Litecoin VS Ethereum – What Are The Differences And Which One To Buy?

Litecoin VS Ethereum

The cryptocurrency market is mostly dominated by Bitcoin. However, thanks to the continuous bull run of the crypto market, many new cryptos are finding themselves in the spotlight and investors are showing interest to invest in these new currencies. Litecoin and Ethereum are both well-established cryptocurrencies and they have a large part of the crypto market cap. If you are interested to invest either in Litecoin or Ethereum then you have to choose one that best suits your interests. So, let’s take a look at Litecoin vs. Ethereum and find out which one is the best option for you.

Litecoin is a peer-to-peer cryptocurrency and open-source software project. On the other hand, Ethereum is a decentralized global computing platform and it is also the most developed project in the blockchain space. Litecoin reached an all-time high of $420 in 2017 and since then it hasn’t made its way back. Ethereum broke its 2018 all-time high by February of 2021 and since then it hasn’t looked back. So, if you consider the current condition of these two Cryptocurrencies then Ethereum is the best one to buy.

What Is Litecoin?

What Is Litecoin

Litecoin is a very popular peer-to-peer Internet currency that anyone can use as a payment method anywhere in the world. This is an open-source global payment network and it is fully decentralized without any central authorities. So, individuals can control their own finances and this is one of the main reasons the popularity of Litecoin is increasing day by day. Compared to other available cryptocurrencies, Litecoin provides faster transaction confirmation times and improved storage efficiency.

This Cryptocurrency was introduced in 2011 and it was considered as the clone of Bitcoin because first, it began with the Bitcoin codebase. But, later Litecoin introduced a few unique traits of its own. For example, Litecoin can be mined up to four times faster than Bitcoin. Therefore, Litecoin is a better option for smaller transactions. Moreover, Litecoin has a maximum supply cap of 84 million coins compared to Bitcoin’s 21 million coins.

Overview Of Litecoin

Market Cap$4,528,071,047
Market Rank#7
Circulating Supply63,990,197 LTC
Total Supply63,990,197 LTC
Max Supply84,000,000 LTC
All-Time High$375.29 (Dec 19, 2017)
All Time Low$1.11 (Jan 14, 2015)

What Is Ethereum?

What Is Ethereum

Ethereum was introduced by the developers to support smart contracts that enable the users to execute agreements without any mediators and more complex applications. This platform allows the users to deploy permanent and immutable decentralized applications on it. This is a very strong cryptocurrency and it is second only to Bitcoin in market capitalization. Ethereum also allows users to create and exchange NFTs, which are non-interchangeable tokens connected to real-world items and sold as unique digital property.

Vitalik Buterin is the co-founder of Ethereum and he is a Bitcoin enthusiast and Toronto programmer. According to him, Ethereum can be used as an alternative to blockchain technology. In August 2014, Ethereum ended its ICO and raised $18.4 million and by 2015, Ethereum was fully functional as a cryptocurrency. Like Litecoin, Ethereum is also faster than Bitcoin and you can mine Ethereum every 10 to 20 seconds. Another advantage of Ethereum is, it doesn’t use transaction fees.

Overview of Ethereum

Market Cap$20,533,980,530
Market Rank#2
Circulating Supply109,530,682 ETH
Total Supply109,530,682 ETH
Max SupplyNo Limit
All Time High$1,432.88 (Jan 13, 2018)
All Time Low$0.420897 (Oct 21, 2015)

Major Features of Litecoin

Litecoin is a capped cryptocurrency and its highest limit is 84 million Litecoin. Litecoin can be divided up to 8 decimal places and it works on the Lightning Network. Like Bitcoin, Litecoin is built using a Proof-Of-Work protocol. So, a group of networks of miners computes complex calculations to keep the Litecoin blockchain running. Litecoin uses a Script hashing algorithm and miners earn newly minted Litecoin for their mining works. The hashing algorithm of Litecoin prevents miners from pooling together therefore, the chance of a hostile takeover by a group of miners is less likely to happen. If you want to make a transaction using Litecoin then you have to pay a transaction fee and it is usually $0.05.

