Today, cryptocurrency exchanges operate with different types of cryptocurrencies. It can be popular Bitcoin or less relevant LightCoin. Each of them has its advantages and disadvantages. And before investing in any of them, you should study all their strong and weak points.
Main Differences between Bitcoin and Litecoin
The most famous cryptocurrency, Bitcoin, was launched back in 2009. Its price has grown considerably during all this time, and so has its popularity. Investors who started investing in the early stages of Bitcoin’s development have now significantly increased their financial wealth. However, despite the fact that Bitcoin virtual coins have a significant value on the crypto exchanges, many investors are looking for new alternatives to make their investments. What is the reason for such a pursuit?
The main reason behind it is the popularity of Bitcoin. When this crypto was created, its main developer Satoshi Nakamoto invented a well-functioning peer-to-peer payment system. It included basic security features that could prevent double-spending. This is what brought Bitcoin to the attention of many investors.
However, a few years later, the experience has proven that the BTC network cannot handle the huge number of transactions, which means that the currency remains out of competition with traditional payment methods, such as PayPal. It can efficiently process millions of transactions on a daily basis. Unfortunately, bitcoin cannot reach such a huge scale, and therefore cannot match this level. It is for this reason that other types of cryptocurrencies have emerged, introducing new features and characteristics that were not provided for in the original Nakamoto coin.
As of today, the most noteworthy alternatives to bitcoin are Litecoin (LTC) and Bitcoin Cash (BCH). The process of launching Litecoin took place in 2011. It is very similar to its big brother Bitcoin in terms of system code. However, some of its components have been improved in the new virtual coin taking into account the shortcomings of Bitcoin. This is especially true for the speed at which blocks are processed. It is 21 million BTC in Bitcoin, while it is already 84 million LTC in Lightcoin. There is also another major difference between the two cryptocurrencies – the hashing algorithm. All these features enable Lightcoin to perform much faster transactions compared to Bitcoin, which, as a result, has significantly improved the status of Lightcoin. And today, this cryptocurrency is considered one of the best in terms of capitalization in the crypto market.
Let us also look at Bitcoin Cash. This is the so-called Bitcoin branching, which was introduced to solve certain problems in Bitcoin scaling. Much larger block size is used in the cache, which significantly increases transaction throughput and also reduces transaction fees on the BCH network. All of these improvements have helped Bitcoin Cash gain a strong position in the market and become a decent type of cryptocurrency with a high level of market capitalization. To date, it has taken a position on par with Lightcoin. It is also worth mentioning the features that are important to consider when choosing a cryptocurrency:
- Cost and other indicators. As experience shows, the price of cryptocurrency is quite unstable. It can both increase and decrease, so it is difficult to compare them in the long run; the same applies to market capitalization.
- Hashing and its algorithm. Bitcoin and Bitcoin Cash use a sophisticated SHA-256 algorithm. It provides a fairly strong level of security for the network. Lightcoin uses Scrypt hashing, which is fast and simple
- The average amount of commission per transaction. This factor is very important when choosing a cryptocurrency for investment. Bitcoin’s transaction fee is 0.000014 BCH, while Lightcoin’s is 0.00019 LTC. Taking into account the exchange rate of each crypto, the commission for transactions with BCH is lower.
- Maximum block sizes. Bitcoin Cash was developed to increase the scalability of Bitcoin, so the basic block size is 8 MB, however, there is a provision for expansion up to 32 MB. Lightcoin is based on a 1Mb block, however, due to the introduction of SegWit into the network, the block size may be increased up to 4Mb.
- The average time for blocking. It has a direct correlation with the speed of the transactions being performed. Lightcoin has 250 seconds for a block, Bitcoin Cache has 600 seconds. In this case, the first option has a significant advantage in speed. Nevertheless, do not forget that the sizes of blocks they have are significantly different.
When exploring all the existing differences between Litecoin and Bitcoin, it becomes clear that in many ways they are similar. However, to make the right decision, it is recommended to make a detailed analysis of these cryptocurrencies.
LightCoin and Bitcoin Cash: Main Comparisons
To understand which cryptocurrency is the best to invest in, it is recommended to explore more details and analyze their history of formation on the exchange market. Litecoin is very similar to Bitcoin, however, the developer, given the shortcomings of the latter, merely intended to make a new virtual coin that is better and more advanced.
In 2017, new versions of the cryptocurrency, Bitcoin Cash, and then Bitcoin SV, were created for better scaling of Bitcoin. As they developed, their price and popularity increased significantly among crypto-enthusiasts.
Generation of Bitcoin and Bitcoin Cash takes the same time – 10 minutes. However, the time can reach 20-60 minutes as it depends on how many transactions need to be confirmed. Payment transactions that do not require confirmation are processed quickly, within 5 to 10 seconds, although such transactions are quite risky. Nevertheless, many merchants accept such transactions more and more often. Transaction confirmation time from the receiving side depends on the number of confirmations. Each merchant may require one or two confirmations, some may require six, and others up to 12. If the transaction is fully confirmed, the waiting period is almost the same in any network.
Main Differences in Mining
The main factor in comparing cryptocurrencies is mining. This is a certain process of verifying transactions that will be added to the blockchain register. Miners not only verify transactions but also operate as network protection, and they receive remuneration for these services in the form of digital tokens and part of the commissions from the transactions made. Therefore, if you become a miner, you can earn passive income on a regular basis.
Mining Basics for Bitcoin Cash and Litecoin
Litecoin and Bitcoin Cash mining processes are identical. To engage in mining you need the following:
- An application-specific integrated circuit (ASIC) that is compatible with the SHA-256 hashing algorithm. Before starting the process, it is necessary to make sure that the miner is appropriate for mining the BCH, as their incompatibility will lead to an inability to work;
- stable and round-the-clock Internet access at a speed of 1 Mbit per second;
- BCH wallet.
The cost of the equipment, depending on its type, ranges from one to two thousand dollars. You can start mining only if you have this equipment. It is worth noting that mining alone will not bring much income. It is better to find and join a mining pool. This will greatly increase income because a pool usually consists of several miners. They look for blocks using their equipment and then distribute the income in proportional parts based on the capacity of each miner. You can join pools, such as BCH top, Antpool, F2pool, and many others.
To mine Litecoin, you need to purchase an ASIC miner that is compatible with the Scrypt hashing algorithm, a constant high-speed Internet connection, and an LTC wallet. Same as with Bitcoin, mining alone will not bring much profit, so it is better to join mining pools: Litecoin Pool.org, ProHashing, and F2pool.
Where to Buy and Store Cryptocurrency
The most successful and relevant cryptocurrency has no problems with its purchase. There are crypto exchanges that provide the opportunity to buy virtual coins for dollars or any other currency. Some provide an exchange option. For example, at LetsExchange.io you can easily and safely exchange 350 kinds of cryptocurrencies.
There are also no problems with storage. Different types of wallets are provided for these two types: hardware, desktop, mobile, and paper. Each of them has its positive and negative sides. The choice of the wallet is made depending on where the virtual coins will be used. For daily use, a mobile wallet is a better choice, and for investments over a long period of time, a hardware wallet is a better choice.