Litecoin and Ethereum are among the most popular cryptocurrencies today and still ranked among the 10 biggest coins by market cap. These projects are completely different from each other and have different purposes. In this article, we will cover the main characteristics of LTC and ETH, from their basic ideas to price movements and market behaviour.
The history of LTC and ETH
Litecoin is older than Ethereum. This cryptocurrency is the second largest fork off of Bitcoin, appearing in 2011. Developer Charles Lee took the open-source code of Bitcoin as his basis and created a currency unit improving some of the shortcomings present in the Satoshi Nakamoto system. Due to having some similarities with Bitcoin, Litecoin is sometimes called digital silver.
As for Ethereum, the project was submitted back in 2013, but the launch took place on July 30, 2015. The developer is Russian-speaking Vitalik Buterin who now lives in Canada. Buterin is much younger than Charles Lee, although it has not prevented him from setting a new precedent in the areas of alternative finance and decentralized payments.
The ideas behind Ethereum and Litecoin
Litecoin is mostly viewed as a currency. It was positioned as a universal currency designed for fast, safe and cheap transactions and payments. Charlie Lee – the founder of LTC – has created Litecoin as a currency for payment and a project which will improve some of Bitcoin’s problems.
Ethereum is a platform for decentralized applications. Vitalik Buterin believes that the blockchain and cryptocurrencies have more potential use cases than just being a payment system. He wants to create a global decentralized computer running on the blockchain. So, Ethereum introduced Smart-Contracts special programs which help applications to execute certain operations for a fee in ETH.
Ethereum and Litecoin main features comparison
Both cryptocurrencies can be mined but only one has a limited supply. The total emission of Litecoin is 84 mln coins and there are about 22 mln. units left to mine. Ethereum is going a different way and there’s no limit on the maximum amount of Ethereum. ETH has a limitless supply and the only factor that can affect its issuance is the inflation rate and changes in the code of the project.
Another important factor in choosing cryptocurrency is transaction speed. In this category, Litecoin is overtaking Ethereum. LTC has an average speed of 2.5 minutes and a maximum of 56 transactions per second. Ethereum is behind digital silver with an average transaction speed of 6 minutes and a maximum of 15 transactions per second.
Transaction fees and commissions
The cost of a transaction can also be an important factor in determining which cryptocurrency is a better fit for you. Litecoin was originally designed as a payment system so it was important to achieve commissions as low as possible. As a result, the LTC transaction fee is fixed at $0.04 which leaves Ethereum far behind. ETH takes a different approach using so-called “GAS” to calculate transactions each time depending on the network load.
Mining on Ethereum and Litecoin
The main mining features of Ethereum:
- High scalability, resulting in a standard transaction rate of only 15 seconds. But due to an increase in the volume and number of intra-system transfers, a drop in capacity and an increase of fees for miners. The developers intend to solve this problem in the near future by switching to the PoS standard instead of the PoW algorithm, which is widely used in most cryptocurrency systems.
- Unlimited amount of coins to mine. Ethereum has only an annual limit of 18 mln. coins.
- Another feature is the MetaMask application, whose purpose is to optimize the work with the blockchain through popular browsers.
- The default block reward is 3 coins.
Litecoin mining has the following features:
- The total number of LTC is limited to 84 million virtual coins.
- The time interval between creating blocks is 2.5 minutes.
- The mining difficulty adjustment occurs 2 times a week.
- Every 4 years the mining reward halves. Now the system gives out 12.5 coins to owners.
The price of Ethereum vs Litecoin
Let’s take a look at the price of both cryptocurrencies. They have absolutely different market behaviour and their rate is determined by various factors. Litecoin, as a hard fork off of Bitcoin, tends to shadow the price movements of BTC. If you compare the price charts of LTC and BTC you’ll see that they are almost identical.
The main reason for such similarity is that their code is very similar – that makes both coins move in the same directions. You can find more information about the Litecoin price in our LTC price prediction, where we’ve covered its price history, the main factors behind its growth rate, etc.
As for Ethereum, its price has been affected by various sentiments and events happening on the market. Listing on new exchanges, DDoS attacks on the network, etc. have dramatically affected the rate of ETH. You can find a full analysis of price fluctuations and future price predictions on our blog.
Soon, Ethereum is going to move from the PoW to PoS protocol and introduce other features designed to improve the Ethereum project. The main current problem of the platform is its lack of scalability and low transaction speed. Ethereum 2.0 is going to solve this and “will actually be the world computer”. The first improvements in the system will be the introduction of a PoS algorithm and the concept of sharding. The Proof of Stake algorithm won’t require large expenditures of computing power and electricity to work and sharding will create an enormous number of blockchains connected to one network thus improving speed and scalability.
Such changes will definitely affect the price of the second largest cryptocurrency. But it’s still a mystery how the market and the community will react to these changes. Will ETH 2.0 push the rate higher or will it be the reason for a price drop?