Litecoin vs. Ethereum

If you’re just getting started investing in cryptocurrency, you’ve more than likely heard of Litecoin (LTC) and Ethereum (ETH), two of the biggest blockchains in terms of market cap, value and influence.

 

While often compared, these two networks differ from a technical standpoint and in their respective use cases. However, comparing Litecoin and Ethereum is a great way to learn about the subtleties of different networks when it comes to crypto assets in general.

 

Let’s take a deeper dive into what differences the two offer.

litecoin vs ethereum
litecoin

LITECOIN

Litecoin was created as a digital currency alternative to Bitcoin and seeks to serve as an alternative to traditional government currencies.

Ethereum vs Litecoin

ETHEREUM

Ethereum was built to be a kind of operating system for any number of custom assets and programs.

To further understand how these two complex networks work, read below for a side-by-side comparison of Litecoin vs Ethereum so you can start to better understand and appreciate the differences yourself.

The difference between Litecoin and Ethereum

LTC icon

Litecoin

October 7th, 2011

ETH icon

Ethereum

The Ethereum white paper was published in late 2013 and the software went live in July 2015. In 2021, the network is scheduled to complete an extensive overhaul of its software that will bring it closer to the completion of its roadmap.

LTC icon

Litecoin

Charlie Lee

ETH icon

Ethereum

Ethereum was created by 19-year-old Vitalik Buterin (with many others contributing to its code). Buterin was previously a founder at the publication Bitcoin Magazine and a 2014 Theil Fellow.

LTC icon

Litecoin

LTC

ETH icon

Ethereum

ETH (Note: ETC is an earlier version of the Ethereum software, now managed separately). 

LTC icon

Litecoin

Litecoin was created with the intention to attract merchants who were looking for a quicker way to process transactions.

 

To achieve this, Litecoin copied the Bitcoin code and modified it by reducing the amount of time it took for new blocks of transactions to be added to the blockchain.

 

As interest from merchants in cryptocurrency faded, however, Litecoin would adopt a more aggressive approach to development, pioneering new features like the Lightning Network and Segregated Witness, cutting-edge technologies now live on Bitcoin.

 

As such, the project differs from many other cryptocurrencies in that it has always been positioned as a complement to Bitcoin by serving as a sort of a testnet for new Bitcoin features.

ETH icon

Ethereum

Ethereum was created with the intention of becoming a global, open-source platform for custom assets and new kinds of economic applications.

 

Considered to be one of the most ambitious blockchain projects to date, Ethereum seeks to leverage blockchain technology to decentralize products and services in a wide range of use cases beyond money.

 

To date, Ethereum has seen a few distinct phases that have emphasized different aspects of its capabilities.

 

First, entrepreneurs flocked to Ethereum in 2017 during its famous “ICO boom”, where creators would try to raise money for new projects using new assets on the Ethereum blockchain.During this time, Ethereum was seen as something of a global capital allocator and funding mechanism.

 

A new phase of Ethereum, called decentralized finance (DeFi), has started garnering attention in 2020. This movement saw the creation of decentralized applications (dapps) intended to automate financial services like lending or borrowing without the need for a traditional bank or intermediary.

LTC icon

Litecoin

Litecoin was launched and created in 2011 and has since been closely associated with its founder, Charlie Lee, a computer scientist who previously worked for Google.

 

In an attempt to help people “own bitcoin and hold bitcoin,” Lee put development of Litecoin aside and joined a cryptocurrency exchange as Director of Engineering from 2013-2017.

 

In late 2017, Lee departed the crypto exchange to pursue Litecoin development full time. Lee now serves as the managing director of the Litecoin Foundation, a non-profit dedicated to the project.

ETH icon

Ethereum

Vitalik Buterin envisioned Ethereum as a “world computer” on which anyone could launch and run an application.

 

This idea was propelled forward by a non-profit, the Ethereum Foundation, which sold 72 million ETH, Ethereum’s cryptocurrency, in a crowdsale, to raise $18 million at the time.

 

However, what would distinguish Ethereum early on was the vibrant developer community that would soon spin up around the project.

 

Meaningful contributions to its technology would be made by developers like Gavin Wood, Jeff Wilke, Joseph Lubin and Charles Hoskinson, who all would go on to become prominent voices in the blockchain ecosystem.

LTC icon

Litecoin

Wanting to create an alternative to payment systems like Visa and PayPal, Litecoin has prioritized design choices aiming to make its transactions cheaper and faster.

 

Litecoin keeps its network secure and decentralized, while regulating the supply of new money that gets released into its economy using Proof of Work (PoW) mining where miners race to complete cryptographic puzzles to propose blocks that make up the Litecoin blockchain.

 

Litecoin differs from bitcoin in that blocks are added to its blockchain roughly every 2.5 minutes (as opposed to 10 minutes on Bitcoin).

 

Further, the mining software required can be used with computer-grade hardware .Today, it is still possible to mine LTC with hobbyist equipment, though its market is dominated by large-scale miners.

ETH icon

Ethereum

In order to create dapps, developers write programs, called smart contracts, and deploy this code to the Ethereum blockchain. These dapps are essentially large constructions of smart contracts that can be set in motion if and when specific outcomes are met.

 

Similar to Bitcoin, Ethereum employs Proof of Work (PoW) mining to power its blockchain.

 

However, the network is in the process of migrating towards Ethereum 2.0, at which time it plans to alter its consensus mechanism to an alternative called Proof of Stake (PoS).

 

Under this model, any user who owns a minimum of 32 ETH could lock those funds in a contract and earn rewards for solving computations needed to add new blocks to the blockchain. 

LTC icon

Litecoin

Litecoin’s cryptocurrency, LTC, has a limited maximum supply, meaning that according to the software’s rules there will only ever be 84 million LTC.

 

Similar to Bitcoin, 50 LTC were released when the first block was mined in 2011 and the block reward gets halved roughly every four years.

 

Through this process, more than 66 million LTC have been made available as of 2020. The last LTC is projected to be mined in 2142.

ETH icon

Ethereum

Ether (ETH) is the main cryptocurrency powering Ethereum. Similar to Bitcoin, ETH is minted in every block and distributed to its miners.

 

However, where Bitcoin has a limited supply, Ethereum does not place a limit on the amount of ETH that can be minted, and its supply is programmed to increase by 4.5% each year.

Notably, changes to the monetary policy are proposed by developers and voted on by nodes and miners running the software.

 

The Ethereum blockchain is also powered by another cryptographic function called “gas,” which is a special computational unit used for the computation fees. Of note, the more complex the computation, the more gas a given program will require.

Useful resources

If you are interested in learning more about Litecoin and Ethereum, please visit Kraken’s What is Litecoin? and What is Ethereum? pages.

 

If you want to learn more about the consensus mechanisms that power each blockchain, then the Proof of Work vs. Proof of Stake page is where you want to go!

 

Want more in depth information on specific cryptocurrencies and blockchain projects? If so, visit our Learn Center to further your education on this ever-growing space.