Bitcoin vs. Bitcoin Cash vs. Litecoin: Which Should You Invest In?

bitcoin (btc) seems to grab all the attention when it comes to cryptocurrencies. But that fact alone is not enough to justify the investment for everyone. With the growing popularity of cryptocurrencies, there is no shortage of other options available today. And among all the exciting crypto projects on the go, certain altcoins may even prove to be better choices thanks to differences in scalability, accessibility, future growth potential, and supported features.

so which altcoins are worth looking at today? Two popular and comparable BTC alternatives include Bitcoin Cash (BCH) and Litecoin (LTC). but how exactly do these coins work? what makes them unique? And is it better to invest in bitcoin, bitcoin cash or litecoin?

Reading: Bitcoin cash vs litecoin

This article will answer these questions by taking a deeper dive into BTC, BCH and LTC. Read on to learn more about the histories of each of these coins, their attributes, and how they compare in terms of investment potential.

bitcoin vs bitcoin cash

btc cash started in August 2017 as a derivative of btc. the goal was to address some of the biggest drawbacks of btc.

the mechanics of bitcoin

Bitcoin works by processing and storing its currency on a digital ledger known as a blockchain. Using a peer-to-peer architecture, this technology is incredibly decentralized, requiring majority rule to verify transactions rather than an individual authenticator.

The result is that the currency is impervious to manipulation. there is also a maximum limit of 21 million coins on the maximum number of coins that can be mined.

However, one of the main concerns among investors is the currency’s transaction speed and, consequently, its ability to scale. Compared to the system used by credit cards, which can complete 1,700 transactions per second on average, early btc only managed to achieve a rate of just 4.6 per second.

solving the scalability problem: is it better to invest in bitcoin, bitcoin cash or litecoin?

This low number of transactions has led developers to look for alternatives to speed up transaction confirmation. for example, you can reduce the amount of data that needs verification or make the data blocks larger so that more work can be done at the same time. As a result, new technologies known as segregated witness have emerged, such as segwit3 or segwit2x.

But a new solution gaining notable traction is bitcoin cash. its developers attempted to modify bitcoin’s scalability issues but disagreed with the segregated witness design philosophy. i.e., the implementation was not transparent enough, leading to concerns about what a decentralized currency was supposed to be.

where bitcoin cash fits in

bch was created as a hard fork of btc. but unlike bitcoin, bitcoin cash is its own unique blockchain with an increased block size of 8mb (later increased to 32mb) compared to bitcoin’s only 1mb. so the bch cash network, compared to btc, can achieve:

  • higher transaction rate
  • shorter waiting times
  • less transaction fees

It is clear that scalability is the advantage of the bch network. At the same time, investors should still look to standard bitcoin in some cases. the larger block size of bch has become a point of concern regarding security. btc also remains the most popular cryptocurrency on the market, which means a higher market capitalization and greater potential for real-world usability.

It is also worth noting that bitcoin cash underwent a hard fork in November 2018, resulting in the new currency known as bitcoin sv. its design was intended to follow btc’s original intentions while addressing some of its scalability drawbacks.

Bitcoin maximalists argue that the positives of bcash are debatable, especially considering its negatives. In short, some crypto investors see BCH as a much riskier project with three times fewer transactions than the BTC blockchain. Furthermore, bitcoin does not have smart contract functionality. while the recently developed bitcoin cash sidechain is supposed to have smart contracts, to say that it does, at this point, is an exaggeration.

bitcoin vs. litecoin

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Although not as famous as bitcoin, litecoin’s market capitalization is nothing to scoff at as it remains one of the largest digital currencies in the world. When deciding between BTC and LTC, we need to compare them in context.

a google engineer named charlie lee released litecoin in 2011 and, as the name suggests, it works like a “lite” version of bitcoin. LTC is considered by many to be one of the “original” cryptocurrencies due to its longevity and staying power.

how they compare

both currencies work in a similar way; both are decentralized and both are “mined” into existence (i.e. created on a public ledger known as a blockchain). Just like bitcoin, you need a wallet to store the currency. One drawback that Litecoin inherits from Bitcoin is its immense volatility. a currency can change value drastically in a short period.

how ltc and btc differ

if you are deciding between ltc and btc, you should know the main differences between the two cryptocurrencies.

market capitalization

It should come as no surprise that btc has overtaken ltc in terms of market cap. there is simply more value in collective btc coins than in ltc.

processing speed: is it better to invest in bitcoin, bitcoin cash or litecoin?

Both currencies rely on the network to verify transactions, and in both cases, it takes time for processing to complete. litecoin was designed with this figure in mind and can increase transaction speeds sometimes up to 4 times faster than bitcoin.

max coins

Compared to bitcoin’s maximum of 21 million coins, litecoin can accommodate up to 84 million. Of course, one can split both currencies into smaller amounts for smaller purchases, so the difference is not that significant.

use of algorithms

This figure dives a bit into the technical side of coins. bitcoin uses sha-256, while litecoin uses scrypt. what does that mean for the investor? both algorithms impact how coins can be mined. sha-256 can be more complex but allows better parallel processing. At the same time, scrypt is more accessible as you don’t necessarily need custom built hardware to mine btc. it’s worth noting that this benefit may change as specialized equipment will soon be required to mine profitably.

