Newcomers to the world of cryptocurrencies don’t fully understand the difference between different digital currencies and when cryptoassets should be used. Let’s find out the difference between bitcoin and litecoin and what these digital currencies are used for.
Let’s start at the beginning
Bitcoin is the very first cryptocurrency in the world, in the image and likeness of which other digital currencies were created. Initially, the asset was used as an alternative payment method. For example, in 2010, American Laszlo Heinitz paid 10 thousand bitcoins to buy two pizzas. At the time of purchase it was about $800, but in March 2022 this cryptocurrency is worth more than $44 million.
Many outlets still use bitcoin as a means of payment, but in recent years, cryptocurrency has solidified its status as an alternative investment asset. Some have even begun to refer to bitcoin as “digital gold” because they believe it can protect capital from depreciation due to inflation. Bitcoin has been recognized as a full-fledged investment class asset in 2021 by major banks such as JPMorgan, Goldman Sachs, Morgan Stanley and others.
Bitcoin, as an investment asset, began to be used by Tesla, a world-renowned manufacturer of electric cars. Back in February 2021, the company announced its purchase of the cryptocurrency. Tesla holds bitcoin on its balance sheet to this day.
How bitcoin differs from litecoin
The status of an investment asset and high volatility prevents bitcoin from being used effectively as a means of payment. This is clearly indicated by the case of buying pizza for bitcoin, and it is not an isolated event. A more stable asset, such as Litecoin, is needed to be used as a means of payment. Litecoin is more suited for payment transactions because it was originally created for that purpose.
How bitcoin differs from litecoin
LTC developer Charlie Lee wanted to create an easier alternative to bitcoin, so he reduced the block generation time to 2.5 minutes. This means that it takes less than 3 minutes to make a transfer in the Litecoin network. For comparison, one block in the bitcoin network takes 10 minutes to mine.
Another advantage of Litecoin as a means of payment is lower fees. Charlie Lee noticed that with bitcoin it is unprofitable to make transfers of small amounts of money (up to $10 to buy coffee, for example) because the commission for bitcoin transfer may exceed the sum of transaction itself. That’s why in LTC network the transaction fees are much lower. At the beginning of March 2022, the average fee on the Bitcoin network is $0.016, according to the Bitinfocharts service.
Which is more profitable: bitcoin or litecoin
If you consider cryptocurrencies in terms of profitability and efficiency of use, you need to consider for what purposes digital currency is purchased. If you need to buy something for cryptocurrency, it is better to use Litecoin. Many organizations already actively accept LTC, as the cryptocurrency allows you to pay for goods and services with minimal commissions. With Litecoin, it is possible to pay for the purchase of Samsung devices or a movie ticket for the largest movie theater chain in the U.S. – AMC.
Which is more profitable: bitcoin or litecoin?
If you want to save and multiply funds, it is better to buy bitcoin. You should consider the fact that investing in bitcoin is a long-term method of making money. In 2021, bitcoin rose by 60%, in 2020 by 308% and in 2019 by 95%.
For many years, the developers of Litecoin did not release any updates to their project. However, in January 2022, it became known that in the near future LTC will receive a new update – MWEB, which will expand the functionality of the cryptocurrency. According to preliminary information, the speed of transactions in the Litecoin network could increase tenfold.
Why Litecoin beats Bitcoin
Litecoin was created in 2011, so its developers eliminated some disadvantages that bitcoin had. What are the advantages of LTC:
- Fast block generation and transactions (2.5 minutes);
- Low commissions for transactions (less than $0.1);
- The presence of a team of developers who release updates.