Litecoin vs. Ethereum: The Up to Date Comparison
Litecoin (LTC) and Ethereum (ETH) are two of the most popular cryptocurrencies. However, with literally thousands of different crypto assets out there, it can be difficult to compare crypto assets, including Litecoin vs. Ethereum. In this article, we’ll break down the key differences between both and see which one might be better.
Litecoin vs. Ethereum: Purpose
The first thing you should know about Litecoin vs. Ethereum is that the two cryptocurrencies do very different things.
Litecoin is a fork, or split, off the original cryptocurrency Bitcoin, which was envisioned as peer-to-peer digital cash. In essence, as the name would suggest, Litecoin is a “lighter” version of Bitcoin that has faster transactions and lower transaction fees. Therefore, Litecoin’s purpose is fast and cheap digital payments.
On the other hand, Ethereum serves a different purpose entirely. While Ethereum, too, can be used for payments, Ethereum ushered in the era of “Blockchain 2.0”, which called for the use of blockchain technology for things other than just payments.
Therefore, when comparing Litecoin and Ethereum, it’s good to keep in mind that they fulfill two entirely different purposes.
Litecoin vs. Ethereum Mining
One point of comparison between Litecoin and Ethereum is their mining processes.
Mining is the process by which certain crypto networks validate transactions. In the case of Litecoin, mining works via a Proof of Work (PoW) system. PoW involves miners (individuals or groups using their mining devices like computers or specialized mining devices) using computational power to solve difficult cryptographic problems.
Whoever solves the problem first adds new blocks (groups of transactions) to the blockchain (record of all transactions). In return for their effort, they are rewarded with newly created cryptocurrency. In the case of Litecoin, that would be new LTC.
Ethereum also uses PoW to validate transactions; however, with the upcoming launch of Ethereum 2.0, Ethereum is set to transition to a new model: Proof of Stake (PoS).
The way PoS works is different. Instead of miners, you have validators. These validators stake, or lock up, some of their coins in order to have a chance at validating new blocks and getting paid in crypto.
When they discover a new block with transactions, they “bet” on it being added to the blockchain. If the block gets added to the blockchain, validators who bet on that block get block rewards proportionate to their bets. To prevent validators from just betting on tons of blocks or betting on fraudulent blocks, malicious behavior is discouraged through the slashing or loss of ETH.
One of the main benefits of PoS is that it is much better for the environment than PoW, which is very energy-intensive.
However, while PoS will result in less energy consumption for ETH, PoS is still unproven on a large scale. For all of its flaws, PoW has shown its resilience with networks like Bitcoin and Litecoin never suffering from any major hiccups or attacks. Not to mention one fatal flaw with PoS is that it might result in heavy centralization of ETH.
When it comes to PoW mining, miners inevitably have to sell mining rewards to pay for overhead costs like electricity. In the case of PoS, which isn’t very resource-intensive, validators can just keep on staking ETH, allowing them to gain more and more ETH in the form of block rewards. This can lead to heavy centralization down the line, especially when you consider that there are already some ETH holders with significant amounts of ETH.
Litecoin vs. Ethereum Fees
When it comes to Litecoin vs. Ethereum transaction fees, Litecoin has the upper hand here. Ever since Ethereum became more popular in 2017 due to the ICO boom, Litecoin’s average transaction fees have been lower than those of Ethereum’s:
Litecoin vs. Ethereum Speed
While Litecoin does have the upper hand when it comes to lower transaction fees, Ethereum has it beat on transaction speed. The average block time, or time it takes for a new block or grouping of transactions to be added to the blockchain, is about 15 seconds on Ethereum and 2.5 minutes on Litecoin:
Litecoin vs. Ethereum Hashrate
One of the main security concerns for a blockchain network is what’s known as a 51% attack, which is when a miner or group of miners gains control of more than 50% of the network’s hashrate, or mining power. Such an attack could allow the attackers to prevent new transactions from getting validated as well as give the attackers the power to reverse transactions, allowing them to spend the same coins twice.
To guard against a 51% attack, a crypto network should have a high total hashrate, which would make it hard for any malicious individual or group to gain control of 51% of the hashrate, since this would involve investing in lots of expensive mining equipment.
While Ethereum and Litecoin have both had higher hashrates than each other in the past, these days their hashrates are pretty equal, making a 51% attack no more likely on Ethereum than Litecoin and vice versa:
Conclusion: So Which is Better?
Although you may have read this article to see which crypto wins the Litecoin vs. Ethereum battle, it’s fair to say that there is no winner, as each crypto fulfills a different role.
Litecoin is the silver to Bitcoin’s gold and has shown its resilience or staying power over the years. This is especially significant when you consider that most cryptocurrencies from the early days of crypto have all but died out aside from the likes of BTC and LTC.
On the other hand, Ethereum has much more functionality and potential use cases than Litecoin, since it wants to be the decentralized global supercomputer that will provide developers everywhere with computational power to build the next generation of decentralized applications.
Therefore, even though Litecoin wins on things like a proven mining system (if Ethereum switches from PoW to PoS) and transaction fees while Ethereum wins on transaction speed, it’s likely that both cryptocurrencies will both play an important role in the ecosystem moving forward.
Litecoin vs. Ethereum Reddit
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This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.