Blockchain technology is altering the world, and one of its innovations is the cryptocurrency field. Some forerunners in cryptocurrencies are Ethereum, Bitcoin and Litecoin. This article will analyze the differences between Bitcoin, Litecoin and Ethereum.
Ethereum is a blockchain with a proof of work network like Bitcoin, meaning that before new coins are created a mining process has to occur. It is an open-source technology that allows its users to create dApps and deploy smart contracts in a decentralized environment, with a market cap of $377 billion. The max supply of this digital currency is 18 million Ether.
Litecoin, like its name states, offers a faster transaction speed, making it faster than Bitcoin. Transactions, here, are four times faster than what is obtainable in the Bitcoin network. The major reason Litecoin was created was to improve the transaction speed of cryptocurrencies. It has a max supply of 84 million tokens and a market capitalization of $11.634B.
This is the forerunner of cryptocurrencies, with a max supply of 21 million coins, and a market capitalization of $913.749B. Though there may be differences between Bitcoin and Ethereum, the former still bears some similarities with the latter because they both use a proof of work algorithm. It has the first-mover advantage, thereby leading the other cryptocurrencies, not minding it has issues like slow transaction speed.
Which is best Bitcoin, Ethereum, or Litecoin?
Before one could conclude on which cryptocurrency is the best amongst the aforementioned, their differences must be explained.
• Transaction speed
Transactions on Bitcoin and Ethereum have been slow, and that was why Litecoin was created. Litecoin’s fast transaction speed makes it more of a form of money to merchants that want to incorporate cryptocurrencies into their platform. The average speed in Bitcoin is nine minutes, while that of Litecoin and Ethereum are 2.5 minutes and 5 minutes respectively.
• Transaction fees
One issue that has been noticed in Ethereum is its high transaction fees (gas fees), averaging at $6, while Bitcoin has a fee of around $3. For Litecoin, the average transaction fee is $0.04.
When we consider Bitcoin vs Litecoin vs Ethereum, their algorithm is a major difference. For Bitcoin, its cryptographic algorithm is the SHA-256 algorithm, while Litecoin uses Scrypt. SHA-256 is one of the oldest algorithms in existence. As for Ethereum, it utilizes the Ethash algorithm, but this is expected to change with the introduction of Ethereum 2.0, which is a Proof of Stake blockchain.
• Maximum Supply
Every crypto analyzed in this article has a finite supply, with Ethereum, Bitcoin, and Litecoin having a maximum supply of 18 million, 21 million, and 84 million respectively.
• Market Capitalization
With the forerunner advantage and high demand to its side, Bitcoin has the highest market cap of $913 billion, while Litecoin’s market capitalization, at the time of writing this, was $11 billion. Ethereum has a market capitalization of $377 billion.
Every crypto discussed has its strengths and flaws, and the best may be chosen based on the criteria that the observer is considering.