Comparisons Between Litecoin And Bitcoin Cash – Which Is Better?
Litecoin (LTC) and Bitcoin Cash (BCH) are two of the more popular altcoins in the crypto space. What many don’t know, however, is that Litecoin is just as much of a bitcoin fork as Bitcoin Cash. In fact, Litecoin was the first fork, followed by BCH.
The goal of both cryptocurrencies is to improve on Bitcoin’s flaws and eventually become the world’s first successful peer to peer electronic cash system –essentially fulfilling Satoshi’s vision for bitcoin, which is currently bogged down by a few inadequacies.
When bitcoin was invented, the goal was for it to become an alternate means of exchange, eventually rendering fiat currencies mundane and taking over to become the primary means of financial exchange.
Over time, however, bitcoin’s goals have changed with more investors preferring to use it as a store of wealth or value. This is why bitcoin is now alternatively referred to as digital gold.
This perception is why a small community of the hardcore bitcoiners branched out to set up their own cryptos designed to be peer to peer cash systems that will provide the average user with financial autonomy.
Bitcoin’s Major Flaw And The Role Of LTC And BCH
Bitcoin’s initial goal was to become the world’s first decentralized electronic cash system. But its scalability and other problems led to a bunch of issues, including slower transaction times, wildly fluctuating prices and much more.
This is why Litecoin and Bitcoin Cash were created. These were designed to fix the errors that bitcoin had as well as reach the goal bitcoin can’t right now. with that solved, transactions will be executed faster, fees lower and users would be able to transact as much business as they want on the various networks smoothly and efficiently.
With Litecoin, transactions are executed faster, because of the network’s ability to process one block every 150 seconds. This is in contrast to bitcoin’s 600 seconds. It’s primarily meant to handle lots of daily small value transactions.
Bitcoin Cash, on the other hand, was designed to increase block size, thus increasing the rate at which transactions were executed and processed. Compared to bitcoin’s 2MB block size which can only handle a paltry 7 transactions per second or 420 a minute, BCH has an 8MB block size that’s capable of executing 61 transactions per second or 3660 transactions per minute.
BCH And Its Challenges
It’s obvious that these two blockchain projects have found a way to improve on bitcoin’s flaws, basically making them better alternatives for those truly interested in a decentralized peer to peer electronic payment system.
But, even these have been besieged with their own problems. A recent incident involves the split of BCH into BCH ABC and BCH SV. The latter split from the former on the basis of disagreements in the implementation of protocols that’ll move the projects closer to bitcoin’s initial goal.
More specifically, the split was based on block sizes, with the new fork, preferring a bigger block size. Basically, BCH ABC currently has a block size limit of 32 MB, while BCH SV has increased its own to 128 MB.
How BCH ABC And Litecoin Work
Understanding how both projects work is crucial to see how they function and the role(s) they could potentially play in the crypto and blockchain sector. The two tokens for instance, currently run on bitcoin’s current Proof of Work (PoW) consensus.
But that’s where their similarities end. Litecoin, for instance, is further enhanced by its SegWit protocol, a process that allows for an increase in allocated space on the block by stripping all transactions on the block of their signature data.
This way, each block has a 4X increase in storing capacity. This is how Litecoin grew its block size to 4 MB from 1 MB. While Litecoin had to work for this and be innovative with their processes, BCH ABC basically started its own process with an 8 MB block, which was then increased to 32 MB.
While these two projects are seeming improvements of bitcoin, one has enjoyed more use case and developer adoption than the other. BCH ABC has seen more apps developed on its platform than Litecoin.
Some of the apps currently deployed on the Bitcoin Cash ABC platform include Memo Cash which is a twitter like app that’s decentralized, Centbee, and Blockpress. For Litecoin, apps on the platform include CoinText, and Lite.IM, a p2p SMS based money transfer system.
Does Block Size Automatically Mean Better Performance?
The key solutions proffered by both platforms to combat the scalability and speed problem is the increase in block size. The great thing about a bigger block size is the platform’s ability to process more transactions in a very short time.
However, this also poses its own problems. This is probably why other crypto projects haven’t adopted the same approach to solving the scalability problem. Some of the problems include increased bandwidth expenses on users who would have to download huge block sizes.
