Litecoin and Ethereum have been at the forefront of the cryptocurrency revolution in recent years. While Ethereum has helped in the creation of a decentralization platform for hosting smart contracts, Litecoin has gone ahead of make crypto payments easier. Here are the primary differences between the two.
Litecoin began as a fork of the Bitcoin blockchain in 2011, and its founder is Charlie Lee. Its foundation is based on the codebase of Bitcoin, but it added some unique features of its own. For instance, the LTC hard cap is 84 million, and it can provide 4x faster transaction times than Bitcoin. Some people suggest that Litecoin is the silver to Bitcoin’s gold. It focuses extensively on smaller transactions and can be subdivided into eight decimal places.
Ethereum began as a project by Vitalik Buterin with significant contributions from Joseph Lubin, Dr. Gavin Wood, and Charles Hoskinson, amongst others. It brought about the second generation of blockchains that allowed for the creation of smart contracts and decentralized applications.
Smart Contracts and Mining
Litecoin network can support smart contracts, which govern the transactions in the blockchain. However, apart from integration with the Abra wallet, there are no known cases of smart contracts being utilized on the Litecoin network. It is using the Proof of Work (POW) method of mining new coins, similar to Bitcoin. In this system, miners around the world try to solve mathematical puzzles to mine a new block and gain block rewards.
Ethereum is the benchmark of smart contracts in the cryptocurrency space since it introduced them to the world. Smart contracts are programs built into the blockchain network that execute a specific set of instructions only when some pre-specified conditions are met. Smart contracts have helped Ethereum become (and remain) one of the most prominent blockchain projects to date.
Ethereum too follows the PoW mining system but will soon make a move to Proof of Stake (PoS) system where users stake some of their crypto holdings to become block validators. They can verify transactions and earn block rewards in return. This is a much more economical concept than mining.
Litecoin’s transaction times are 4x faster than Bitcoin, but it doesn’t quite match that of Ethereum. The Ethereum blockchain brings a new block into existence every 15 to 20 seconds while Litecoin takes 2.5 minutes.
The Purpose of the Two Blockchains
Whether or not Litecoin integrates the Lightening Network or smart contracts, it is designed as a payments processing system allowing users to send and receive cryptocurrency in a faster, cheaper and more efficient way.
Ethereum is designed as a distributed ledger platform that could be used to create decentralized applications and smart contracts which can use ETH as a currency to reach its end.
With Litecoin, users can send and receive LTC to share value amongst each other. With Ethereum, they can use smart contracts to share anything of value- a file, cryptocurrencies, content and other things. This suggests that while Litecoin tackles a single use case for blockchains, Ethereum and its Ethereum Virtual Machine opens a world of opportunity for the developers and users alike to use blockchain for more purposes.