Bitcoin inventor Satoshi Nakamoto envisioned a “peer-to-peer electronic cash system” that would allow parties to transact without third parties’ involvement. This system would also solve the thorny issue of double-spending that had inhibited other digital assets from succeeding in the past. In these and many ways, Bitcoin was a revolutionary currency that would later take the finance world by storm.
However, Satoshi didn’t foresee the zealousness with which Bitcoin would be embraced. As the crypto became more popular, it became increasingly clear that its network wasn’t sufficiently scalable to meet the demand of millions of users at the same time. Also, the premise of a “cash” system that people could use on the go was clearly not viable. This meant Bitcoin couldn’t compete with existing payment systems such as PayPal and Swift whose transaction speeds can support millions of users daily.
Bitcoin has inspired thousands of cryptocurrencies (collectively known as altcoins) many of which exist to improve upon its promise. Ethereum (ETH), Dash (DASH), Ripple (XRP), Cardano (ADA), EOS, and ZCash (ZEC) are some of such altcoins. Bitcoin Cash (BCH), a fork of Bitcoin, and Litecoin (LTC), a clone of Bitcoin, have risen to be among the most successful of such currencies. Both currently sit in the top ten of the digital assets market with market capitalizations of billions of dollars.
But what differentiates them? As an investor, which crypto-asset would be a savvier choice? This piece dives deep into each currency’s world: from price to mining, to performance history.
Key Differences between Bitcoin Cash and Litecoin
One way to know which cryptocurrency to go for is to check their fundamental differences in market performance, transaction speed, average confirmation time, etc. That said, let’s take a closer look at the key differences between the two assets right now:
Current Price and Other Key Metrics
At the time of writing, LTC is currently trading at $87.99, with a market cap of $5,802,048,015 that places it at #7 in the market. It has a circulating and total supply of 65,938,864 BCH’s current price is $336.16, with a market cap of $6,246,405,244 that places it at #5 in the cryptocurrency market. The crypto has a circulating supply of 18,581,563 and a total supply of the same value, according to Coinmarketcap.
BCH’s all-time high was $4,355.62 (Dec 20, 2017), while LTC’s was $375.29 (Dec 19, 2017). This was during the crypto market’s biggest bull run when Bitcoin (BTC) had touched the highs of $20,000, it’s highest ever price to date.
Bitcoin Cash is currently trading on 1,421 markets, with BTC, USDT, and USD being its highest volume trading pairs. Litecoin’s current active market pairs are up to 2,432, with the same highest volume pairs being the same as BCH’s.
Maximum Block size
Bitcoin Cash proponents created it with almost the sole purpose of increasing Bitcoin’s maximum block size. Its block size is 8MB, with the possibility of being stretched to a maximum of 32MB. For its part, Litecoin’s inherent maximum block size is 1MB. However, this changed after the network incorporated SegWit – which made its hypothetical block size 4 MB.
Average Block Time
Block time is the amount of time a blockchain network takes to produce a new block of transactions and how long it takes for the transactions to be added to the blockchain. On average, Litecoin’s average block time is 250 seconds, while Bitcoin Cash’s is 600 seconds. As you can see, Litecoin’s hands down faster than BCH.
Bitcoin Cash uses the SHA-256 hashing algorithm, which is the same one used by Bitcoin. SHA-256 is perceived to be thorough and hence particularly good for overall network security.
By contrast, Litecoin uses the Scrypt hashing algorithm – a quicker and simpler alternative to SHA-256.
Average Transaction Fee
The average transaction fee for Bitcoin Cash is $0.005 (0.000014 BCH), while that for Litecoin transaction currently costs $0.018 (0.00019 LTC), according to Bitinfocharts. As you can see, BCH has lower fees than LTC.
Bitcoin Cash vs. Litecoin History
Bitcoin Cash was launched in 2017 as a result of a hard fork from Bitcoin. The fork was precipitated by scalability issues facing Bitcoin. Bitcoin’s maximum block size of 1MB meant only a limited number of transactions could be processed per second. As it grew more popular and more users flocked the network, the limited blocksize led to increased network congestion and high fees. This caused a fallout within the community, as one faction advocated for a hard fork while the other advocated for a SegWit upgrade.