Major Features of Ethereum

One of the key features of Ethereum is it doesn’t have a capped supply limit. This cryptocurrency is designed to work as a platform for decentralized application services therefore the developer team decided not to cap the supply. Ethereum blockchain has smart contracts and they can contain information, such as sets of rules or other agreements. Moreover, the contracts can also include exchanges like property transfers or monetary exchanges. Ethereum works based on a Proof-of-Work mining system and it requires a lot less energy and fewer resources than other systems. Unlike Litecoin, Ethereum doesn’t have transaction fees, instead, Ethereum uses a different system called Gas. Here, Gas is a unit that measures the amount of computational effort required to execute transactions. So, if you want to make a transaction using Ethereum then you have to pay a Gas fee to complete the transaction.

Similarities between Litecoin and Ethereum

  • Both Litecoin and Ethereum have a faster transaction time than Bitcoin
  • Litecoin and Ethereum use the proof-of-work (POW) consensus mechanism. Ethereum uses Ethash, whereas Litecoin uses Scrypt
  • You can trade Litecoin and Ethereum on many crypto exchanges
  • Both Litecoin and Ethereum support contracts
  • Both Litecoin and Ethereum are traded on Coinbase

Differences between Litecoin and Ethereum

  • Litecoin was launched in 2011, whereas Ethereum was launched in 2015.
  • Litecoin serves as an alternative to Bitcoin and you can use it as a mode of payment or currency. On the other hand, Ethereum is considered as a smart contract platform and you can use it to develop decentralized applications (DApps).
  • Litecoin’s transaction fee is $0.05, and Ethereum’s transaction fee is $0.85.
  • If you mine Litecoin then you will be awarded 25LTCs. On the other hand, if you mine Ethereum then you will be awarded 5 units of ether.
  • It takes 2.5 minutes to mine Litecoin while for Ethereum it only takes 15 – 20 seconds.
  • Based on its capability to transfer value and store data, Ethereum is regarded for its long-term applications while Litecoin is for the short term.
  • Ethereum has the capability of crowdsourcing funds but it is not possible for Litecoin.
  • Litecoin has a cap on the number of coins but Ethereum doesn’t have any cap.

Comparative Table of Litecoin VS Ethereum

Basis for ComparisonLitecoinEthereum
Founding Year20112015
Working ProcedureLitecoin is a peer-to-peer cryptocurrency that helps transfer coins without any central authorityEthereum is created by the Ethereum blockchain platform
Transaction Fees$0.05$0.85
Block TimeBlock time is 2.5 minutesBlock time is 15 – 20 seconds
LimitLitecoin has a maximum limit of 84 million coins.Ethereum has no limit

Litecoin VS Ethereum: Which Is Better to Invest In?

So, we have looked through the key differences between Litecoin and Ethereum, now the real question is which coin is the best option for investment. In general, Litecoin looks like a better investment because it will naturally increase in value thanks to supply and demand. However, there is one risk owning Litecoin and it is the SegWit functionality. In the future, SegWit functionality might be implemented on the Bitcoin blockchain and it can impact the price of Litecoin.

On the other hand, many people have an interest in Ethereum because it is a decentralized platform and it can run different programs and apps on it. Moreover, this platform has tremendous potential for decentralized applications therefore, Ethereum has a bright feature. Another advantage of Ethereum is, it processes nearly 20 times more transactions each second than Litecoin does. Ethereum network has a unique technology to offer therefore Ethereum has a clear value for investors.

FAQs about Litecoin vs Ethereum

Should I invest in Ethereum or Litecoin?

You should invest in Ethereum because it has no limit which means no “scarcity.” On the other hand, Litecoin has a maximum limit of 84 million coins. Therefore, Ethereum is a bit smarter than Litecoin because the Ethereum platform allows Ether transactions to happen naturally.

Is buying Litecoin a good investment?

Currently, Litecoin is a good investment because it has lowered the block generation time to 2.5 minutes versus ten minutes of Bitcoin. Therefore, Litecoin has become a faster solution for transactions.

Does Litecoin have a future?

Yes, Litecoin has a future. Since its establishment, Litecoin has come a long way and it has grown from low prices around $3 to as much as $400 at its all-time high peak price. So, it’s a clear indication that Litecoin has a strong foundation.

What Drives the Price of Ethereum?

There are quite a few factors available that drive the price of Ethereum. They are – 

  • Eth 2.0 staking
  • Price of Bitcoin
  • ERC-20 tokens
  • Media coverage
  • High transaction volume, etc.

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Last Updated on November 18, 2021 by Musa D

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