While this might not be a problem for residents of developed countries, the same cannot be said for those living in third world and underdeveloped nations. These users often have to deal with limited internet access, as well as slow bandwidths and internet speeds.
People intent on mining BCH ABC, for instance, will need bigger disk drives to be able to mine the crypto successfully. As a result, fewer people would be willing or interested in mining these cryptos because of the disk requirements. The problem with fewer miners is that people who can afford it can easily band together, thus creating a centralized platform, which essentially defeats the purpose of the crypto.
As if this isn’t bad enough, estimates have shown that the BCH ABC network isn’t using as much of these blocks because the transaction volume isn’t at that level yet. While the network is quite capable of executing almost 5.8 million transactions daily, it’s currently processing only 9,000+ transactions daily.
Litecoin, on the other hand, is enjoying more patronage on its network, consistently executing over 21,000 transactions daily. This means that they are utilizing their block space more than BCH ABC is, without necessarily increasing their block size.
What Does This Mean For Transaction Speed And Volume?
It means that transaction speed for Litecoin is potentially faster than BCH ABC, with LTC processing one block every 150 seconds, while bitcoin cash only does one block every 600 seconds. Which is why Litecoin in the last one month, has processed almost $40 billion in transactions compared to BCH ABC’s about $10 billion.
Of course, this doesn’t mean that BCH ABC is all bad, seeing as it offers a cheaper transaction at a $0.0043 fee than LTC’s $0.021. Of course, it’s possible that the lower fee is a marketing ploy meant to attract more users to the BCH ABC platform, particularly after the BCH SV hard fork.
This is clearly evidenced by the fact that transactions on the Litecoin network were cheaper than on the bitcoin cash network from the point of creation to right before the fork. The reality though is that Litecoin is better for smaller transactions while BCH ABC is better for bigger ones.
How Profitable Is It to Mine Bitcoin Cash And Litecoin?
Both of these projects run on different algorithms. Bitcoin Cash runs on SHA-256, while Litecoin runs on Scrypt. This means you’ll need different mining equipment to mine both of these tokens.
BCH ABC tokens can be mined with the same mining hardware used for bitcoin, thanks to their use of similar algorithms. To mine Litecoin though, you’ll need to get a Litecoin mining hardware, specifically configured to mine the token.
It takes less time to mine a block of Litecoin (2.5 minutes) than bitcoin cash (10 minutes). This is because apart from the size of the blocks, the algorithm complexities are different, with that of BCH being more complex.
Add those two factors together, and you can see why BCH mining is a lot slower than Litecoin. However, when you compare the value of both tokens in the market, you’ll see that the BCH ABC makes up for it by commanding a higher market value.
The good thing is whatever their current market prices, they’re both considered profitable cryptos to mine.
What Does The Public Think Of Both Tokens?
Bitcoin Cash’s popularity largely stems from its brand association with pioneering crypto bitcoin. And its founders have been unabashedly promoting the token as the “true bitcoin” when in reality, they’re a fork of the real thing.
The founders have routinely referred to the original bitcoin as Bitcoin Core, yet, multiple publications have come out to debunk this falsehood. Unfortunately, naïve users often fall for this trick, thinking of it as the real bitcoin –particularly when they see it’s priced cheaper.
Litecoin, on the other hand, has built a solid reputation, thanks to a solid community and dedicated developers that have worked on the project from the beginning. They’ve never tried to pass themselves off as bitcoin, yet they’re enjoying massive adoption and experiencing steady growth.
Bitcoin Cash has always been mired in controversy –the latest of which is the Bitcoin Cash SV split. Upon a quick research of both tokens, it is immediately clear that Litecoin enjoys a more solid reputation than bitcoin cash, with the latter linked to pump and dump schemes or scams.
While both of these projects actively fight for increased market dominance, it is important for users to understand the ideology behind both of them.
Litecoin has always been original in its ideology, consistently working to improve itself, while bitcoin cash has always tried to spend Bitcoin, the premier cryptocurrency, and failing at it. Users would do well to look at their modus operandi, decide which they’re more comfortable within the long term, and go with the suitable project.
However, it’s not unusual for many investors to have both in their crypto portfolios. Anyway, with time, we’ll see the better of these two projects. Until then, they’ll need to work harder to supplant bitcoin and gain an even stronger foothold in the market and among the public.