Litecoin vs. Bitcoin Cash: Key Difference and Similarities
Litecoin vs. Bitcoin Cash
Before comparing Litecoin vs Bitcoin Cash, it’s essential to look back at how Bitcoin (BTC) became popular. Satoshi Nakamoto created Bitcoin, which launched in 2009. As BTC coins’ popularity and demand were growing, it became clear that its network couldn’t meet the requirements of millions of users.
For example, Bitcoin’s transaction speed was much slower than PayPal or other payment systems. And because of that, Bitcoin couldn’t be used for everyday payments. This downside inspired people to create other cryptocurrencies that function like Bitcoin but have relatively faster transaction speeds. Thus, Litecoin (LTC) and Bitcoin Cash (BCH) were launched.
Though these cryptocurrencies were created as alternatives to Bitcoin, this comparison of Bitcoin Cash vs Litecoin will show that they are entirely different from each other. For example, the Litecoin network uses a transaction verification mechanism that allows approving transactions within 2.5 minutes. Bitcoin Cash, in its turn, solves the issue of handling lots of transactions at the same time. Unlike Bitcoin, Bitcoin Cash can handle more transactions due to its larger block size (32MB).
This article compares the two most successful altcoins forked from Bitcoin - Litecoin and Bitcoin Cash. Please keep reading to dive deep into their differences and similarities.
Litecoin Overview
Litecoin is a cryptocurrency created in 2011 by computer scientist Charlie Lee. This blockchain-based digital currency is very similar to Bitcoin but has unique aspects. For example, Litecoin transactions are four times faster than Bitcoin’s. Moreover, one can profitably mine Litecoin without expensive ASIC hardware. Litecoin uses a mining algorithm based on the Proof-of-Work (PoW) consensus mechanism.
For a fair LTC vs BCH comparison, it’s crucial to compare the market capacity of both cryptocurrencies. So, the total supply of Litecoin is 84 million coins. The LTC price had its ups and downs, but the highest price that one LTC coin ever had was $412.96, recorded on May 10, 2021. Many call Bitcoin the gold cryptocurrency; Litecoin is the silver one. It’s easy to buy or sell Litecoin.
Bitcoin Cash Overview
Before going deep into which digital currency is preferable, Litecoin or Bitcoin Cash, it’s important to have a general idea about Bitcoin Cash. First of all, it’s worth mentioning that BCH coins have nothing to do with cash or any fiat currency. Unlike most cryptocurrencies in the blockchain market, Bitcoin Cash should be spent rather than held.
This cryptocurrency can be used to make electronic payments since Bitcoin Cash transactions are faster and easier to complete. Such a transaction speed is possible due to the availability of a large block size of its native blockchain. Compared to BTC coins, Bitcoin Cash's block size is 4-8 times larger.
So, BCH transactions are quick enough to allow you to buy a cup of coffee or pizza at a restaurant with this asset. But it’s still recommended to opt for BTC for larger purchases. Though Bitcoin transactions are slower, they are more secure. So, despite similarities between Bitcoin and Bitcoin Cash, these cryptocurrencies fulfill different roles. One can be used for everyday payments at restaurants or stores and functions as a credit card. The other is an excellent long-term investment and preferably used for large purchases.
After reviewing what Litecoin and Bitcoin Cash are and how they function, we can compare them and see what similarities and differences they have.
Litecoin vs. Bitcoin Cash: Differences
Before buying these cryptocurrencies, investors should learn about them and understand their differences. Here are some things to consider.
- Market Cap. It’s no secret that the entire blockchain market is volatile. The prices and market capitalizations of Bitcoin Cash and Litecoin are no different. At the time of writing, the LTC market cap is more than $7.3 billion, whereas BCH has a market capitalization of over $5.7 billion.
- Total Supply. The total supply of Litecoin is 84 million LTC coins. Currently, there are a little more than 70 million coins in circulation. By contrast, there are over 19 million BCH coins in circulation, out of a total of 21 million coins.
- Price. As of April 12, 2022, the price of one LTC coin was $104.61. The highest LTC price was $412.96, recorded on March 10, 2021. Currently, one BCH coin sells at $302.74. This cryptocurrency reached its all-time high price on December 20, 2017. On that day, one BCH coin traded at $4,355.62.
- Transaction Fees. In comparing Litecoin vs Bitcoin Cash fees, the latter is the winner. The fee per BCH transaction is lower than is for Litecoin.
- Maximum Block Size. The initial block size of Bitcoin Cash was 8MB, but it has expanded to 32MB. In comparison, Litecoin has a much smaller maximum size of 1MB. Theoretically, its original size can be expanded and increased to 4MB. This change was possible after introducing the SegWit transaction format into the Litecoin network.
- Average Block Time. Each network has a different block time, which refers to the time required to generate a new block of transactions data. Then, each generated block becomes a part of the entire blockchain. For Litecoin, the block time is 250 seconds on average. The time required for the Bitcoin Cash network to generate a new block is 600 seconds. According to this comparison, the Litecoin blockchain is much faster, but the sizes of blocks should also be considered. As discussed earlier, Bitcoin Cash has a much bigger block size of 32MB, explaining the slower average block time.
