For miners, the biggest difference between bitcoin and litecoin is the way the currencies require miners to show proof of work. The bitcoin network uses SHA-256 algorithm. This algorithm is based on calculations that require a lot of parallel processing. This is the reason why ASICs technology has become so popular with bitcoin miners. Litecoin uses algorithm called the Scrypt, originally “s-scrypt.” In practical terms, SHA-256 needs equipment with a lot of raw processing power, such as fast CPUs and GPUs, and Scrypt needs large amounts of high-speed RAM.
Litecoin as silver, Bitcoin as gold
Because of all the differences described above, many users say that Litecoin to Bitcoin is what silver is to gold because it terms of standards that were used to hold value, gold and silver were considered almost identical for many centuries. Many governments all around the world treated the metals as virtually interchangeable, including the governments of the United States and most European countries.
There are more similarities between relationships of Bitcoin vs Litecoin and gold vs silver. Just like Bitcoin vs Litecoin, gold predates silver. Archeologists have discovered that gold mining goes back to around 4000BC. One of the first gold mining sites that archeologists have discovered in located in Varna, Bulgaria. In what is modern day Turkey, people began mining silver in around 3000BC.
One of the first written descriptions between gold and silver is located in the Code of Menes. Menes was a pharaoh in the ancient Egypt who lived between around 3,200BC and 3,100BC. The Code of Menes states that the value of one part of gold is equal to the value of two and a half parts of silver, which means that just like Bitcoin vs Litecoin, the value of gold has always been higher than the value of silver, even though both metals are considered to be precious and valuable.
What is of more interest to current investors and users of cryptocurrency is the timeline of gold and silver becoming actual currencies that people started to use in their daily lives for ordinary transactions. It took quite a bit of time for both gold and silver to become de-facto money. This happened about 600BC, when Lydia started creating coins out of precious metals, using them as actual storage of value. Lydia was a kingdom located on the territory of modern Turkey. According to Herodotus, Lydia was the first country to use coins made out of gold and silver. It was also the first country to have permanent retail stores.
Another factor of critical importance to modern investors is that both gold and silver have been considered to be vehicles of value storage for many centuries and continue to do so today.
Similarities between Litecoin and other cryptocurrencies
Just like most other cryptocurrencies introduced to the marketplace after Bitcoin, Litecoin fully utilizes the benefits of blockchain technology.
Litecoin is a decentralized currency and it doesn’t belong to anyone even though it does have a creator. Its creator, Charlie Lee, has announced on December 20, 2017 in a verified post on Reddit and on his twitter that he has sold all his litecoins and will not own any litecoins moving forward. He has decided to sell because he sees the Litecoin project as his child and wants to grow the network and the community, yet whenever he posts or says something about litecoin, people suspect that he has an ulterior motive for doing so. For this reason, he felt that people perceived him to have a conflict of influence when developing the network and talking about it. Selling litecoins that Lee owned made him very affluent. In his post, Lee said that moving forward he didn’t have to tie his financial success to the success of his invention.
Another similarity between Litecoin and bitcoin is that Litecoin is a fully transparent network. Anyone can check the status of the network, the number of blocks that the network currently has and all the transactions that have ever happened on the network by visiting litecoinpool.org.
Lee claims that one of the goals of Litecoin network is to take the weight off the Bitcoin network and become a way for people to conduct smaller, less significant transactions. Lee sees future in which you would use Litecoin to make purchases such as a cup of coffee and bitcoin to buy, say, a $200,000 home. He also considers Litecoin to be a testing platform for useful features that the bitcoin network could later adopt.