There are so many cryptocurrencies these days that getting your foot in the door as an investor can be challenging. Thankfully, you don’t need to be confused for long, as this article (and others) discuss the most popular cryptocurrencies in detail and compare their advantages and disadvantages.
In this article, we compare two of the earliest crypto assets, Bitcoin and Litecoin, to get a better idea of where you should invest your money.
History
It is always important to look at the history of a digital asset before investing, as it can give you some extra information to help you make an informed decision.
Bitcoin (BTC)
Bitcoin got the crypto market rolling back in 2009 when it was released to the public by an entity known as Satoshi Nakamoto. To this day, no one is exactly sure who Satoshi Nakamoto is or if the entity is a group of people instead of an individual developer.
The decentralized currency was created as a direct response to the global financial crisis that affected the world from 2007 to 2009. During the Great Recession, the world lost faith in banks and governments, which is why Bitcoin was intended as an alternative payment system to replace fiat currency.
Litecoin (LTC)
Litecoin launched in 2011 and was created by former Google engineer Charlie Lee. Lee took inspiration from the Bitcoin network but was unimpressed by the speed of Bitcoin transactions, which is why Litecoin transactions are about four times faster.
Litecoin mining was also made much less taxing than Bitcoin mining, so it could be mined on laptops and personal computers.
After the initial development period of Litecoin, Charlie Lee decided to leave Google and dedicate all of his time to the Litecoin network. With the help of other developers, the crypto asset was soon up and running.
What It Does, And Why It Was Created
It’s important to know why a cryptocurrency was created, as they were all created with different intentions.
Bitcoin (BTC)
Bitcoin is the original cryptocurrency and was first created to allow people to send money to one another over the internet.
As mentioned, the Bitcoin blockchain became an alternative to fiat currency during the global financial crisis from 2007 to 2009. However, Bitcoin is no longer used in this manner, as it has become an asset in itself, which is why people now hold onto their Bitcoin tokens until they can sell them for a profit later.
Bitcoin Cash was created later to operate in the way that the original cryptocurrency was intended to.
Litecoin (LTC)
Litecoin was created only a year after Bitcoin arrived on the scene, as the founder, Charlie Lee, wanted to create a network similar to Bitcoin. As a result, Litecoin is essentially a Bitcoin fork with a few slight differences.
Lee thought that Bitcoin’s transaction speed was far too low, which is why Litecoin uses the Scrypt consensus mechanism instead of the SHA-256 encryption algorithm used by Bitcoin.
Litecoin was also intended to be a cheaper alternative to Bitcoin, hence why the supply cap was later raised to 84 million coins, while Bitcoin’s supply cap is 21 million coins. Litecoin has also always boasted lower transaction fees than Bitcoin.
Price History
Cryptocurrency can change in value at any given moment, which is why being aware of the price history of a digital asset is incredibly important before investing, as it can help you determine when the best time to invest will be.
Bitcoin (BTC)
Bitcoin has come a long way since it launched over 13 years ago. Back in 2018, one Bitcoin was worth a measly quarter of a cent ($0.0025), which is a pittance compared to its current value.
The cryptocurrency would reach its first major milestone in November 2013, when the value of a Bitcoin token surpassed the $1,000 mark.
Bitcoin would increase in value incrementally over the years, with a few troughs here and there. The crypto market began to boom by 2017, as the value of a Bitcoin had reached $10,000 – a figure that would double in only one month.
2021 was likely the biggest year for nearly all cryptocurrencies, and this also applied to Bitcoin, as one token was worth $66,974.77 by October 2021. Unfortunately, the market crashed rather spectacularly in 2022, and today a single Bitcoin is worth $20,584.90.
Litecoin (LTC)
When the first Litecoin tokens were made available to the public in May 2013, one token was worth $4.18.
The price of Litecoin tokens would increase in the months following their release, as by November 2013, Litecoin’s price would reach $38.74 before plummeting back to less than $10 until 2017, when a token would eventually cost $237.57.
The value of a Litecoin peaked in April 2021, when a token was worth $255.79. In 2022, the value of Litecoin would once again plummet due to several external factors that affected the crypto industry as a whole, which is why a single Litecoin token is currently worth $55.44.
Market Cap
Market capitalization is another critical aspect of cryptocurrency, as it will help you determine the total value of a digital asset.
Bitcoin (BTC)
Bitcoin has the highest market capitalization in the entire cryptocurrency industry, as it is also one of the market’s oldest and most well-known digital currencies.
Bitcoin has a market cap of $369.63B as of October 2022.
Litecoin (LTC)
While Litecoin has been around for nearly as long as Bitcoin, it has four times more coins than Bitcoin, which lowers the value of each coin.
Litecoin has a much lower market cap of $3.96B, making it the cryptocurrency with the 20th-highest market cap.
Similarities
While Bitcoin and Litecoin came about at a similar time, there aren’t many similarities between the two cryptocurrencies. Both currencies technically operate on a proof-of-work consensus mechanism, both of their tokens can be purchased on major crypto exchanges, and both need to be stored in specialized digital wallets.
Differences
There are many differences between Bitcoin and Litecoin. Firstly, it takes Bitcoin 10 minutes to generate a single block, while Litecoin takes only 2.5 minutes.
The Litecoin network also uses the Scrypt consensus mechanism, which requires far less computing power when mining than Bitcoin. This allows Litecoin users to mine using their laptops or personal computers.
There is a limited supply of both tokens; however, while Bitcoin can never exceed 21 million tokens, Litecoin can accommodate 84 million coins.
Another big difference between the two cryptocurrencies is that Bitcoin has a significantly higher market cap due to a smaller supply of Bitcoin tokens and a higher demand for them.
Risks
Investing always comes with a plethora of risks – necessary risks, as you would not be able to earn back more than your initial investment if the market’s future was predicted with 100% accuracy.
Bitcoin (BTC)
One of the most well-known risks associated with investing in cryptocurrency is that it is a highly volatile industry where massive changes can occur overnight.
This can sometimes mean that you lose your investment entirely. Bitcoin is also unregulated and decentralized, so there will be no one to lodge a complaint with if you experience any issues with your investment.
Litecoin (LTC)
Litecoin is susceptible to all of the risks that can affect Bitcoin; however, the fact that it is a smaller cryptocurrency with many competitors also means that Litecoin’s rivals could overtake it, which could have a serious effect on your investment.
Where You Can Buy It
Bitcoin (BTC)
You can purchase Bitcoin from PayPal, eToro, Kraken, Robinhood, Binance, Uphold, and a few other exchanges.
Litecoin (LTC)
Investors can purchase Litecoin tokens from Binance, KuCoin, Bybit, Kraken, Coinbase, and Gemini.
How Can You Exchange BTC For Litecoin?
You can exchange your Bitcoin tokens for Litecoin tokens by using nearly any crypto exchange that allows you to purchase both cryptocurrencies.
Future Plans
Bitcoin (BTC)
While Bitcoin has fallen from grace since its impressive peak last year, many analysts predict it should return to a similar value as early as 2023.
Litecoin (LTC)
Litecoin has similarly decreased in value over the past year, but analysts have also predicted that it will increase significantly in the years to come.
References
https://www.investopedia.com/articles/investing/042015/bitcoin-vs-litecoin-whats-difference.asp
https://www.statista.com/statistics/807160/litecoin-price-monthly/
https://finance.yahoo.com/quote/LTC-USD/history/
https://coinmarketcap.com/currencies/litecoin/
https://www.forbes.com/advisor/investing/cryptocurrency/how-to-buy-litecoin-ltc/
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