Litecoin vs Ethereum which among them should you hold for long? The crypto market appears to be uncertain due to the bull and bear movement. Despite the market’s volatility, cryptocurrencies continue to pique the interest of individual and institutional investors around the world.
There are presently thousands of cryptocurrencies, and more are being launched regularly, making prospective investors unsure about which cryptocurrency to invest in.
Some of the popular cryptos are Bitcoin, Ethereum, and Litecoin. While Bitcoin was the first to be created, it has some limitations. This is why tokens like Ethereum and Litecoin were created to fill the rough edges of Bitcoin.
You may be asking, what is the difference between these two tokens, and which among them will yield more profit in the future? Ensure you read this article till the end to get your questions answered.
In this article, we cover a review of Litecoin vs Ethereum, which among them is better to hold as well as the future outlook of these tokens.
What is Litecoin?
Founded in 2011 by Charlie Lee. Litecoin is a peer-to-peer crypto that allows for inexpensive global payments and efficient mining. Litecoin (LTC) was designed with technical features similar to Bitcoin.
Additionally, Litecoin uses a script-based proof-of-work system, which takes less processing power to operate. The script function uses more memory from more users, which spreads out the mining work among multiple users.
Compared to Bitcoin, Litecoin has cheaper transaction fees and takes less time to mine. Consequently, the time it takes to mine new tokens on the Litecoin blockchain is about one-fourth that of Bitcoin. Also, the entire architecture of Litecoin makes it accessible to people looking for a reliable and practical form of money.
READ ALSO: How Do You Mine Litecoin
What is Ethereum?
Ethereum was founded by Vitalik Buterin and Gavin Wood in 2015. Ethereum is a global decentralized platform based on blockchain technology. It is well-known for its native currency, Ether (ETH), which enables the efficient operation of smart contracts, a key component in the creation of decentralized apps (dApps) and decentralized finance (DeFi).
Because of its high scalability, security, and smart contracts, Ethereum stands out from other assets in the crypto world. Most developers and businesses use Ethereum to build a variety of technologies.
Furthermore, Ethereum uses a proof-of-stake mining method, which takes significantly less processing power, decreases hardware requirements, and assures more equal access to the mining process.
You can also read: How To Buy Ethereum
What are the Differences Between Litecoin and Ethereum?
While Litecoin and Ethereum are more like a high breed of Bitcoin they are still differences between these two tokens. Litecoin was initially created as a less expensive substitute for Bitcoin because it has lower transaction fees and uses less energy to mine.
While Ethereum is more concerned with smart contracts and the transfer of ownership of assets. Additionally, it uses a proof-of-stake platform rather than Litecoin’s proof-of-work system. The following are some of the distinctions between Litecoin and Ethereum.
#1. Value
One of the reasons why Litecoin is a more enticing option than Bitcoin is that it is less expensive to manage. As of November 2022, one Litecoin token is valued at around $77, which is much less than the price of Ether.
Similarly, Litecoin has a market cap of $5.54 billion, making it one of the most popular cryptocurrencies on the market. Ethereum, on the other hand, has a market cap of roughly $150 billion as of November 2022, with one token worth about $1,288.
#2. Transaction Speed
Ethereum is easier to mine and has a faster transaction speed than Litecoin. Litecoin transactions necessitate the mining of new blocks, which slows down transaction speeds (54 per second, and new blocks on the Litecoin blockchain can be created about every 2.5 minutes). Ethereum on the other hand, has a block time of 15 seconds, meaning numerous transactions can be confirmed per minute.
#3. Transaction Fees
Fee structures differ between Litecoin and Ethereum. Unlike Bitcoin, Litecoin has transaction fees, whereas Ethereum has gas fees. The gas fee represents the work required to complete a smart transaction on the Ethereum blockchain. However, the decreased price of Litecoin makes it easier for consumers to use it without incurring large costs.
#4. Proof Efforts
Litecoin’s proof-of-work method is similar to Bitcoin’s, however, it requires more memory from several users to function. The approach implies that users will still need to actively mine for the currency, but the amount of power required will be less than that of Bitcoin.
To confirm transactions and agree on the present state of the network, Ethereum’s proof-of-stake infrastructure requires a large number of miners. People will earn stakes by validating secure blocks and attesting to those that already exist. As a result, everyone has an equal opportunity to collect mining rewards under this technique.
#5. Limit
Unlike Ethereum, Litecoin has a token restriction on its network, supporting up to 84 million coins. While Ethereum has no cap on token issuance, its annual growth rate is capped at 4.5%.
READ ALSO: What Does Proof-of-Stake (PoS) Mean In Crypto?
Litecoin vs Ethereum: Which One Should You Buy?
Most cryptocurrency investors expect to see a good return on their investment. The future demand for Ethereum and Litecoin will be determined by their use case acceptance and the extent to which they provide value to investors and users.
Litecoin and Ethereum have proven to have a high return on investment throughout the years. With a market cap of $150 billion, Ethereum is far ahead of Litecoin, which has a market cap of $5.54 billion at the time of writing.
However, when it comes to prices, Ethereum is substantially more expensive than Litecoin. Hence, when it comes to making a purchasing decision, it is simple to select a coin based on specific criteria, but history has repeatedly proved that nothing in the crypto world is guaranteed.
The conclusion is that as blockchain technology becomes more widely used and people begin to use more dApps, the demand for ETH will see an uptrend. This is an indication that Ethereum has a promising future.
FAQs About Litecoin Vs Ethereum
Is it better to buy Litecoin or Ethereum?
Because of their fast transaction times, Litecoin and Ethereum are both popular. Their general functionality, however, differs.
A proof-of-stake protocol is used by Ethereum. The ETH network, on the other hand, is relatively costly to utilize. In contrast, Litecoin employs a proof-of-work mechanism and has lower transaction costs. Furthermore, Ethereum serves as a global payment platform, as well as a platform for thousands of decentralized apps. Following the recent ETH upgrade, there may be increased interest in Ethereum adoption, and the more popular Ethereum becomes, the higher the value will rise.
Why should I invest in Litecoin?
Because of its extensive track record and proven capacity to ride through periods of extreme volatility. Litecoin could be a good investment option for long-term investors, as it has always proven to bounce back after a bear market. Hence, if you enjoy taking a risk, your investment could pay off in the long run.
Should I buy Ethereum now?
If you have a short-term outlook, now might not be the greatest moment to acquire Ethereum because, overall, we believe recession risks pose a risk to ETH for 2023. Ethereum, though, might be a wise coin to retain if you’re a long-term investor. This means we anticipate prices to rise in the long run.
Conclusion
Although Litecoin and Etherium were both designed to be the high breed of Bitcoin, they function on different protocols. Litecoin uses the proof-of-work process, whereas Ethereum focuses on smart contracts and uses a proof-of-stake protocol.
Similar to Bitcoin, Ethereum is an open-ended blockchain platform where Ether is traded. It is based on numerous systematic algorithm calculations. As a cryptocurrency, Litecoin was developed to facilitate simple transactions between parties, eliminate uncertainty, and boost efficiency at a reduced cost.
With the recent Ethereum upgrade, experts suggest that it will attract more investors in the coming year. Generally, Litecoin and Ethereum both have a promising future.
However, because the cryptocurrency market is so unpredictable, anything can happen along the way. To reduce the danger of losing everything, diversify your portfolio by putting. This will make your investment safer, lower your risks, and raise your chances of receiving a higher return sooner.