designed for use in daily transactions. Since it addresses some of the shortcomings of Bitcoin, its capabilities are more suited to spending rather than storing.
A Litecoin transaction has a fixed cost of $0.4. In contrast, Ethereum gets fueled by gas, enabling enhanced storage, bandwidth and requirements of the transaction.
By design, Ethereum is more of a mechanism to execute smart contracts. The value of Ethereum is in the Ether token, which is useful when betting on contracts and fulfilling payment after a contract gets executed.
Ether tokens are not meant for transacting like Litecoin, they are more like tools.
The mining process of both Litecoin and Ethereum depends on Proof-of-work systems but use different algorithms.
Litecoin mining uses Scrypt algorithm which facilitates high-speed random access memory. This makes it possible to use less powerful computers and reduces overhead costs by using less electricity.
Ethereum in comparison uses Ethash algorithm for mining. This algorithm is unique to the Ethereum network. It was specifically developed to prevent manipulation. A group of miners can’t unite to manipulate the mining power by centralizing it.
In as much as the Scrypt algorithm consumes less electricity, Ethash is more secure from manipulation.
The value of cryptocurrencies is best determined by considering a number of things. For instance, consider future innovations, capabilities, and possible use cases.
The current value of Litecoin is notably lower, which is partly because Litecoin has a smaller developer community.
Since its launch in 2011, Litecoin has proven its resilience, unlike other cryptocurrencies. However, new technologies on Litecoin have limited advances.
Ethereum on the other hand has a large developer community and higher potential. New technologies in different sectors are continuously getting developed on the Ethereum platform.
Ethereum has dynamic functionalities and more potential use cases than Litecoin.
Ethereum works as a decentralized supercomputer running on global networks. It can therefore offer developers computational power to develop revolutionary decentralized applications.
Both coins have stood the test of time, with dedicated teams working on improvements. You’ll also find both on major exchange platforms. With this in mind, is it better to buy Ethereum or Litecoin?
Ethereum is superior to Litecoin in more ways than one. It has a shorter block generation time, resulting in transactions that are faster than Litecoin. The Ethereum network contains more information than the Litecoin network. This plays a role in reducing transaction times.
Litecoin is better suited to make purchases and transactions. Ethereum can handle other types of information exchange besides application development.
If you’re wondering where to buy or trade Ethereum, open an account on the CoinCasso cryptocurrency exchange . Here, in addition to Ethereum, find other cryptocurrencies such as Bitcoin, Tether, Chainlink, Swipe, Serum, Unibright, and Basic Attention Token. You can get a discount on transactions of up to 50% for having a certain number of tokens.
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