The battle of two popular altcoins. Bitcoin Cash and Litecoin are both “attached” to Bitcoin due to how similar their mechanism is. Both of them also piggyback the popularity of Bitcoin. And don’t forget that both of them are designed to be much faster and less expensive than Bitcoin when it comes to transaction speed and costs.
Here’s the real question for you. Which one is a better investment and has a brighter future? This article presents a balanced analysis for that.
Litecoin - Summary
Litecoin is one of the oldest altcoins in history. It was first introduced to the world in 2011 by developer Charlie Lee. The idea was that Litecoin would be the “lite” version of Bitcoin with faster speed and cheaper transaction costs. It is a fork of bitcoin codebase but with much more efficient block time (2.5 minutes). Another difference is that LTC utilizes its own mining algorithm which is called Scrypt (on the other hand, Bitcoin uses SHA-256).
Litecoin has achieved something that other altcoins from its generation couldn’t. While many altcoins from the 2011-2022 era are no longer relevant in today’s era, Litecoin is still able to stay inside the top 10 crypto rankings by market cap. That fact alone is a tremendous achievement.
As of today, Litecoin is often seen as the “silver to bitcoin’s gold” - which means that if you believe Bitcoin is the digital gold, you should believe that Litecoin is the digital silver. Not everybody believes in that narrative, of course, as there are other altcoins trying to compete with LTC to attract crypto investors’ attention. There’s a good resource if you want to learn more details about Litecoin - check it out on this link.
Bitcoin Cash - Summary
Unlike Litecoin, Bitcoin Cash is actually a relatively new altcoin. It began in August 2017 as a fork of Bitcoin. Before the fork, many veteran Bitcoin supporters felt disillusioned with the slow transaction speed and high transaction fees of Bitcoin. They believe something had to be done for Bitcoin to be massively adopted.
Some of the known figures like Bitcoin.com’s Roger Ver and Bitmain’s Jihan Wu chose to support the proposal that would allow Bitcoin code to increase its upper block size limit. They were hoping that this proposal would help Bitcoin to process more transactions at a time, and thus, helping Bitcoin to be more scalable. However, the other camp of Bitcoin supporters did not agree with these changes.
After ongoing debates, the pro-changes supporters decided to fork Bitcoin and they call it Bitcoin Cash (BCH). The beginning of BCH was controversial because many of its biggest supporters (e.g. Bitcoin.com) tried to convince crypto newcomers that BCH is the actual Bitcoin.
Anyway, BCH is also seen as the speedier version of BTC. Its transaction speed is faster and the transaction cost is also cheaper. The basic mechanism of BCH, however, is very similar to BTC. If you are interested to learn more about how BCH works, you can check out this article.
Head To Head - Bitcoin Cash vs LTC
Let’s talk about statistics. When it comes to rivalry, it’s important to take a look at how many transactions they can process every second. According to multiple sources, Litecoin is able to process 56 transactions per second (TPS) on its blockchain. On the other hand, Bitcoin Cash is reportedly able to process 69670 transactions every 10 minutes - which translate to roughly 116 TPS.
Litecoin’s block time is 2.5 minutes while Bitcoin Cash’s block time is still 10 minutes. Litecoin’s block size limit is 4 MB while Bitcoin Cash’s block size limit is 32 MB.
Litecoin also has a more unique mining algorithm which is called Scrypt while BCH utilizes SHA-256, which is also being used by BTC.
And as of this post writing, BCH has a larger market cap than LTC even though LTC sometimes surpass BCH in terms of daily trading volume. In terms of accessibility, both of them are widely adopted by many crypto exchanges and wallet services.
Last but not least, both LTC and BCH also use the same deflationary model like Bitcoin, where they have mining reward halving mechanisms.
Bitcoin Cash and Litecoin present good opportunities for crypto traders and investors. They are closely comparable one to another. While BCH can theoretically process more transactions per second, LTC is still very fast and it’s still very cheap to move around your crypto money from one exchange to another. At the end of the day, it depends on your taste whether to put your money on LTC or BCH.