In the end, the Bitcoin blockchain split into two: birthing the Bitcoin Cash blockchain in August 2017. The clamor for Bitcoin Cash was led by several high profile figures in the community, including early Bitcoin investor Roger Ver and Bitmain co-founder Jihan Wu. (Bitcoin Cash itself would soon be the subject of another contentious hard fork, which led to the birth of Bitcoin SV).
On the other hand, Litecoin was founded in 2012 and is the brainchild of former Google engineer Charlie Lee. Lee modeled the currency after Bitcoin, which he thought was a brilliant tech but could be improved in several aspects. Litecoin is “lite” version of Bitcoin, with more supply value, faster block confirmation time, and a different hashing protocol.
In December 2017, Charlie Lee offloaded all of his holdings in a particularly controversial move. Writing on Reddit, he revealed that he had “sold/donated” all his LTC to avoid a conflict of interest. Lee said he is sometimes accused of talking about LTC’s price for “personal benefit”.
This didn’t stop some in the community from questioning the sale’s timing – which happened near the end of the year when the market, in general, was experiencing a historic bull run. As you would expect, too, the move didn’t exactly inspire any faith in LTC holders. Imagine if Mark Zuckerberg offloaded all his shares in Facebook today. What message would that send to shareholders?
Even Bitcoin Cash came up during the fuss. Lee said he’d also been accused of promoting Bitcoin Cash, which had split from Bitcoin that August. “Some people even think I’m pumping Bcash for my personal benefit”, he said. This was after the cryptocurrency had experienced “significant volatility” after being listed on Coinbase, which led to a temporary suspension of the coin from the platform. This was suspected to be a result of insider trading.
Bitcoin Cash and Litecoin: Timeline over the Last Five Years
Litecoin had a rather grim outlook in its first three years of existence. Between 2014 and early 2017, it barely fetched anything beyond $4. However, things started looking up, and by the time the famous boom of December 2017 kicked in, Litecoin was exchanging at a whopping $298. Even though the bubble burst, Litecoin did not crash to its former gloomy days but rather maintained a (relatively) positive outlook trading between $28 – $140 in the succeeding years. In the last 5 years of its existence, Litecoin has gained almost 1000% (from 4 to an average of $40 currently).
By contrast, Bitcoin Cash was launched in August 2017, just before the crypto frenzy that December. Having begun with the not-so-modest exchange rate of $384, the coin rallied during the bubble, going on to peak at $3,257. As the markets inevitably started correcting, BCH crashed to the lows of $77 in the coming year. There have been no signs of a strong comeback since. In fact, BCH inception-to-date price history indicates that it has lost more than 10%.
Zero Confirmation Transactions
In recent months, the topic of zero-confirmation transactions has kicked into high gear. Zero confirmation transactions are transactions that have been broadcast on the network but are yet to be recorded on the blockchain.
Zero confirmation transactions involve the seller releasing a product before miners send verification that the buyer has made the payment. As such, they’re dependent – at least for the larger part – with buyers being honest. Crypto enthusiasts have warmed up to the concept since it allows day-to-day transactions to be completed faster than if transacting parties have to wait for 6 minutes or more before a transaction is etched on the blockchain.
However, the premise of zero-confirmation acceptance is not without controversy. Like we’ve noted above, the power sort of rests with the buyer – and they can decide to double-spend the coins. Due to this possibility, market participants can shy from the technology.
Still, it’s not like the cryptocurrency community did not anticipate this problem. On the forum Bitcointalk.org, Bitcoin founder Satoshi Nakamoto discussed the subject, saying it’s possible to prevent double-spending since the network nodes accept only the first version of a transaction they receive. He explained: “When you broadcast a transaction, if someone else broadcasts a double-spend at the same time, it’s a race to propagate to the most nodes first.” The first transaction, which is the most accurate, is likely to have a head start, and it will be the first to get propagated throughout the network and be received by the most nodes. Hence, any attempts at double-spending will be nullified.
Bitcoin Cash has stood out in the space for embracing zero-confirmation transactions. Already, dozens of BCH merchants are utilizing zero-confirmation transactions, including Keys4Coins, Bitpay, Bitasia Exchange, Lieferando, Mini-POS, and more. Litecoin is yet to implement this technology at the time of writing.
