Bitcoin v. Litecoin – A Comparison
Bitcoin is often understood as the Gold to Litecoin’s Silver. Conceptually this is an easy way to understand it. There are some similarities. Also, it is easy to connect to this idea and understand it in this way.
However, both Bitcoin and Litecoin are intangible and have the same non-monetary utility. Whereas gold and silver are tangible and have different non-monetary uses.
Silver is far more useful to industry, whereas Gold is almost exclusively a money metal. Gold has almost no cost effective industrial use. Both Gold and Silver are used in Jewelry.
Anyway, in terms of understanding concepts, the Gold/Silver comparison works, as Bitcoin, like gold, is far more rare than Litecoin.
Litecoin uses Scrypt for mining, whereas Bitcoin used SHA256D. Basically, these are the computations that mining computers on the network do. These computations reinforce the decentralised network and verify transactions.
Litecoin’s Scrypt does this 4x faster than Bitcoin’s SHA256D. This means that there will be 4x as many coins ever mined.
Bitcoin is capped at 21 million Bitcoins. Litecoin is capped at 84 millions Litecoins. This also means that Litecoin transactions confirm faster on the network.
However, Bitcoin’s network is more secure at the moment. Because there are more people on it. Currently it may make more financial sense to try to mine Litecoin rather than Bitcoin.
A lot of people are realising this and doing it. At the moment Bitcoin is also more widely known and accepted as a currency than Litecoin, but there are signs that Litecoin is gaining traction.
If you visit weuselitecoins.com you can see an increasing number of merchants and payment processors working with the currency.