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Over the last decade there has been an increasing amount of cryptocurrency projects, each offering their own unique advantages and disadvantages. Chances are most traders are familiar with Bitcoin and Litecoin. These 2 cryptocurrencies have separated themselves from the pack, offering great utility for investors.
Though many individuals struggle to see the benefits and drawbacks of these coins, each offers different utility for investors. Whether it be a store of value or a coin for micro-transactions, both are great options. It’s important to understand the difference between these cryptocurrencies to make educated investment decisions.
What is Bitcoin?
Bitcoin is the world's first open-source, decentralized peer-to-peer cryptocurrency. Launched in 2009 by the alias Satoshi Nakamoto, Bitcoin has pioneered the movement known as decentralized finance (DeFi). The inherent value of Bitcoin comes from many aspects –– most importantly being supply and demand –– in a similar way to gold. Without the launch of Bitcoin, there would be no market for cryptocurrency.
The total supply of Bitcoin is set at a limit of 21 million coins. Bitcoin is verified through a proof-of-work (PoW) consensus mechanism where miners allocate computing power in return for BTC rewards.
Every 4 years there is what's known as the halving, where the amount of Bitcoin given out in rewards is cut in half. This limits the rewards for miners that are verifying transactions. The total supply of BTC will be mined by the year 2140.
What is Litecoin?
Litecoin is a cryptocurrency that was designed to provide fast and low-cost payments. Released in 2011 by a former Google employee Charlie Lee, Litecoin has become one of the most used cryptocurrencies for micro-transactions.
Litecoin was created based on Bitcoin’s protocol, therefore implementing a PoW consensus mechanism. A major difference between Litecoin and Bitcoin is the faster block time of 2.5 minutes.
Along with the relatively quick transaction times, the Litecoin network has very low transaction fees, making it ideal for peer-to-peer payments. As of January 2021, Litecoin is one of the most widely accepted cryptocurrencies, with more than 2,000 merchants and stores accepting LTC.
Bitcoin vs. Litecoin Market Capitalization
The market capitalization for Bitcoin is slightly over $1 trillion. Litecoin, on the other hand, has a market cap of about $15 billion. This makes the market cap of Bitcoin roughly 67 times higher than that of Litecoin. The circulating supply for Bitcoin is currently over 18,000,000, while the circulating supply of Litecoin is roughly 70,000,000.
Use Cases of Bitcoin vs. Litecoin
The primary use case for Bitcoin would be its store of value. Bitcoin can be thought of in comparison to gold. It has a value that we as a society create. Bitcoin is widely known as the most fundamentally strong project in crypto because it stands for open-source, peer-to-peer distribution. Bitcoin can also be used for different payment methods, although the slow transaction times and fees are not ideal.
Litecoin is considered one of the most useful cryptocurrencies for micro-transactions, making it much easier for individuals to send payments. This is because the Litecoin network can confirm a block in 2.5 minutes, where Bitcoin blocks are mined about every 10 minutes. This makes Litecoin transactions 4 times faster than a Bitcoin transaction. Although these 2 coins provide different utility, they are both extremely valuable.
Where to Buy Bitcoin and Litecoin
You can buy BTC and LTC currently on an exchange like Coinbase, Webull or eToro. A centralized exchange is a great way for individuals to start buying cryptocurrency on their computer or mobile device. Make sure to do your own research on different exchanges to determine the different features offered for investors.
Which Has More Room to Grow: Bitcoin or Litecoin?
Considering the fundamentals of both cryptos, Bitcoin may have more room for growth. This is because there will never be another Bitcoin –– it is the first cryptocurrency ever created. Without Bitcoin, the blockchain industry would have little institutional adoption or mainstream appeal. Litecoin offers great utility, though there is the possibility of other projects coming along and improving block times and transaction fees even further.
Taking into account the market capitalization of both Bitcoin and Litecoin, Litecoin may have more room for growth. This is because for Bitcoin to double in price, the market cap would need to grow past $2 trillion. This is not completely unrealistic, although it may take some time. Litecoins $15 billion market cap makes it easier for the coin to double in price.
Current Cryptocurrency Prices
At the time of writing, the current market cap of all of the cryptocurrency market is roughly $2.5 trillion. As more companies begin to adopt blockchain technology, market sentiment has never been more bullish. Bitcoin price movements within the next few weeks will heavily impact the market in the short-term.
Which is Better: Bitcoin or Litecoin?
It is unclear which asset will provide a higher return rate, although when it comes to project fundamentals Bitcoin and Litecoin are both great options.
If you are looking to invest in the pinnacle of DeFi, widely considered as the industry's store of value, Bitcoin could be a great investment for you. If you wish to carry out microtransactions with a cryptocurrency, then Litecoin may be a great option for you.