Now, that doesn’t mean you’re stuck with only one option. You have the option to convert between Litecoin and Bitcoin if you wish, just as you would any international currency today. the volatility of the market has ensured that you will not have to wait long if you decide to change. but note that for example sending ltc to a btc address is not an option.

what’s next for btc and ltc?

many investors wonder if litecoin will finally overtake bitcoin as the leading currency. The answer is hard to pin down, considering how quickly the market changes. litecoin has some advantages like faster transaction time while bitcoin has the market share and mind right now.

bitcoin cash vs litecoin

what if your decision is between bitcoin cash (bch) and litecoin (ltc)? Both options have essential differences that significantly change their viability as an investment.

the differences between bch and ltc

The easiest metric to compare is market cap, which has ltc in the lead. but market volatility will ensure that these figures continue to change, even at the time of writing. here are some more specific differences:

  • blocks: bch supports up to 32mb block size, while ltc is still only 1mb. actual values ​​are typically a small fraction of these figures. however, litecoin is also significantly faster than bitcoin cash when it comes to block time.
  • algorithms: like bitcoin, bitcoin cash uses the sha-256 algorithm, while litecoin uses scrypt, like was mentioned above. We have discussed the differences between these algorithms and the implications for the investor earlier in this article. in general, we can consider that scrypt is simpler and faster than sha-256.
  • transaction fees: this figure can have a great impact on the usability of a cryptocurrency as a payment method. On average, we can consider bitcoin cash to have lower fees than litecoin. check back with online reference sites for exact numbers at this time.

We should also touch on some issues related to both coins, as both have interesting histories and events that led to their placement on the market today.

ups and downs

The early years were pretty rough for litecoin, with a value of just over $4. but when it started in late 2017, it enjoyed a blast to $298 until it dropped back to around $28 to $150 later.

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bch also started low at around $384 when it first launched until it hit over $3,200. it will return to its former glory in the long run.

mining methods: is it better to invest in bitcoin, bitcoin cash or litecoin?

bch and bitcoin run on the same blockchain, so you need the same starting supplies to mine bch, including a sha-256 asic miner, a bch wallet, and a sufficient internet connection. Getting expert miners can cost thousands of dollars, so it’s not exactly an accessible option for everyone, unless you’re really into the prospect. Of course, you can always join a mining pool to share computing power and increase performance.

While it is still possible to mine litecoin with any regular cpu and gpu combination, the market is changing today. Such specialized equipment will soon be required to mine profitably, much like bitcoin cash. once again, joining a mining pool can increase your chances of making a profit.

receives ROI from mining both halves of coins every four years, with the next iteration taking place in 2024. Considering the price, we can conclude that mining bitcoin cash should be more profitable than mining litecoin.

zero confirmation transactions: is it better to invest in bitcoin, bitcoin cash or litecoin?

litecoin has yet to implement zero confirmation transactions, while bitcoin cash has adopted the technology.

zero confirmation refers to transactions that occur on the network but are not yet recorded on the blockchain. merchants perform these transactions to speed up processing time, but many are concerned about the security implications.

Without verification from the rest of the network, there is a chance that coins will be double-spent. however, bitcoin founder satoshi nakamoto has countered that the risk of double spending is not as great as many believe. when a transaction and a double spend hit the network at the same time, the “winner” is the one with the most nodes propagated. since the initial transaction has a head start in that regard, there is a low risk that the double-spend will pass verification first.

final thoughts

Bitcoin has been and will continue to be the most popular cryptocurrency on the market. Like its competitors, it aims to be a decentralized monetary system where transactions are verified by the network rather than by an individual authenticator. this results in a more tamper resistant verifiable ledger of transactions.

New cryptocurrencies have emerged in response to btc, many of which aim to address its biggest drawback: its low scalability potential. bitcoin cash is a hard fork derivative that, among other things, offers a larger block size and thus better scalability, while litecoin was introduced as a “lighter” version of bitcoin as it offers faster times. faster processing times.

When it comes to making a decision, investors have many factors to work with. you should monitor each coin you are considering, the nature of the blocks, algorithms, processing times, transaction fees, market caps, and specific features supported by each coin, such as smart contracts and zero confirmation transactions. /p>

In addition to all that, the market is volatile and the numbers will continue to change on a daily basis. market research and being aware of all types of cryptocurrencies will be important tasks for investors in the future.

Looking to trade bitcoin or litecoin? Sign up for a free coinmotion account today and get instant access to the cryptocurrency markets.

bitcoin cash is available to our private banking customers through over-the-counter trading. private banking is a free service for all users who invest more than 10,000 euros in coinmotion. To learn more about what private banking can do for you, click here.

The following article does not include any investment advice. It is worth noting that investing in any digital asset includes risks, which should be carefully evaluated before making any important decisions.

The opinions presented in the article are those of the author and do not represent the opinions of coinmotion.

See also: IShares Blockchain and Tech ETF | IBLC


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