- Hashing Algorithm. The hashing algorithm of Bitcoin Cash is known for its high security. Since this cryptocurrency was forked from Bitcoin, it uses the identical Bitcoin algorithm called SHA-256. Litecoin uses a much faster algorithm called Scrypt. Keep reading to learn more about these hashing algorithms in the following paragraphs of this article.
- Average Transaction Speed. Since Litecoin prioritizes speed, its average transaction speed is 2.5 minutes, four times faster than Bitcoin Cash (10 minutes on average).
Litecoin vs. Bitcoin Cash: Similarities
The analysis of Litecoin and Bitcoin Cash shows that these blockchains are entirely different and unique. It’s difficult to find any similarities since they have different market caps, total supplies, translation fees, average block times, etc. However, two similarities can be observed:
- Both cryptocurrencies are currently extremely popular among traders and investors. The popularity of each crypto is connected to its different qualities. For example, Litecoin has high demand because its transaction speed is fast, whereas Bitcoin Cash can be used for everyday purchases.
- Both cryptocurrencies are somehow connected to Bitcoin. Initially, Litecoin was created to be a lighter version of Bitcoin. Meanwhile, the blockchain of Bitcoin Cash was forked from Bitcoin to improve scalability.
Bitcoin Cash vs. Litecoin: Mining
The mining algorithm is one of the core differences between Bitcoin Cash and Litecoin. The mining algorithm of BCH is known as SHA-256, which is the same hashing algorithm that Bitcoin uses. This algorithm was created in 2011 to replace the SHA-1 family of algorithms. The number 256 in the algorithm's name means that the hash value is 256 bits and will always be such no matter what size the plaintext is.
Mining Bitcoin Cash vs Litecoin is different because the latter uses a hashing algorithm called Scrypt. It’s a quicker alternative to the SHA-256 algorithm. Scrypt is ASIC-resistant, meaning that an ASIC Bitcoin miner can’t join the Litecoin network. Only regular personal computers can participate. Compared to other mining algorithms, Scrypt is less complicated. Unlike SHA-256, it consumes less energy but requires more RAM.
Here, it’s important to talk about the hash rate too. Hash rate or hash power is the mathematical processing power. The hashrate means how many calculations the network can perform in a second of mining. A higher hash rate means that more miners are competing for the rewards in the network. At the time of writing, the hashrate of Litecoin is 489.1 TH/s. The Bitcoin Cash hashrate is 1.55 EH/s, much higher than the LTC hashrate. The higher hashrate is also an indicator of more robust security.
Litecoin vs. Bitcoin Cash Fees
Now, it’s time to compare Litecoin transaction fee vs Bitcoin Cash. The transaction fee of Litecoin is $0.0712 on average, and it’s been constantly dropping over the last year. The average transaction fee of Bitcoin Cash is $0.0322. These coins also have different transaction speeds, 2.5 minutes for Litecoin and 10 minutes for Bitcoin. Litecoin transactions are four times faster because this cryptocurrency was created prioritizing speed.
However, it will be fair to mention that technically both LTC and BCH transactions are carried out instantly. But it takes time for the participants of the Litecoin and Bitcoin Cash networks to confirm these transactions. Since the confirmation for LTC transactions is completed faster, this cryptocurrency is more attractive to sellers, and its popularity continues to grow.
Conclusion
To sum it up, there is a difference between Bitcoin Cash and Litecoin. Though both cryptocurrencies were created to fix different downsides of Bitcoin, they acquired popularity and became profitable assets over time. Bitcoin Cash has lower transaction fees, higher hashrate, and more robust security. On the other hand, Litecoin has faster transactions and a better average block time.
These cryptocurrencies have entirely different hashing algorithms. Bitcoin Cash uses the SHA-256 mining algorithm, while LTC uses Scrypt. Overall, both cryptocurrencies are worth investing in. Though they had their price ups and downs, experts’ forecasts indicate that BCH and LTC prices will likely increase in the next few years.
FAQ
Is It Cheaper to Send Bitcoin Cash or Litecoin?
Both cryptocurrencies are easy to use for everyday transactions. For example, you can go to a coffeehouse, grab a coffee, and pay with one of these coins. But as discussed earlier, the transaction fee of Bitcoin Cash is lower than Litecoin’s. However, the latter is constantly working on making the trading fee lower.
Is Litecoin a Good Investment?
Investing in Litecoin was incredibly profitable in the early stage after launching. At some point, the price of a single LTC coin reached $412.96. Although it currently trades at $104.61, Litecoin remains one of the most powerful cryptocurrencies for several reasons:
- Litecoin has a long-standing reputation in the crypto market.
- Its transactions are approved much faster than Bitcoin’s.
- It has a unique hashing algorithm.
If you still have doubts about purchasing Litecoin, it’s recommended to check out the price forecasts for this cryptocurrency. They will give you a general idea of what to expect in the next few years.
Is Bitcoin Cash Better than Litecoin for Beginners?
Comparing these cryptocurrencies shows that both are suitable investments for beginner and experienced investors alike. However, BCH coins seem to be a better option for beginners since they are more secure.
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