Cryptocurrency – a decentralized peer-to-peer digital currency – has been making the news for almost a decade. It has made everyday burger flippers into millionaires, and it has had many people running for their brand new local cryptocurrency ATM, or searching online for reputable exchanges in Canada. Newspapers are calling it a revolutionary change, and country leaders are scrambling to find a way to legislate or control it. Whichever way you look at it, it’s clear to see it’s making a difference in the lives of millions of people. In fact, so much so that China put a stop to its use.
Who would have thought something you couldn’t touch or see could enable you to buy a car or a luxury holiday? Over 100,000 merchants worldwide accept cryptocurrency as a legitimate payment form, and it’s only a matter of time before a “Millibitcoin” can be used to purchase your weekly groceries.
For those who are only just now beginning to learn about and understand the fantastic world of cryptocurrency, you’re probably a little confused. Of course, it can be confusing, but cryptocurrency and its many forms are exciting, weird, incredible and best of all, profitable.
However, not all have been created equally. Some are formed as platforms for applications, while others are built to act as currencies alongside our everyday cash and coins. We were excited and enthralled when the very first form of cryptocurrency, Bitcoin, hit the market, even if it were only worth 30 cents back in 2009 and didn’t seem to have any sort of substantial future in our world. The price of Bitcoin now over 12,000 Canadian Dollars, it’s clear to see it was anything but a fad, and many people are kicking themselves for not acting sooner. But, what about the others? How do they differ? What are they? Are they worth investing in?
Keep reading to learn more about Bitcoin, Ethereum, and Litecoin. Knowing the difference can ultimately help you make a better purchasing decision. The outcome being substantial financial gains.
Bitcoin was released onto the online market in 2009. It offered lower transaction fees, a decentralized authority, and to a degree, anonymity. You don’t see or touch Bitcoin; you only look at the balances associated with the public and private keys, but that doesn’t make it any less significant to our daily lives.
Bitcoin is powered by Blockchain, which is a public ledger of all Bitcoin transactions. It grows on a regular basis, with “blocks” being added to a “chain” with the more transactions that are made. It’s tamper-proof, is accessible by all investors, and has reduced risk with increased regulatory compliance. Blockchains also keep track of each individual Bitcoin to ensure no double-purchasing takes place.
Ethereum was launched six years on from the inception of Bitcoin and is now a well-established platform that runs without downtime, fraud, interference or control. There are no third-party interruptions. Unlike Bitcoin, Ethereum isn’t just a platform; it’s also a language that runs on a blockchain to enable developers to build and publish applications.
It’s easy to see why people would believe Ethereum is just another Bitcoin duplicate, but it’s not. They differ greatly. Ethereum is used for programming, whereas Bitcoin is what is known as a “stack-based language.” Ethereum transactions also take place in seconds, whereas Bitcoin takes a little longer.
Bitcoin was always going to be created as a replacement for your standard cash and coins, whereas that wasn’t what was in store for Ethereum. It was built as a platform for peer-to-peer contracts instead. However, that doesn’t mean it’s not worth investing in. Ethereum is being considered the “next best thing, ” and while Ethereum price is still affordable for the average buyer, there’s no time like the present to get your piece of the pie.
Litecoin is indeed more similar to Bitcoin than Ethereum is. It runs along the same lines, uses the same technology and experiences equal losses and gains. In effect, if the price of Bitcoin falls or rises, this is mirrored in the Litecoin market. However, it trades at less than Bitcoin, there’s more of it, and the security processes are different.
In fact, even though Bitcoin and Litecoin are very similar, they’re also very different. Bitcoin is capped at 21 million, whereas Litecoin is capped at 84 million. Litecoin is also open source, meaning anyone with knowledge of the network can modify it. It also uses a scrypt algorithm for proof-of-work hashes, whereas Bitcoin uses Hashing algorithms. This difference is quite significant. It means that Litecoin is far harder to steal or replicate, and the process to do so is more expensive than the value of the currency.
If you’re impatient, you would also be more inclined to opt for Litecoin investment. Even though the payoff, currently, is not as lucrative, the transactions can take place far quicker. You only have to wait for approximately two minutes, whereas you could be waiting 10 minutes or longer during a Bitcoin transaction. If you’re not one to sit on your hands, that would be reason enough to invest in Litecoin.
So, while all cryptocurrencies are loosely based on each other, they are all vastly different. If you’re looking at investing in cryptocurrency, take a moment to research each option to see which is more likely to benefit your life and financial situation.