Both Ethereum and Litecoin are designed to facilitate transactions and are built using blockchain technology. However, the two networks operate differently. In this article, we will explore their key differences and discuss how each works.
Launched in late 2011, Litecoin is an open-source, decentralized blockchain created to facilitate peer-to-peer transactions. The network’s codebase is similar to that of Bitcoin. Litecoin was developed by Google’s ex-employee Charlie Lee.
Here are the key differences between Litecoin and Bitcoin:
- Litecoin has quicker block times. That means miners can mine more tokens faster than on Bitcoin.
- Transactions on Litecion are faster and cheaper compared to Bitcoin.
- Litecoin uses the Scrypt hashing algorithm, while Bitcoin uses encryption algorithms known as SHA-256. With Scrypt, big ASIC hardware makers such as Bitmain can’t control the mining process on Litecoin.
Litecoin’s native token LTC, which is used to pay for network fees, has a supply cap of 84.1 million tokens.
Ethereum is the second-biggest blockchain after Bitcoin. But unlike the Bitcoin network, Ethereum comes with a smart contract functionality, meaning anyone can develop decentralized apps on it.
Prominent crypto player Vitalik Buterin is the founder of the Ethereum blockchain, which launched in July 2015.
Ethereum provides a development toolkit to developers looking to build projects on the blockchain. There are thousands of decentralized applications already running on Ethereum.
Like Litecoin, Ethereum also has its native token called Ether or ETH. Besides being used to pay for gas, ETH is accepted as payment by the various apps built on the blockchain.
Major Differences Between Ethereum and Litecoin
Ethereum Vs. Litecoin: Mechanism
One of the major differences between the two networks is the type of consensus mechanism used. Litecoin uses proof-of-work (PoW), while Ethereum uses proof-of-stake (PoS).
A PoW consensus mechanism is used to select the miners to validate a particular block of transactions. These miners must dedicate computing power to solve tough mathematical problems because that’s the only way to prove they have executed the ‘work.’
On the other hand, PoS blockchains, like Ethereum, allow users to stake ETH tokens to become validators. As of July 2023, the minimum ETH that a user must stake to start validating transactions is 32.
Initially, Ethereum used the PoW mechanism. It transitioned to PoS last September. According to a ConsenSys report, the move lowered the network’s energy output by nearly 99%.
Ethereum Vs. Litecoin: Transaction Cost
A network fee is an important factor to consider when executing a crypto transaction. On Litecoin, every transfer attracts a fee of about $0.4. As for Ethereum, the transaction fees vary depending on the network congestion. But generally, it is considered more expensive to make transactions on Ethereum than on any other blockchain. On a normal day, the fee ranges between $4 and $6.
Ethereum Vs. Litecoin: Transaction Speed
The two blockchains boast quicker transaction speeds than Bitcoin. However, Ethereum is much faster than Litecoin. While new blocks on Ethereum are created every 20 seconds, it takes Litecoin 2.5 minutes to do the same.
Ethereum Vs. Litecoin: Coin Price and Market Cap
As of July 12, 2023, ETH’s market capitalization stands at $226.2 billion and changes hands for $1,887. The token is the second-largest by market valuation.
On the other hand, LTC’s market cap stands at $7.18 billion and trades for $96. The crypto asset is ranked 11th.
Ethereum Vs. Litecoin: Decentralized Application and NFT Support
In this category, Ethereum remains undefeated. The blockchain is considered the best for minting NFTs and creating decentralized applications. Most of the popular NFT collections, like Bored Ape Yacht Club, Mutant Ape, and Azuki, run on Ethereum. There are multiple decentralized finance protocols also built on the network to help bank the unbanked.
On the other hand, Litecoin is primarily developed to facilitate transactions. However, it now supports NFTs, thanks to Ordinals, a protocol designed to enable NFT minting on PoW blockchains.
Ethereum and Litecoin are among the most established blockchains. Each plays a huge role in the crypto industry, and users can utilize them depending on their objectives within the Web3 space.
SureTradeGroup.com is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site is paid content that is not written or posted by our writers or editors and the opinions expressed do not reflect the opinions of this website. Any disagreement you may have with brands or companies mentioned in articles will need to be taken care of directly with those specific brands and companies. The responsibility of anyone who may click links in our articles and ultimately sign up for that product or service is their own. Forex, Stocks, Cryptocurrencies, NFTs and Dogital Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.