How Litecoin Is Different Than Bitcoin

 

This article is provided for information and education purposes only and is not intended as investment advice. Readers are encouraged to do their own research and consult a professional before making any investment decisions.

 

 

Aside from the painstakingly obvious differentiating factors such as total supply, algorithm, and name, there are several distinctions between Litecoin and Bitcoin. Although Litecoin's leadership and community often sells itself short by dubbing Litecoin as 'the silver to Bitcoin's gold', it has several distinct advantages over Bitcoin.

1) Litecoin does not have the same level of exposure to the wider market that Bitcoin does, as Bitcoin is the primary reserve currency. In the event of a market wide selloff Bitcoin would be hammered as investors rush to cash out so they can purchase items for day to day survival. Bitcoin is still the most popular gateway into a more easily spendable fiat currency, because it offers the path of least resistance.

2) Litecoin has a leader and can therefore achieve consensus in direction much easier than Bitcoin. Any Bitcoin user can claim to be a leader, but they more often than promote their own self-interest first. Litecoin is Charlie Lee's legacy, and he is fully committed to protecting the interests of all Litecoin users. If Bitcoin is on the rocks, nobody knows if anyone will come to the rescue. On the other hand, if Litecoin is on the rocks, Charlie Lee's reputation is at stake, so you can count on him being there to fix whatever is wrong.

3) Litecoin has far more upside potential, as it's market cap is about 3% that of Bitcoin's, even though they offer comparable technology. Bitcoin has attracted more investors to date, but what many people don't consider is that only a small fraction of investors worldwide currently own cryptocurrency, and the lion’s share of investment capital is still sitting on the sidelines.

4) Since Litecoin currently has a smaller network, they can implement technological innovations on a shorter timeline. This also draws upon point #2; since Litecoin has a more cohesive sense of direction than Bitcoin, they can achieve consensus on software upgrades much quicker than Bitcoin.

5) Litecoin is an innovation built upon the pioneer work done by Bitcoin, founded with the intention of improving upon some of Bitcoin's shortcomings which hinder its wider adoption.

In conclusion, I think that the greatest disservice that Litecoin's leadership and community can do themselves is self-identify as silver to Bitcoin's gold. They are signaling that Litecoin deserves a silver medal for runner up, and that Bitcoin can never be overtaken. Litecoin is effectively throwing away a very real opportunity to become 'Facebook to Bitcoin's Myspace'.

 

Author: Brandon Williamson

Education Director for DNotes and co-founder of DNotesEDU

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