Bitcoin vs. Litecoin: Mining
Mining is the process by which crypto transactions are verified and added to the blockchain ledger. Blockchains and miners have a symbiotic relationship: miners validate transactions and secure the network, and the network rewards them with mining rewards and a fraction of transaction fees. Mining is one of several ways to earn from crypto passively. That said, between mining BCH and Litecoin, which one is more lucrative? Let’s look deeper into the details.
Mining Bitcoin Cash
To get started with mining Bitcoin Cash, you need the following:
- a SHA-256 ASIC miner
- 24/hour internet connection with a minimum 1MB/s speed
- a Bitcoin Cash wallet
Since it shared a blockchain with Bitcoin, Bitcoin Cash is mined the same way as Bitcoin. This is done using a SHA-256 compliant miner known as Application Specific Integrated Circuit (ASICs). This means a BCH ASIC miner can only mine BCH, just as in Bitcoin mining where an ASIC can only be used for the currency. You’ll find that mining will need a significant amount of investment. An ASIC miner will range from $1,000 (especially for older models) to over $2,000 for new models.
Another thing to consider is: Will you go solo or join a mining pool? A mining pool is a group of miners who come together to share their computing power to increase their chance of finding blocks. While you can still go solo, any rewards you get will be far and between – and it’s even highly likely you never get any! Here are Bitcoin Cash’s most popular mining pools:
Bitcoin Cash’s hash rate hugely varies. It was 1.789 EH/s at the time of writing, according to Bitinfocharts. Hash rate is a measure of a network’s processing power. The higher the hash rate, the more secure the network is from a 51% attack. Bitcoin Cash has so far managed to avoid such an attack.
If you’d like to mine Litecoin, you’ll need to invest in ASICs too. In the early days of Litecoin, anyone could mine the crypto with a CPU or GPU. But as competition has ramped up, it’s no longer profitable to mine Litecoin without specialized equipment, but as with Bitcoin Cash and Bitcoin mining. ASICs developed for Litecoin’s hashing algorithm – Scrypt, are now the standard.
Just like Bitcoin Cash, mining LTC via a pool – as opposed to going it solo – is more likely to turn a profit. Some of the most popular and legit pools include the following:
Litecoin’s average hash rate is 217.916 Thash/s at the time of writing. Just like other proof-of-work networks, Litecoin is prone to a 51% attack. However, the chances of that happening are significantly low. When Litecoin’s hash rate took a major dip (150 Thash/s) after the crypto’s halving in 2019, many community members feared this would make the network particularly susceptible to an attack. However, Litecoin.com assuaged those fears, asserting while such an attack was possible, it would have very little or no economic value.
Both Bitcoin and Litecoin’s mining rewards are halved every four years. The current block reward is 6.25 – and this will be slashed into 3.125 in 2024. By virtue of price alone, BCH is more profitable than LTC.
Where to Buy and Store Bitcoin Cash and Litecoin
Both Bitcoin Cash and Litecoin are immensely popular and can be found in practically hundreds of exchanges. You’ll find that in some exchanges, you need to trade a crypto such as ETH for the coins, while in others you can purchase them with a credit card.
Let’s start with Bitcoin Cash, which you can grab from any of these exchanges and more:
- Huobi Global
- Coinbase Pro
When it comes to storage, you have four options: mobile wallet, desktop, hardware, and paper wallet. Each one has its advantages. For instance, you want to go for a mobile wallet if you intend to use your funds for day-to-day use. But if you want watertight security, a hardware wallet is the best option out there. Hardware wallets include Coldlar, Ledger, and Trezor. Find all the options here.
What about where you can purchase Litecoin? The options are endless too. Here’s a list of just a few:
- ProBit Exchange
For storage, you have the option of either a mobile or a hardware wallet. Hardware options include Ledger, Trezor, BitBox, and KeepKey.
Both Bitcoin Cash and Litecoin are serious contenders for the title of ‘a decentralized electronic cash system’. When you look more closely, you’ll discover Bitcoin Cash has the upper hand in terms of market position, price, liquidity and even usability. Its zero-confirmation transactions feature means more merchants can adopt it as compared to Litecoin. It seems too that the Bitcoin Cash network is more resilient in terms of security. Going by price alone, BCH is more profitable than LTC for miners. Also, its edge over LTC will likely hold on in the coming year. Based on this info, we’ll leave the choice of whether to invest in one over to you.