Litecoin vs Ethereum

Everyone starts receiving investment advice from a young age. Think of the proverb: don’t put all your eggs in one basket, and you’ll see where I am going with this.

As a child or young adult, the significance of this adage probably doesn’t register until you start investing.

When you step into a financial advisor’s office, they will drill you into the importance of diversifying a portfolio.

This applies to all asset classes, including stocks, cryptocurrencies, ETFs, and mutual funds.

The need to diversify a crypto portfolio is primarily driven by the fact that the industry is volatile.

Knowing which tokens to invest in and at what point is key. This Litecoin vs Ethereum review looks at two digital assets with solid prospects for your basket.

Litecoin vs Ethereum: A Side-by-Side Comparison

Crypto enthusiast or not, if you’re asked to list twenty cryptocurrencies, you are very likely to mention Ethereum or Litecoin.

Why is this? For starters, Ethereum is the second most valuable digital asset. In addition, the blockchain’s smart contract functionality is an industry crown jewel.

Litecoin is also a fan favorite. Cryptocurrency statistics show the asset has consistently ranked among the top 20 digital assets by market capitalization.

It is also instructive to note that the two have faster transaction times than Bitcoin. As a matter of fact, they were developed to be better than BTC.

But this is just the tip of the iceberg. There’s a lot more to Litecoin and Ethereum.

We’ve tabulated an overview of both platforms, which should serve as the perfect lead into a detailed look at ETH vs LTC.

From the table above, we can establish that although Litecoin is older than Ethereum, the latter is more mature.

Ethereum’s large market cap can be directly attributed to its wide adoption. Ethereum also became more sustainable than Litecoin after switching to Proof of Stake from Proof of Work in September 2021.

Our subsequent sections will take a closer look at each token before giving a verdict on Litecoin or Ethereum.

Take the ride with us.

What Is Litecoin?

Litecoin is a peer-to-peer cryptocurrency created by former Google employee Charlie Lee in 2011.

It was created from a copy of Bitcoin’s source code and, as a result, shares some similarities with the breakout blockchain. It is also one of the first altcoins (industry jargon for all other cryptocurrencies besides Bitcoin).

During its early stages, Litecoin was the second most valuable cryptocurrency. During this brief period, it became popular because its technology improved Bitcoin’s slow transaction speed.

Although it has since been pushed further down the pecking order, it has consistently ranked among the top 20 most valuable cryptocurrencies.

We must note that Litecoin is a mining-based cryptocurrency. Therefore, it uses the Proof-of-Work consensus mechanism.

PoW is a transaction validation technique that requires one party to demonstrate to all other network participants that a specified amount of computing effort has been undertaken.

As you can imagine, this validation process requires immense computational power and guzzles a lot of electricity. Both these aspects make PoW inherently unsustainable.

However, unlike Bitcoin, which uses the SHA-256 PoW hashing method, Litecoin uses the Scrypt PoW technique, which is less resource-intensive.

Litecoin Smart Contracts

Since Litecoin is a cryptocurrency, most people aren’t sure whether it has smart contract functionality.

In September 2021, Litecoin launched OmniLite, a layer 2 solution on its blockchain.

OmniLite enables developers to create and manage different digital assets on the Litecoin network. This includes smart contracts, NFTs, DAOs, stablecoins, and tokenized assets.

What is Litecoin used for?

Like Bitcoin and Ethereum, Litecoin is a form of digital money used to transfer funds between individuals and businesses.

Litecoin is also a means of payment. Merchants such as  Newegg, AMC, Twitch, and APMEX all accept Litecoin.

The token is also used to compensate the miners who validate transactions by solving complex mathematical equations.

What Is Ethereum?

Ethereum is a decentralized, open-source, and scalable blockchain that enables the creation of smart contracts and decentralized applications (dApps).

Smart contracts are computer programs stored on a blockchain that self-execute once the predetermined conditions are met.

After pioneering the smart contracts feature, Ethereum quickly became the preferred blockchain for developers and companies. This propelled it to its current status as the second most valuable cryptocurrency.

Nonetheless, Ethereum wasn’t always the second-largest blockchain in the world.

When co-founder Vitalik Buterin published the Ethereum white paper in 2013, he believed blockchain technology had much more potential than what it was being tapped for.

Bitcoin’s blockchain is close-ended and only facilitates peer-to-peer electronic payments. The white paper pitched Ethereum as an open-ended option.

His imagination was not far-fetched. The platform was an instant hit following its launch in 2015.

Notably, Ethereum uses the Proof of Stake (PoS) consensus mechanism to validate transactions. However, the community only transitioned to PoS in September 2022.

Between its launch and the migration date, Ethereum used Proof of Work just like Bitcoin.

What is Ethereum used for?

Ethereum is mostly used by developers to create decentralized apps. It is also used to pay for work done supporting the blockchain.

Participants also use Ethereum to pay for goods and services where this mode is accepted.

Similarities Between Litecoin and Ethereum

Litecoin and Ethereum share some common heritage. Both were created to solve the weaknesses that their developers saw in Bitcoin.

Consequently, the two projects have some similarities, which we outline below.

