Litecoin vs Bitcoin Cash – Which is better?

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Litecoin vs Bitcoin Cash – Which is better?

Bitcoin is considered one of the biggest innovations of the recent past. However, the rapid development also brought problems that were not expected so soon. Scalability, in particular, has become a challenge. In response, a hard fork of Bitcoin eventually created Litecoin and Bitcoin Cash.

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This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.
This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.

Litecoin (LTC) was launched in 2011, making it one of the oldest altcoins in the market. On the other hand, Bitcoin Cash (BCH) was created in 2017 from a hard form of BTC. This makes LTC and BCH the closest altcoin competitors to Bitcoin. But which one is better in Litecoin vs Bitcoin Cash?

Why the Fork from Bitcoin?

A hard fork is the construction of a new parallel universe on the Bitcoin blockchain. The primary reasons for the hard fork of BCH and LTC from Bitcoin were the highs fees and lack of scalability of the Bitcoin blockchain. This means that the resultant altcoins would have bigger block sizes resulting in lower transaction fees.

Opponents of the fork argued that lower transaction fees would discourage miners. The argument is that the fall in transaction fees has turned into a notion that miners would prefer not to find greener mining pastures. When miner numbers fall, the power of the network decreases. Fewer miners would make the network easier to attack and control. However, there will be an increase in the number of transactions with the increase in the number of users. This increased volume can mean miners make more money overall, although fees per transaction are not high.

The difference between Bitcoin Cash and Bitcoin

Bitcoin’s transaction speed is very slow, at about seven transactions per second. By comparison, Visa carries out around 24,000 transactions per second.

It was clear that Bitcoin cannot grow in the long term if the transaction rate could not be increased significantly. The Bitcoin community could not agree on how best to solve this problem. Some were in favour of increasing the block size limit to process more transactions. Opponents, however, criticized the fact that too large blocks may inadvertently cause other problems. Increased transaction flow could lead to security risks and system instability.

Since the community did not agree, the Hard Fork finally took place on August 1, 2017. This was the birth of Bitcoin Cash. The new coin uses the same code base as Bitcoin with some changes.

The new blockchain has consciously opted for the addition of “cash” when naming it. This is to emphasize the intention of the coin, which is designed for transactional purposes and avoid the pitfalls of BTC. The focus is, therefore, mainly on the transaction rate with the lowest possible fees.

The very first step to achieve this goal was to increase the block size. As already mentioned, this measure also carries risks. However, Bitcoin Cash is aware of these weaknesses and has made protection adjustments to fill these gaps and make the system safer for everyone.

Replay and Wipeout Protection

When separating from Bitcoin, all users were dealt the same amount of BCH as they owned in BTC. To prevent users from maliciously performing duplicate expenses, Bitcoin Cash uses a hash algorithm different from Bitcoin. This makes double-spending between the two chains impossible.

On-chain Scalability

Bitcoin Cash technology allows you to adjust the block size. Currently, the block size is 32 MB (according to a new hard fork from 15.5.2018), enabling a performance of about 20 million transactions per day.

New transaction Signatures

Bitcoin Cash has a different transaction signature to confirm the distinction between Bitcoin and Bitcoin Cash.

Emergency Difficulty Adjustment (EDA)

A new algorithm that ensures normal chain work when the number of miners changes drastically. This gives the currency as whole additional stability.

Scripting Commands

With OP_RETURN can be used to store additional information on the blockchain (e.g., for smart contracts). BCH allows various types of smart contracts. They also created two algorithms based on BCH to develop smart contracts. The first is CashScript, which allows functions to be written and compiled as code to add information to the block. The second is Wormhole, which allows you to create your tokens on the BCH blockchain.

The difference between Litecoin and Bitcoin

LTC is a branch of the Bitcoin core client and therefore bears many similarities to Bitcoin. However, the platform uses a different blockchain. This allows a faster transaction or transfer speed. It is considered one of the most popular altcoins on the market. This can be explained, among other things, by its performance but also by the functional proximity to Bitcoin.

