Bitcoin, Ethereum, Litecoin, and Many Others. Is There Really Any Difference?
Starting out as a new cryptocurrency trader or investor can become a little daunting. One common question I get asked a lot is, “what’s the next best coin or ICO to invest in?” Sorry, but this article won’t be answering that question (because there’s really no straight forward answer to that). Rather, we’ll be looking at 3 major coins – Bitcoin, Ethereum, and Litecoin, and the difference between them. This will go on to form your foundation in deciding which project to invest in.
If you are reading this article, chances are that you have heard about Bitcoin. Interestingly, very few people know that there are close to 1600 other coins, known as altcoins. Can you now see why it may be hard to decide which coin to invest in?
Bitcoin is the first and undeniably the most popular cryptocurrency. It was launched in 2009 by someone, or a group of individuals under the pseudonym “Satoshi Nakamoto”. It was originally created to be a peer-to-peer payment system. However, because if its spike in price, experts have often referred to it as a store of value (similar to gold), rather than as a medium of payment. Since the launch of Bitcoin, many other cryptocurrencies have been created, particularly in 2017.
Bonus Tip #1: There are a lot of pump and dump projects out there, so you need to be careful when investing.
Starting at $0.10 per Bitcoin, the value of the coin rose to $20,000 in December, 2017, and currently sits at close to $8000 as at the time of writing this article. Critics however fault the volatility, speed of transaction, and recent high fees of Bitcoin transactions.
Bitcoin runs on blockchain technology – a decentralized system, where every transaction is securely stored and broadcasted on the network.
Founded by Vitalik Buterin in 2015, one major novelty of Ethereum is the ease of creating and running applications on it – a decentralized platform for the creation of apps. Most new cryptocurrencies are built on the ETH blockchain. Unlike Bitcoin that is both a platform and currency, the currency of Ethereum is Ether. Another improvement to the existing blockchain is the creation of “smart contracts” which cannot be changed once uploaded on blockchain.
Smart contracts operate on “if” and “then” conditions. If a pre-determined condition is met, then the contract is executed.
Bonus Tip #2: Research the market cap, team, technology, and level of adoption before putting in money.
According to its founder, Litecoin is the silver to Bitcoin’s gold. It was born on the same open source code as Bitcoin and was aimed at smaller transactions. For example, while you could use Bitcoin to pay for a house or car, you can use Litecoin to pay for a cup of coffee. Litecoin is also faster and has lesser transaction fees than Bitcoin.
Difference at a Glance
|Founder||Satoshi Nakamoto||Vitalik Buterin||Charles Lee|
|Speed of Transaction||10 minutes||15 seconds||2.5 minutes|
|Max. No. of Token||21 million||NIL||84 million|
Bonus Tip #3: Every other coin that is not Bitcoin is generally referred to as an altcoin.
As earlier stated, there are thousands of coins, Bitcoin and altcoins. Each of these coins try to do something different. Although some may overlap in functionality, somehow, they are all different. Ripple for example targets the banking industry, Wabi, targets counterfeiting in China, Telcoin targets reaching the unbanked, and several more. We’ll be looking at some of these awesome projects as we proceed.