As the cryptocurrency craze is taking hold, savvy investors are always on the lookout for other opportunities to invest.
As the price of Bitcoin continues to climb, many are either finding it inaccessible or are concerned that its bubble will burst. Luckily, there are many other options out there and with more ICOs announced every day, investors have their pick of possible new paydays.
There are, however, two well-established cryptocurrencies that are worth your attention and these are Litecoin and Ethereum.
Enjoying a position amongst the world’s most famous crypto-coins, they both offer superb opportunities for investment, trading and mining.
But when it comes to Litecoin vs Ethereum, which is the best? What are the differences between them? And which one should you choose to include in your cryptocurrency portfolio?
Let us read on to find out more!
What Is Litecoin?
Litecoin is a cryptocurrency which is loosely based on the concept of Bitcoin.
To date, it is not as valuable as Bitcoin, but its popularity is undoubtedly on an upwards trajectory. In 2017 alone, its value against the dollar shot up 7291% compared to Bitcoins 1731%. If it keeps going at the rate it is going; it is set to be one of the best investments in the cryptocurrency market.
Litecoin was created by an ex-Google employee called Charlie Lee who had the idea to create a lighter, and quicker version of Bitcoin. Litecoin was then launched in 2011 via an open-source client on GitHub.
It is mostly a fork on the Bitcoin Core Client, and Litecoin is often referred to as the “silver” to Bitcoins “gold”. Many say that Bitcoin is excellent for long-term holding and investing, whereas if you want to make lots of small transactions, Litecoin should be your crypto of choice.
What Is Ethereum?
Ethereum is a little more technical in the way that it works.
While Litecoin works on the blockchain- an open source, a decentralised ledger of transactions, Ethereum utilises it differently. The simplest way of explaining Ethereum is that it is an open source software platform which uses blockchain technology to build and then roll out decentralised applications across the network.
Like Bitcoin, Ethereum is considered as a distributed public blockchain network. However, there are some significant differences between the two, the most important of which is that Ethereum has significantly different purposes and capabilities.
Rather than focusing on who owns what coin, and what transactions have been made, Ethereum concentrates on the running of a code related to a decentralised application. Ethereum is generated or mined by users working to earn them, rather than solving algorithms in the case of Bitcoin.
Ethereum is so much more than just a currency; it is an application development platform which provides endless possibilities for its users, including smart contracts. This is one of its biggest draws as its infrastructure reassures investors in its longevity.
Litecoin vs Ethereum: The Difference
The main difference between the two coins is the fact that Litecoin is transactional, whereas Ethereum has other uses.
In other words, Litecoin is strictly a currency that can be exchanged for goods and services, or traded with fiat currencies or other coins.
Ethereum also works in the same way as a cryptocurrency, but it also offers a network which is capable of providing crowdsourcing for other projects. Its infrastructure works by decentralising the management structure and by including something called a “smart contract” which is another word for a piece of software that runs the organisation.
Once a funding period can be created for a new organisation, and once the target has been met, further steps can be created, and proposals made. These are then voted on, and the number of votes which are allotted to each person is then linked to the number of coins which are contributed. The more coins that are given during funding, the more significant the number of votes that are offered.
When it comes to the cost of transactions, there are differences yet again.
In regards to Litecoin, the value of a transaction is pretty stable at around $0.04 per transaction. Ethereum, on the other hand, takes a slightly different approach to the matter and each transaction cost is calculated base on the complexity of the transaction, as well as the amount of bandwidth needed, and any applicable storage needs.
Litecoin is attractive to many investors because it has significantly more coins available to be mined than Ethereum.
There are a total of 84 million crypto tokens available to be mined which far exceeds other coins on the market. This is driving up interest in the currency and also suggests more longevity as well, which means the value of each coin could far surpass that of its competitors.
Ethereum and Litecoin are essentially like apples and oranges – both are edible fruits, but that is where the similarity ends.
Litecoin is perfect for those who want a replacement for fiat currency, whereas Ethereum is for those that are interested in the other functions that it possesses that far surpass the exchange of goods and services for coins.
Litecoin vs Ethereum: Difference In Mining
If you want to “mine” Ethereum, you are going to need to get yourself what is known as an AWS EC2. Of course, if you’re going to do it the easy way, you can just purchase it through an exchange such as Binance or Coinbase, but if you want to do things correctly, be prepared to put a bit more work in.