Litecoin is a clone of Bitcoin. Nevertheless, there are some crucial differences. Key distinguishing features include:

Maximum Supply

Many cryptocurrencies have a limited offer. This is intended to give the currencies an intrinsic value and reduce the inflation rate. At 84 million LTC, the upper limit is four times higher than Bitcoin. In theory, this would mean that the LTC reaches about a quarter of the value of BTC. Chart analyses, however, show that the practice is quite different.

Mining Algorithm

Both cryptocurrencies are based on the proof-of-work algorithm. Bitcoin uses the SHA-256 algorithm, while Litecoin uses Scrypt. Scrypt does not allow parallelization of the calculations and is thus a more democratic variant of mining. Scrypt is less computationally intensive, but it consumes significantly more memory.

Transaction Speed

The Litecoin transaction time is approximately every 2.5 minutes. Bitcoin averages every 10 minutes. This makes it effectively about four times faster and can process more transactions accordingly.

Transaction Fees

The Scrypt algorithm significantly reduces transaction costs. The platform advertises almost free transactions.

Block Rewards

Miners are rewarded for their contribution to the network by receiving a reward for each correct calculation and attaching a new block. Miners currently get 25 LTC per block; with Bitcoin, it is 12.5 BTC. Since a new block is created on average every 2.5 minutes, statistically, more miners have the opportunity to get a reward.

Bitcoin CashLitecoin
Mining AlgorithmSHA-256 algorithmScrypt
Transaction Speed10 minutes2.5 minutes
Fees (May 2021)$0.0322$0.0712
Hashrate (May 2021)3.17EH/s347.2 TH/s

Litecoin vs Bitcoin Cash: Mining Algorithm

One of the glaring differences between LTC and BCH is the mining algorithm. BCH uses SHA-256, and LTC uses Scrypt.

What is Scrypt?

Scrypt is originally called “s-crypt” but is pronounced “script”. This algorithm uses the SHA-256 algorithm but makes the calculations more serial than the SHA-256 in Bitcoin.

In this way, it is impossible to collect mining power in pools, that is, to perform parallel processing. SHA-256 puzzles require a lot of processing power, which led to the emergence of ASIC and special “application-specific integrated circuits”. The sole purpose of these ASIC’s service was Bitcoin mining. Mining pools have a full power supply of ASIC, which is mainly designed for Bitcoin mining.

The idea was that an average user could contribute to the system as a miner with their laptop. But with as ASIC’s rise, average users have no chance of competing with large companies. Mining is also a highly wasteful process. The waste of electricity through mining is quite high.

Let’s say we have two processes, A and B. In Bitcoin mining, it will be possible for ASIC to parallel A and B simultaneously. However, in Litecoin, you need to do the A and then B process afterwards. If you try to parallelize them, too much memory is being used.

Scrypt is called a “difficult memory problem” because the main limiting factor is memory, not raw processing power. This is precisely why parallel processing has become a problem. Running fixed operations in parallel in 5 memory requires five times more memory. Now, of course, there may be devices built with tons of memory in them, but two factors mitigate this effect:

  • Normal people can compete by purchasing simple daily memory cards instead of special ASIC’s
  • Memory is more expensive than SHA-256 hash chips

Litecoin vs Bitcoin Cash: Transaction Speed

Litecoin, the lightweight version of Bitcoin, has an average trading speed of 2.5 minutes!

Although technically transactions take place instantly on both Bitcoin and Litecoin networks, it takes time for these transactions to be approved by other network participants. Litecoin was founded to prioritize transaction speed and has proven a speed advantage as its popularity keeps increasing. In principle, this difference in the approval period can make Litecoin more attractive to sellers. Enabling people to use GPUs in mining speeds up the network for everyone. Faster transactions are not Litecoin’s only good feature.