• Speed: Both have faster transaction times than Bitcoin. Litecoin’s processing speed is 54 transactions per second (TPS). At present, Ethereum can process about 20 transactions per second.
• Vision: Litecoin and Ethereum are open-source, peer-to-peer networks that subscribe to the ideology that the crypto industry should be free from third-party interference.
• Availability: Both are accessible on virtually all cryptocurrency exchanges.

Differences Between Litecoin and Ethereum

Despite their somewhat similar blueprint, Litecoin and Ethereum have some significant differences, such as:

• Design: The primary difference between the two is that Litecoin is a cryptocurrency built on blockchain technology. Ethereum, on the other hand, is a blockchain platform.
• Consensus mechanism: Ethereum uses Proof of Stake after switching from Proof of Work in September 2022. Litecoin uses Proof of Work.
• Block time: The time taken by each of these cryptocurrencies to mine a new block is different too. The average Ethereum block time is approximately 12.08 seconds. This means multiple transactions can be confirmed within one minute. Meanwhile, new blocks are generated on the Litecoin network about every 2.5 minutes, which is four times faster than Bitcoin.
• Transaction fees: The average Ethereum gas fee is higher. The rate differs from time to time. For instance, the average on November 4, 2022, was $23.53, down from $33.66 the day before. Meanwhile, the average Litecoin transaction fee is around $0.0070 per transaction.
• Supply limit: Ethereum doesn’t have a fixed supply limit. On the other hand, Litecoin’s supply is capped at 84 million tokens. This means that once the ceiling is crossed, there will be no more Litecoin.

Where to Buy Litecoin and Ethereum

The cardinal rule of a cryptocurrency portfolio is that users are prompted to chop and change from time to time depending on how the market moves. To do this, you need to work with the best cryptocurrency exchanges.

We’ve compiled a list of the best platforms that will allow you to invest in Ethereum or Litecoin, or buy other altcoins securely and at the best terms possible.

Binance

With more than 600+ coins listed and a native token that’s one of the most popular cryptocurrencies around, Binance is one of the leading exchanges. Besides offering the lowest transaction fees on the market, the platform offers advanced features such as futures and margin trading.

• Supports over 600 coins
• Binance.us for the US Users
• SEPA & Bank Transfers

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With more than 600+ coins listed and a native token that’s one of the most popular cryptocurrencies around, Binance is one of the leading exchanges. Besides offering the lowest transaction fees on the market, the platform offers advanced features such as futures and margin trading.

Kraken

Kraken is a US-based exchange that offers trading in US dollars, Canadian dollars, Australian dollars, Euros, British pounds, Swiss Francs, and the Japanese yen. The platform pays special attention to its security, with a track record of zero breaches. Kraken also has an extensive list of crypto assets and covers over 185 of them.

• Low fees
• Seven different fiat currencies
• 185+ cryptocurrencies

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Kraken is a US-based exchange that offers trading in US dollars, Canadian dollars, Australian dollars, Euros, British pounds, Swiss Francs, and the Japanese yen. The platform pays special attention to its security, with a track record of zero breaches. Kraken also has an extensive list of crypto assets and covers over 185 of them.

CEX.IO

Headquartered in London, CEX.IO is a cryptocurrency exchange popular for being one of the first platforms to make fiat-to-crypto transactions accessible through card payments and bank transfers. The platform has over four million users across the world.

• Supports a wide range of cryptocurrencies
• Licensed in the US
• Strong security measures

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Headquartered in London, CEX.IO is a cryptocurrency exchange popular for being one of the first platforms to make fiat-to-crypto transactions accessible through card payments and bank transfers. The platform has over four million users across the world.

eToro

Established in 2007, eToro is a multi-asset trading platform offering stocks, digital assets, and Exchange Traded Funds (ETFs). Its best attribute is its social trading feature which allows users to match the moves of expert traders.

• Regulated in multiple jurisdictions
• Offers a communal experience
• Plenty of educational resources

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Established in 2007, eToro is a multi-asset trading platform offering stocks, digital assets, and Exchange Traded Funds (ETFs). Its best attribute is its social trading feature which allows users to match the moves of expert traders.

Crypto.com

Crypto.com has been ranked as the most secure crypto exchange and has been awarded a AAA rating. The platform also supports 250+ cryptocurrencies and offers a high return on crypto assets. It also features some of the most advanced tools in the market.

• Competitive fees
• FDIC-insured fiat balances
• Transparency

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Crypto.com has been ranked as the most secure crypto exchange and has been awarded a AAA rating. The platform also supports 250+ cryptocurrencies and offers a high return on crypto assets. It also features some of the most advanced tools in the market.

LTC vs ETH: Final Thoughts

There are a couple of factors to consider when comparing Ethereum vs Litecoin.

First is that Litecoin’s primary use is to facilitate peer-to-peer transactions. Ethereum, on the other hand, is open-ended and well-suited to serve as a foundational layer for creating decentralized apps.

Another major aspect to consider is their price projections heading into the future. Ethereum’s price has been tipped to range between $2,400 and $5,000 in 2023. Litecoin’s price has been projected to record a minimum price of $85.86.

When you examine other differences between Ethereum and Litecoin, such as growth potential, innovation, and recent developments, you’ll conclude that both are great prospects.

The hard part is telling which one represents a better value over the long term. Keep an eye on how both projects develop.