As Ethereum has become more and more popular and more miners are joining the network, it means that it is becoming harder to solve the problems.
This has resulted in a situation where mining Ethereum is a little bit costly– unless you are intending on mining a considerable amount of coins, it probably won’t be worth it as the returns are low and the equipment you need to do so, is somewhat pricey.
That said, as the price of Ethereum continues to rise, it will reach a point where it is worth your while.
If you are still set on mining, you need to get yourself an AWS, and EC2 Console, and Ethereum wallet. Then you need to join a mining pool. Joining a mining pool means that you can efficiently pool your resources and mining efforts with other users and the divide up the rewards.
This makes mining much easier, quicker, and cheaper than if you were doing it on your own.
When it comes to mining Ethereum, it is an expensive process. An hour of mining costs about $2.60 in expenses, whereas the gains for a day would be the same as the hourly rate.
Of course, we don’t know what will happen in the future, and as the cost rises, we will expect to see that the cost of mining becomes more tenable. If you want to get your hands on some Ethereum, the best way to do so is through a cryptocurrency exchange.
When it comes to mining Litecoin, it is a little more straightforward and cheaper, although it is still not for the fainthearted. You can mine Litecoin with a home computer, although getting some fancy equipment will increase your productivity. The good news is that it is easy to set up a mining operation and you will start to see the profits coming in pretty quickly.
First up you need to get your hands on a computer that will be specifically dedicated to mining. In crypto circles, this is known as “rig”. For it to be effective, you need a computer that has at least two graphics cards that need to be linked together in a custom setup.
You can purchase the equipment that you need online, or you can attempt to build your own, depending on how technologically minded and skilled you are.
You also need to consider that you will need system RAM equal to the graphics card RAM and you will need a specific cooling device for your mining machine, to ensure that it doesn’t burn out in a short space of time.
You could also consider using an ASIC Scrypt miner who is a specialist device that can significantly increase your mining capabilities, but remember that these can be quite pricey. You can get lower power versions which will allow you to save on electricity and operating costs.
If you decide to go for a Scrypt miner, you can also use it for other Scrypt based coins apart from Litecoin, meaning it is essentially multi-purpose.
You will also need to get a Litecoin wallet to store your haul in and consider joining a mining pool to increase your productivity through sharing the effort with other miners.
Remember, when you are mining either Litecoin or Ethereum that it is wise to keep checking your productivity and profitability. Be sure to monitor your electricity bills and the costs of replacing equipment as these can add up rather quickly. The moment that the exercise of mining starts costing you money with no return is the moment that you need to switch to buying and trading instead.
Litecoin vs Ethereum: Which One Is Better To Invest
There is a lot of debate around which coin is the best one to invest in and a lot comes down to personal preference.
Many people believe that Litecoin will one day replace Bitcoin, once its bubble bursts. Due to the fact it is significantly cheaper to make a transaction, and it takes a lot less time, it takes out a lot of the criticism that has surrounded Bitcoin.
Also, for now, the price is still at a level which is accessible to most and will, with any luck, offer a sound return on investment.
When it comes to Ethereum, one of the most significant selling points is that it is not just a cryptocurrency. It is considered as more stable than something that is just a currency because it has features and properties that far extend beyond monetary value.
Because it is used to develop and roll out applications via developers, it makes it more secure and less likely to disappear into thin air in a matter of months.
If you are looking to just invest in, or trade in small amounts then Litecoin is probably your best bet. If you want a cryptocurrency to use as a currency, then it is the best option due to its fast and low-cost transaction capabilities.
If you are looking to invest heavily in a coin and to keep it for a long time without enacting many transactions, then Ethereum is worth your attention. Also, if you are a developer or are interested in exploring the application based functions of it, then Ethereum is the one for you.
It comes down to personal preference, and to be honest, I cannot see either coin disappearing anytime soon, and both are on an upward trajectory regarding value. Instead of choosing between Litecoin vs Ethereum, you could decide to invest a bit in each of them and create a diverse portfolio.
Either way, both Ethereum and Litecoin are looking like equally sound investments, and if you have the assets and ability to invest in both, I would suggest you give it some serious consideration.
Remember that mining is probably not going to be particularly financially lucrative for you, so the best thing to do is fine a fiat-crypto or a crypto-crypto exchange where you can purchase your coins at market value, without having to pay expensive electricity or hardware costs.