There are many different cryptocurrencies available today, from Bitcoin and Ethereum to Blockchain. However, one of the most popular is Litecoin, with many people mining this cryptocurrency after its 2011 launch. Indeed, many see it as the ‘silver’ to Bitcoin’s ‘gold’ and it has experienced a mining cap similar to Bitcoin in the past. But what are the actual differences between the two currencies?
One of the key areas that Litecoin differs from Bitcoin is in how it is mined. When creator Charles Lee developed this particular cryptocurrency, this is one thing he changed the most.
Aiming to improve on elements of the Bitcoin code, Lee gave Litecoin a 2.5 minute block generation time, compared to Bitcoin’s 10 minute time. This obviously gives a time-saving benefit to miners who can mine more Litecoin blocks in less time.
There is also a key difference in how the mining algorithm works between the two currencies. Litecoin uses Scrypt which is significantly altered from the SHA-256 hashing algorithm used by Bitcoin. The Scrypt algorithm contains the SHA-256 code but requires more high-speed RAM to run and is more serialised in operation. Many Litecoin mining rigs use fast graphics cards to work.
Litecoin has one big advantage over Bitcoin in that it can handle transactions far quicker. This has a number of great benefits that miners of Litecoin can experience. Firstly, thanks to the quicker block generation speed, Litecoin can simply handle more transactions than Bitcoin.
The faster block generation speed also means that the risk of double spending attacks for miners is reduced. Merchants also have to wait less time for block confirmation with Litecoin. They can confirm two blocks in five minutes while Bitcoin will take 10 minutes to confirm one.
These are the main two differences between these cryptocurrencies and give a good idea of how they both work in terms of block generation speed along with transaction speed. With the cryptocurrency world always evolving thanks to updates in the source code, it may be the case that more differences will occur in the future.