Litecoin (LTC) was an early hard fork of bitcoin (BTC). It was launched by former Google engineer Charlie Lee in 2011. Litecoin was never meant to be a competitor to bitcoin. It has been developed with an aim to complement bitcoin. The digital currency has a market capitalization of $4.9 billion.
If you want to read a complete guide about Litecoin you can read this article.
Litecoin vs Bitcoin
Bitcoin was launched by Satoshi Nakamoto in 2009. More cryptocurrencies were launched in the later years to compete with bitcoin. Litecoin was developed with the purpose of being silver to bitcoin’s gold. The cryptocurrency would complement bitcoin rather than to compete with it.
Bitcoin has a limit supply of 21 million coins. On the other hand, Litecoin has a total supply of 84 million digital coins. Bitcoin is subdivided into smaller units called as satoshi to let users complete transactions of smaller amounts. Bitcoin prices have increased significantly. Transaction fee increases if there are more number of transactions pending in bitcoin mempool. At that point it becomes economically unviable to use bitcoin for sending smaller payments of less than $10.
The price of a single bitcoin is simply the ratio of its market capitalization divided by total coins in supply. Price of the digital currency would decrease if its supply was increased. It is pretty similar to how fiat currencies devalue when a government decides to print more paper money. This is where having four times the supply of coins becomes an advantage for Litecoin. It can be used for sending micro payments. Bitcoin is currently trading at 76 times the price of Litecoin.
The scalability debate
Bitcoin has a block interval of 10 minutes. Miners verify transactions in the network and then validate them. Several transactions are added in a block. Any block is validated by miners only after the maximum size of the block has been reached. Critics have argued that bitcoin block interval has become a big problem. If the time between two consecutive blocks reduces then the network can handle more transactions.
Litecoin has a block interval time of only 2 minutes 30 seconds. It can process more transactions that bitcoin. Transaction fee will be low if the network is equipped to handle more transactions.
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