On the other hand, BCH has an average trading speed of 10 minutes. This is almost roughly the same as the processing speed in the Bitcoin blockchain.

Litecoin vs Bitcoin Cash: Hash Rate

Hash rate is the name of the mathematical processing power in all devices used in crypto mining and is also referred to as hash power. It is a measure of evaluation of mining devices, giving details about the hashrate value, strength of the devices and the speed of the mining calculations of the device.

The hash function is a type of algorithm or subprogram. Hash functions are typically used in any database to quickly find data in the table or speed up data comparison operations.

In blockchain, each trading block contains the hash expression of the last block before it. Thus, the level of security is further increased, and double submissions are prevented, and the transactions performed are processed as data on the blockchain in a very shortened and summarized way. Block summaries provided with hash are linked to the previous block, so the entire network is aware of the change, and the system extracts and ignores this process. This system is based on a highly reliable proof-of-work system and is well-documented in Bitcoin. Typically, hashrate is measured in hash per second (h/s)

Hash rate denominations are broken down as follows:

  • 1 kH/s is one thousand hashes per second
  • 1 MH/s is one million hashes per second.
  • 1 GH/s is one billion hashes per second.
  • 1 TH/s is one trillion hashes per second.
  • 1 PH/s is one quadrillion hashes per second.
  • 1 EH/s is one quintillion hashes per second.

When it comes to Litecoin vs Bitcoin Cash, the latter wins here. As of May 2021, Litecoin’s hashrate was about 347.2 TH/s.

Litecoin Hashrate

Bitcoin Cash has a hash rate of 3.17 EH/s.

Bitcoin Cash Hashrate

This means that BCH has a higher hashrate than LTC. It is, therefore, regarded to be more secure.

This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.

Litecoin vs Bitcoin Cash: Fee

As of May 2021, the average transaction fee for Litecoin is $0.0712, while that of Bitcoin Cash is $0.0322.

Litecoin vs Bitcoin Cash Chart

Litecoin vs Bitcoin Cash: Storage

For traders and investors, most of the basic elements of trading with Bitcoin and LTC are similar. Both of these cryptocurrencies can be purchased through an exchange or extracted using a mining rig. Both require a crypto wallet to be stored securely between transactions. Most crypto wallets in the market can be used to store either LTC or BCH. This ranges from hot and cold wallets to dedicated hardware wallets.

Where to Buy Litecoin & Bitcoin Cash?

As already mentioned, both BCH and LTC are among the top altcoins. That means they are readily available among the top crypto exchanges. Here are the top three crypto exchanges where you can buy both BCH and LCT.

Binance

Launched in 2017, Binance is one of the youngest crypto exchanges and also among the top three globally. It is headquartered in the European Isle of Malta and has an average 24-hour trading volume of about $67.77 billion in the spot market.

Huobi Global

Huobi Global was launched in 2013 and has its headquarters in Singapore, with satellite offices in major financial hubs globally. This exchange’s average 24-hour trading volume of about $29.357 billion in the spot market.

Coinbase

Coinbase was founded in 2012 with its headquartered in San Francisco, California. It is operational in over 100 countries worldwide and has an average 24-hour trading volume of about $11.503 billion in the spot market.

5/5

Conclusion: Litecoin vs Bitcoin Cash

As of May 2021, there are 18,735,531 BCH in circulation with a market capitalization of $24.557 billion. On the other hand, there are 66,752,415 LTC in circulation with a market capitalization of about $21.816 billion. They are ranked at position 10 and 11, respectively, in terms of market capitalization.

Bitcoin Cash - Fiat Value
This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.

From January to May 2021, BCH has gained about 307%, while LTC has gained over 152%. Remember that BCH has a significantly higher hashrate and lower transaction fee, and now, higher returns. This means that when it comes to Litecoin vs Bitcoin Cash, BCH is better. But not by much.

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