Litecoin vs Ethereum
Litecoin was forked from Bitcoin, the cryptocurrency that started it all. It was designed as a kind of digital cash, and Litecoin came along a couple of years later as a lighter version (hence the name) in the sense that it would handle transactions more quickly and charge you less for the privilege.
In comparison, Ethereum looks totally different. It can be used to make payments but that wasn’t necessarily the intention when it was proposed. Ethereum began what’s known as the “Blockchain 2.0” era, where blockchain technology wouldn’t just be used for payments but could be leveraged to handle other tasks too.
Ethereum’s particular use is for creating smart contracts. These are contracts that execute themselves and are built from code. Its blockchain can be used to develop decentralized applications or Dapps which can run without the need for any intermediaries.
It’s worth mentioning this right at the start so you keep in mind that with Ethereum vs Litecoin you’re comparing apples and oranges. They were built to do entirely different things. One thing that they have in common though is the fact that they both inspired many of the thousands of crypto assets in existence today. Litecoin was one of the earliest altcoins (alternatives to bitcoin) and Ethereum made smart contract platforms popular.
Ethereum vs Litecoin Mining
One point where Litecoin and Ethereum converge is with mining. This is the process that some crypto networks use to validate transactions and add them to their distributed ledger network.
Litecoin mining uses a Proof-of-Work (PoW) system. Individuals or groups known as miners use mining devices, which could be specialized machines or normal consumer computers, to solve complicated cryptographic problems. The first miner to solve the problem gets to add groups of transactions, known as blocks to the blockchain, the public ledger. This is going on all the time and so the ledger containing all transactions is constantly growing.
Miners are rewarded for their time and effort with a proportion of the newly minted cryptocurrency. Litecoin’s coin is identified by the initials LTC. Ethereum makes use of PoW for transaction validation too, but when Ethereum 2.0 launches that is set to change when it moves to a new model known as Proof of Stake (PoS).
This method uses validators instead of miners, who stake a proportion of their coins in return for allowing them to validate new blocks and receive payments in crypto. In effect, this is a kind of betting. When they find a new block with transactions, they are wagering on it being added to the blockchain. If it does get added then the validators who wagered on that block are given block rewards proportional to what they bet. Cheating the system by wagering on lots of blocks or on fraudulent blocks is punished by removal of their ETH.
One advantage of PoS is that it’s environmentally friendly because it doesn’t use as much energy as the notoriously power-hungry PoW. Bitcoin is an energy vampire. It may consume fewer resources than all the banks in the world, but it still gobbles up more power than some countries.
But although PoS means that ETH gobbles up less energy, it still hasn’t been proven on a large-scale. Despite its shortcomings, PoW has kept the likes of the Bitcoin and Litecoin networks safe from major problems and intrusions, and we haven’t even mentioned the fact that PoS could lead to ETH becoming heavily centralized.
PoW miners can’t escape the need to sell mining rewards to pay for their electricity and other running costs. Not so with PoS, which isn’t so resource-hungry, so validators are free to keep staking ETH and earning block rewards. This may lead to large-scale centralization in the future, particularly when you think about the fact that some ETH holders are already sitting on large amounts.
Litecoin vs Ethereum: Fees
In the case of Ethereum vs Litecoin transaction fees, Litecoin surges ahead here. Even after Ethereum gained popularity in 2017 from the ICO boom, Litecoin’s average transaction fees have been consistently more modest than Ethereum’s.
Litecoin vs Ethereum Speed
Litecoin may win with cheaper transaction fees but Ethereum can get those transactions through much faster with an impressive average block time of 15 seconds. Litecoin takes 2½ minutes, which seems like a small eternity in comparison.
Litecoin vs Ethereum: Hash Rate
Something known as a 51% attack is the main worry for Proof-of-Work networks. If an individual miner or a group of them collaborate and account for more than 50% of the network’s hash rate, or mining power, then they have control. They could stop new transaction validations or even reverse them, which would let them spend the same coins twice.
A crypto network needs to have a high total hash rate to guard against the possibility of one of these 51% attacks. This is because when there are more individuals involved it’s more difficult (you would need to spend a lot more on mining equipment) to provide a significant percentage of the power.
Ethereum and Litecoin have bested each other’s hash rates in the past, they are generally similar these days which means that 51% attack is about the same odds of happening on either of them.
Ethereum vs Litecoin: Who Wins?
We can’t call a winner in the Litecoin vs Ethereum battle because each of them fulfils a different role.
Litecoin has proved its resilience. LTC is still standing after all these years when many of the names that arose at the same time have disappeared.
Ethereum has proved itself with greater functionality and potential uses. It represents an evolution in the use of blockchain, stepping beyond the original vision of replacing currencies to solve the problem of protecting contract integrity in a novel way. It could end up as a decentralized hyper computer that offers developers of the future the flexibility to create a new generation of decentralized software.
So, Litecoin is a respected mining solution, Ethereum may end up with lower transaction fees if it moves to PoS and will win on transaction speed, but there is plenty of room for both to excel at what they do in years to come.