Bitcoin vs Litecoin

Bitcoin vs Litecoin

Bitcoin vs Litecoin

Every time the idea of cryptocurrency trading comes up, most people automatically think bitcoin and only bitcoin. And it’s no surprise, really, considering that bitcoin is the original. Satoshi Nakamoto started the current cryptocurrency wallet fad with his seminal white paper and the subsequent introduction of bitcoin.

But bitcoin is not the only kid at the playground. Litecoin, introduced only two years after bitcoin, was one of the first cryptocurrencies to challenge bitcoin’s dominance, even though the balance – litecoin to bitcoin – hangs heavily in favor of bitcoin. The relationship between litecoin and bitcoin, however, is not one of simple Bitcoin vs Litecoin rivalry. Both cryptocurrencies are based on the same principle and the same philosophy. The creators of litecoin even envisioned litecoin as the silver to bitcoin’s gold.

Still, we may argue that precisely because the differences between litecoin and bitcoin are not quite as glaring and self-apparent as one may expect, it is important to get familiar with them and look beyond the cryptocurrency prices before making a definite choice on one or the other.

Bitcoin vs Litecoin: Minor Differences

When it comes to cryptocurrency trading, litecoin is second only to bitcoin. As number one and number two, it is only natural that many would want to compare them. This desire can sometimes lead to a lot of hair-splitting. Even though the difference between litecoin and bitcoin amounts to more than just their names, there are some superficial differences with little to no impact in the long run.

For example:

  • Bitcoin has been around for longer. It was launched in 2009. Litecoin hit the marker in 2011. Bitcoin vs Litecoin: 0-1 in favor of bitcoin.
  • Litecoin transactions are confirmed to be much faster than bitcoin transactions. It takes only 2.5 minutes to confirm a litecoin transaction, while the time needed for bitcoin is 10 minutes. The added speed has a drawback, however: the litecoin blockchain is proportionately larger, resulting in orphaned blocks. They occur when two miners produce blocks at the same time.


If a merchant really needs the confirmation, the difference in confirmation times represents a clear advantage for litecoin. Still, the difference in confirmation time can be circumvented, for example with the proposed Inter-Channel Payments system and similar systems that increase the security of zero-confirmation transactions.

Still, Bitcoin vs Litecoin:  tied 1-1.

  • When it comes to the number of coins that can ultimately be obtained through mining, litecoin is once more in the forefront. At 84 million, the total final number for litecoin is higher than bitcoin’s 21 million coins. In reality, this difference is insignificant, since the coins are nearly indefinitely divisible. The smallest transferrable bitcoin quantity is one hundred millionth of a bitcoin, called a “satoshi”. Still, some argue that the psychological effect of decimals may potentially be quite significant. People prefer round numbers and transactions in whole units, not small, abstract decimals. Nowadays there are multiple ways to circumvent this. Most importantly, many services display the value of your cryptocurrency wallet in fiat currencies, bypassing the psychological hurdle.

Bitcoin vs Litecoin: 2-1 in favor of litecoin.

  • Bitcoin was developed by Satoshi Nakamoto, whose true identity still remains unknown and who has discontinued his involvement with the bitcoin project. The developer behind litecoin is Charlie Lee, a former Google engineer. He has made public appearances and is still very focused and involved with litecoin.

Bitcoin vs Litecoin: 3-1 in favor of litecoin.

Charlie Lee, Litecoin Creator

Charlie Lee, Litecoin Creator

Bitcoin vs Litecoin: Major Differences

At the moment, the biggest difference between litecoin and bitcoin boils down to the intricacies of Bitcoin vs Litecoin mining.

Simply put, if you are an average user and you can’t afford a computer specifically for mining, litecoin is the better choice, since it requires less advanced hardware.

This difference between litecoin and bitcoin stems from the cryptographic algorithms which are employed. These proof of work algorithms generate new blocks and are used in mining to release coins. Which algorithm is used determines how the cryptocurrency is mined. Bitcoin utilizes the SHA-256 hashing algorithm, while litecoin relies on a newer algorithm called Scrypt. Bitcoin’s algorithm benefits greatly from large amounts of processing power, which means that parallel processing greatly increases the speed of these calculations. The users first tackled this problem by buying computers with better CPUs, while later computers with several powerful graphic cards/graphics processing units (GPU) proved indispensable. And while in the past, modified though they were, regular personal computers were enough to perform the task of mining, nowadays bitcoin mining requires specialized CPUs called Application-Specific Integrated Circuits (ASICs). These circuits are produced for the sole purpose of mining bitcoins and seem out of reach for anyone only tentatively interested in mining.

Bitcoin vs Litecoin Comparison

Bitcoin vs Litecoin Comparison

On the other hand, Scrypt (the litecoin algorithm) should be easier on the hardware. It benefits from a large quantity of RAM, which is both cheaper and easier to find than ASICs, since it is a central component of all PCs. Although, some new developments indicate that even this difference between litecoin and bitcoin might soon become a thing of the past. There are at least two companies that are already marketing ASICs for litecoin, meaning that there has never been a better time than now to get a foot in the door as far as litecoin mining is concerned. The early gains, now when average hardware is still good enough, should be enough to invest in better equipment with a bigger payoff down the line.

Bitcoin vs Litecoin: All Things Considered

Taking everything into account, on the surface it may seem that litecoin comes out on top over bitcoin on almost all counts. This is precisely the problem with these comparisons: much is left out that cannot be quite as easily described. In reality, even without studying the subject matter too closely, it is clear that bitcoin dominates the world of cryptocurrency trading. Its very recognition and media presence form an x-factor of sorts, giving it an edge over litecoin. The stories about bitcoin, whereby various people report how their cryptocurrency wallet made them unexpectedly rich, add to the popularity of bitcoin and serve to raise its value.

In economic terms, bitcoin’s market capitalization currently dwarfs that of litecoin, its cryptocurrency prices reflecting its status as undisputed market leader. This very fact makes bitcoin the premium cryptocurrency, making it the obvious choice in the whole Bitcoin vs Litecoin debate. However, this does not mean that the market capitalization of litecoin will not soon follow suit. Even when it comes to this crucial feature of Bitcoin vs Litecoin mining, it is much less a fundamental difference, but more a case of litecoin somewhat lagging behind.

As mentioned before, bitcoin and litecoin are not rivals. Studies have shown that there is a direct litecoin to bitcoin correlation when it comes to public interest in cryptocurrency investments.

Litecoin appears to be trailing bitcoin in almost all aspects. Which, as weird as it may sound, is not necessarily a bad thing. Since bitcoin has shown that growth is followed by an ever greater barrier to entry, litecoin’s underdog status may end up being its biggest asset.  It has a lot of room for growth, so now may be a good time to go for it. The only danger is, since bitcoin and litecoin seem correlated, if bitcoin goes down during its heyday, litecoin will likely follow suit without ever reaching that high. But investing in cryptocurrency means accepting that risk and going for it regardless. Past experience shows us that the earlier you hop on, the better. It’s not about Bitcoin vs Litecoin as much as about having faith in what the idea of a cryptocurrency is all about, as well as recognizing a good opportunity when you see one. And so far, both the litecoin and bitcoin train show no sign of stopping.

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Author: Ben Prescott

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