Cryptocurrency trading in itself is gaining so much popularity that it remains ever watchful from an investment standpoint. And Bitcoin is no exception in this trade. Going in the same direction, another coin found its way in the top 10 list of cryptocurrencies being traded today. Let’s have a talk about its popularity in making strides with giant cryptos.
What is Litecoin
Litecoin is a peer to peer virtual currency based on blockchain technology, that enables instant and near zero cost payments to anyone in the world.
Although Bitcoin remains the flagship cryptocurrency to many investors and users, that hasn’t stopped developers from releasing hundreds of alternative coins over the years. One of the first to hit the market was Litecoin in 2011, making it one of the oldest “altcoins” and a powerful cryptocurrency in its own right, with a market worth billions.
Competition, edges and limitations
Litecoin’s biggest and crystal-clear rival is Bitcoin. Recent Litecoin Price Prediction says that it has a bright future. But is one cryptocurrency better than the other everywhere, or do they both have their strengths? Let’s have a look at both of them.
Mining
Just like bitcoin, Litecoin is a cryptocurrency that is generated by mining. The motivation behind its creation was to improve upon bitcoin.
Both use Proof-of-work consensus mechanism. The miners use their computational power to solve extremely hard cryptographic puzzles. Now, both Bitcoin and Litecoin go about this a little differently. Bitcoin uses the SHA-256 hashing algorithm for its mining purposes. The SHA 256 puzzles require a lot of processing power, and that gave rise to specialized“application-specific integrated circuits aka ASICs. The only purpose that these ASICs served was bitcoin mining. Mining is also an extremely wasteful process. The amount of power wastage that happens via mining is humongous.
So, to combat these issues, Litecoin uses the Scrypt algorithm. While this algorithm does, in fact, utilize the SHA 256 algorithm, its calculations are way more serialized than the SHA-256 in bitcoin. Scrypt is called a “memory hard problem” since the main limiting factor isn’t the raw processing power but the memory. Running 5 memory hard processes in parallel requires 5 times as much memory. Now, of course, there can be devices manufactured with tons of memory in it, but two factors mitigate this effect:
Normal people can compete by buying simple day-to-day memory cards instead of super-specialized ASICs.
Pound-for-pound, memory is way more expensive to produce than SHA-256 hashing chips.
Security
Another major issue with Bitcoin is the centralization of the currency i.e. more than 50% of Bitcoin’s hash rate is used up by 5 mining pools alone!If a pool ever manages to get 51% hash rate, then they can launch a51% attack on the blockchain, which is not the case with Litecoin.
Transaction Speed
Average block mining speed in Litecoin is 2.5 mins when compared to bitcoin’s 10. Because of network congestion and slow block mining times, the median time waiting time for transactions can fluctuate up to 29 mins in case of Bitcoin. Using Litecoin, merchants can get two confirmations within 5 mins while just one confirmation in Bitcoin will take at least 10 mins.
Another major advantage of the faster block creation time is the variance in miner rewards. Since the time between blocks is so small, more and more miners get the opportunity to mine blocks and earn the mining rewards.
Conclusion
Concluding the popularity of Litecoin, it can be fairly assumed that Litecoin holds some unique edges over the widely known Bitcoin. In the long run, Litecoin will adapt its demand and supply as per the requirement of modern age. Thus, considering an LTC to BTC shift by mass users would be a revolution in the crypto market.
