Throughout the history of the cryptocurrency industry, Bitcoin has remained the dominant player. Although it no longer enjoys an 80% or more share of the industry’s market capitalization as it did through the beginning of this year, it still remains the largest digital currency by share of market cap. And yet, other currencies are growing in comparison to Bitcoin, including Ethereum, Ripple, and more.
A recent profile by Invezz.com suggests Litecoin is another digital currency that investors would be wise to consider. Here are some reasons why Litecoin may prove to be a better investment than Bitcoin in the future.
Like Bitcoin, But Improved
Litecoin is often compared to Bitcoin, and for honorable reason: the two digital currencies are closely related, with Litecoin having been heavily influenced by its older peer when it was developed in 2011. Both share a deflationary nature, with the supply set to taper in the next few years.
However, there are well-known differences that separate the two. First, Litecoin has a lifetime cap of 84 million coins, which is four times higher than the total number of Bitcoins that can be mined. This means that as demand increases, there will be a larger supply of Litecoins to meet it, at least initially.
Quicker Block Generation
Another way that Litecoin may gain improved upon Bitcoin is in regard to its block generation time. Litecoin has a time of 2.5 minutes, compared with 10 minutes for Bitcoin. In practical terms, this means that transactions involving Litecoin will be confirmed four times faster than those for Bitcoin, according to Seeking Alpha’s Melwin Phillip.
Phillip believes that Litecoin could be a useful medium of exchange for small transactions in specific, as the fees will likely be considerably lower than those for Bitcoin. For investment purposes, this means that users will spend less money paying to buy or sell Litecoin than they would Bitcoin. (See also: Is the ‘Bitcoin War’ Imminent?)
Mining Is Easier
While Litecoin and Bitcoin share the proof of work concept when it comes to their mining operations, the algorithms that the two blockchain systems spend are fairly different.
Litecoin’s mining algorithms are significantly simpler than those of Bitcoin, meaning it can be mined on computers which are less powerful and that it will choose less energy. Considering that mining operations around the world choose up massive amounts of electricity and there is already a shortage of powerful graphics cards needed for mining rigs, this could prove to be a major advantage for Litecoin miners going forward.
every single of these key differences between Bitcoin and Litecoin point toward certain advantages that Litecoin might gain over its bigger peer when it comes to investments.