With each passing year, people’s interest in crypto investments has been growing at an unprecedented pace. Many made millions overnight with crypto investments, but many also lost millions. Yet people are still looking for newer opportunities to invest in cryptos and amplify their returns.
Barring Bitcoin, Ethereum and Litecoin are two of the most popular choices when investing in crypto. But it also needs to be clarified whether they should choose between Litecoin or Ethereum. So let’s break down the fundamentals of these tokens and determine which makes a better investment in the coming days.
Ethereum Vs. Litecoin
Before you get into the nuances of comparing Ethereum and Litecoin, it is imperative to understand the basics of both these tokens. So let’s dive in and get a better idea of how these tokens differ.
What is Ethereum?
Ethereum is a Blockchain project launched back in 2015 with its native token called Ether or ETH. This platform came as an alternative to Bitcoin, offered more efficient transactions, and simplified the entire mining process. But more importantly, Ethereum is not a capped crypto making it very different from conventional cryptos like Bitcoin.
Ethereum also functions as a medium of exchange like Bitcoin, but the network’s primary purpose is to function as a platform for decentralized applications. The ETH token is the transaction medium that allows applications and contracts to capitalize on their offerings.
Every user on the Blockchain network can create smart contracts. Smart contracts are one of the most defining characteristics of Ethereum, setting it apart from most other tokens.
What is Litecoin?
Litecoin is another prominent cryptocurrency launched in 2011 as a fork of the Bitcoin Blockchain. As a result, Litecoin is similar to Bitcoin in more ways than expected. Many refer to Litecoin as a fairer, faster, and cheaper alternative to Bitcoin. The transaction fees on the platform are relatively lower, and you can mine blocks four times more efficiently than Bitcoin.
Litecoin is an ideal Blockchain for testing the functionalities of new cryptos since its market cap is much lower than Bitcoin. This gives Litecoin the upper hand in several ways, as it is the ideal Blockchain network to drive more innovation.
With efficient transactions in Litecoin, everyday transactions like buying a cup of coffee become much easier.
Primary Features of Ethereum
As mentioned earlier, Ethereum has no cap on its supply since the platform was designed to accelerate the growth of decentralized applications. The smart contracts on the Blockchain can store information such as agreements or rules. Besides that, these contracts also store information about exchanges such as monetary or property exchange.
Before you choose between buying Litecoin or Ethereum, it is essential to note that Ethereum recently shifted from the Proof-of-Work (PoW) system to the Proof-of-Stake (PoS) consensus mechanism. This has helped the Blockchain reduce its reliance on powerful computers that consume a lot of energy.
The Ethereum network does not charge transaction fees; instead, it charges gas fees from its users. This gas is a unit of measure for computing power required to execute transactions. So it is fair to compare this measure to the amount of gas a specific car would require for commuting from one point to the other.
Primary Features of Litecoin
Unlike Ethereum, Litecoin is a capped cryptocurrency, and there are about 84 million Litecoins currently available in the market. You can divide each Litecoin into eight decimal places. In addition, it is easier to process smaller transactions off the Blockchain since it uses the Lighting network to power these transactions.
Another important thing about Litecoin is that the Blockchain still uses the Proof-of-Work (PoW) mechanism. This increases its reliance on heavy computing power, using the Scrypt hashing algorithms. Miners will earn newly minted Litecoins for their effort on the Blockchain. Keep this information in mind if you are trying to decide between mining Litecoin or Ethereum.
Every time a buyer or seller makes a transaction on the Litecoin network, the transaction data is stored in new blocks as they are created. Miners will then get rewarded for their efforts in creating a new block for the network. Litecoin usually charges a nominal fee of about $0.05.
ETH Vs. LTC: Major Differences Between The Tokens
Before choosing Litecoin or Ethereum 2023, you must be clear about the differences between these tokens. Some of the most noteworthy differences between these tokens include the following:
- Market Stand: Currently, ETH tokens have a market value of $1,217.88 with a market cap of $149,032,974,172 and a 24-hour trading volume of $3,524,187,763. On the other hand, Litecoin has a market value of $70.26 with a market cap of $5,052,733,135 and a 24-hour trading volume of $558, 147,192.
- Supply: Ethereum has a capped supply, while Litecoin has a supply limit of 84 million LTC tokens.
- Transaction Speed: Compared to Bitcoin, Ethereum is a much faster Blockchain. Besides that, Ethereum now uses the PoS consensus mechanism, which helps increase the network’s speed. But Litecoin still relies on the conventional PoW, which has some adverse effects on its speed compared to Ethereum.
- Transaction Fees: The Litecoin network charges a transaction fee of $0.05. But Ethereum does not charge any transaction fee. Instead, it charges a gas fee based on the computing power needed to execute a transaction on the Blockchain.
- Price Predictions: Litecoin and Ethereum will likely do well in the coming years. Most Litecoin vs. Ethereum price predictions suggest that LTC might reach $184 by the end of 2025 and will reach $359 by the end of this decade. On the other hand, even ETH is expected to grow and breach the $5k mark by 2025 and grow to $49,000 by the end of 2030.
Bottom Line: Ethereum Or Litecoin?
Both the tokens have a promising future, so investing in either is a good idea. But make sure you evaluate your risk appetite before deciding since the crypto market is highly volatile. Once you have evaluated the offerings and characteristics of both these tokens, reaching a feasible conclusion will be much easier.