The recent rise of Litecoin
It is similar to its bigger brother bitcoin, so why hasn’t bitcoin seen a similar increase in value? Why use litecoin at all if it is just like bitcoin?
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In this article I teach you the differences, pros and cons.
So… Lets begin!
Litecoin vs. Bitcoin
There is a close connection between bitcoin and litecoin. Its base is the bitcoin code, with a few adjustments which are segwit (learn more about what segwit is here) and the block time.
The bitcoin community has not yet reached a consensus regarding segwit, but litecoin already has segwit implemented. If you do not know what segwit is, this article on the bitcoin segwit discussion is perfect for you. The litecoin community quickly reached a near 100% consensus and the implementation was a success2. It is easy to see why users choose to use litecoin instead, a decisive community and user base is crucial to cryptocurrencies success.
Bitcoin currently uses a 10 minute block time. This means that the bitcoin network generates a new block every 10 minutes. Litecoin currently uses a 2.5 minute block time instead3. What differences does the block time make?
Benefits of a shorter block time are:
- Faster 1 block confirmations – After a confirmation double spending attacks are impossible, so a faster 1 block confirmation reduces this risk.
- Shorter block time means that litecoin in theory could handle a higher transaction volume given the same block size.
Negatives of a shorter block time are:
- More blocks resulting in a larger blockchain. More difficult to sync and store on less powerful devices such as mobile phones or weak laptops.
- A very short block time may result in orphaned blocks.
As many merchants can accept 0-confirmation payments of bitcoin4, the 10-minute block time of bitcoin may not be that significant. Choosing a block time is definitely a trade off and preferences wary from users to users.
In my personal opinion, 10 minutes seems a bit too conservative and 2.5 minutes a lot more reasonable.
At this moment, litecoin may have a technical advantage over bitcoin. At least until the bitcoin community reaches a consensus and activates segwit. Bitcoin is still in practice by far the more important coin however. Litecoin has very few trading pairs, except for USD and bitcoin. Almost all trade of cryptocurrencies goes through bitcoin and for this reason I don’t see litecoin coming anywhere near bitcoin in terms of value in a long time.
Generally I am cautious buying cryptocurrencies after a huge pump. At this moment I am not buying any myself. However litecoin does have a very strong core development team and I can see them cementing their place as the silver of cryptocurrencies, to bitcoins gold.
If you are interested in buying litecoin, bitcoin or any other cryptocurrency, make sure you read our exchange reviews!