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Bitcoin Cash Versus Litecoin: Similarities And Differences

Litecoin and Bitcoin Cash are both Bitcoin spin-offs, which have emerged to solve practical issues encountered by Bitcoin, such as speed and scalability.

Both cryptocurrencies are based on open-source cryptographic protocol, as their predecessor Bitcoin. Although they have evolved in different directions over time.

In this article, we discuss about the similarities, differences and rising competition between the two popular cryptocurrencies.

A quick recap on Litecoin and Bitcoin Cash

Litecoin was released on October 2011 to offer its users a significantly shortened blockchain time and decreased transaction costs. While Litecoin is almost identical to Bitcoin from a technical standpoint, it uses a different hashing algorithm and a slightly modified GUI. The maximum number of coins is up to 84 million on Litecoins protocol, versus Bitcoins 21 million limit.

As such, Litecoins transaction time is down to 2.5 minutes from Bitcoins 10 minutes.

The transaction costs are remarkably lower as well, especially in times of solid price rallies. Bitcoins transaction costs roofed above $50 as the price of a unit approached $20000 by mid-December 2017. At the same moment, an average Litecoin transaction costed approximately $1.4. Hence, using Litecoin for everyday transactions proves to be more interesting compared to using Bitcoin, as it offers a lighter and a cheaper alternative to peer-to-peer transactions on a decentralized network

Bitcoin Cash, on the other hand, saw the daylight in August 2017 as users, investors and developers were unsatisfied with Bitcoins SegWit improvement plans to increase the capacity of the network and proposed increasing the block size to eight megabytes to upsurge the scalability of the network.

Today, the BCH network supports 32-megabyte blocks, with the perspective of further significant increases in the future. Though Bitcoin Cashs blockchain time remains similar to the Bitcoins, the transaction fees are significantly lower.

On September 1, Bitcoin Cash community conducted a stress test on BCH network to create millions of minimum fee transactions within a 24-hour period. As much as 2.1 million transactions were processed successfully on that day, with an average transaction fee eased of $0.0017 only, slightly down from $0.0020 a day earlier. The community aimed to process 5 million transactions on that particular day.

The next Bitcoin Cash hard fork is due on November this year.

Bitcoin Cash versus Litecoin

While Litecoin is focused on peer-to-peer fund transactions, Bitcoin Cash is growing its influence over a wider range of decentralized services besides fund transactions only. From e-commerce to online gaming, Bitcoin Cash could be used to purchase a widening range of services.

For example, Memo Cash, which is a decentralized Twitter-like app, runs on Bitcoin Cashs network and allows its users to share posts and interact with the rest of the network as popular social media platforms. Bitcoin Cash Football, which is a multi-player football game, is denominated in BCH.

Litecoin on the other hand has limited applications.

Lately, an important source of clash between Bitcoin Cash and Litecoin has been CoinText and Lite.IM applications, which allow users to send funds to each other via SMS, without using internet. Hence, the internet connection would no longer be a caveat in countries or places where the connection is not well established.

CoinText (service to send cash via SMS) is available in the US, Canada, Mexico, Chile, South Africa, Australia and a couple of European countries (the UK, Ireland, Belgium, Netherlands, Switzerland, Spain, Sweden, Lithuania and Finland) and allows sending and receiving Bitcoin Cash since March 2018. CoinText has recently added Litecoin and Dash, though the service is available for the US and Canadian users only.

Litecoins Lite.IM, on the other hand, can be used to send Litecoin not only via text messages but via Telegram, the worlds most trusted messaging dapp, as well. This means that although Lite.IM is more recent compared to CoinText, it is expected to benefit from an increased smartphone acceptance, which could become an important threat to Bitcoin Cashs market share on offline transactions. This is because, although the SMS applications appear to be a quick fix for countries where internet connection remains poor, it is certainly not the most exciting development regarding the future of communication.

Therefore, we continue watching Lite.IM, to see if this new dapp could give a better momentum to Litecoin which has shred more than 80% of its unit value against the US dollar since December 2017 peak.

Either way, it is important to note that both Bitcoin Cash and Litecoin are developing new technologies to spread their rule beyond borders.

Both communities have loyal supporters, yet Bitcoin Cash has a larger market cap ($7.9 billion) compared to Litecoin ($3.1 billion) and appears to be more active than its competitor in diversification and innovation.

LTC and BCH versus Bitcoin

Despite technology updates, both Litecoin and Bitcoin Cash have been losing field against the stagnant Bitcoin. In an earlier article, we have mentioned that Bitcoin is seen as the gold in the cryptocurrency space and benefits from important speculative inflows. However, if the cryptocurrency markets were to develop further, this may not be the case in the future.

Though we could say little on how long Bitcoins dominance would last, the worlds first cryptocurrency will likely hit important capacity issues in the future, if it does not set its technology up-to-date.

Therefore, we believe that alternative coins, such as Bitcoin Cash and Litecoin have potential to recover and take over Bitcoin in the long-term.

Source : https://www.insidefutures.com/article/2880035/Bitcoin Cash versus Litecoin: similarities and differences.html

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