In the crypto market, people often look at different investment opportunities outside just Bitcoin. Among these other opportunities, Ethereum’s native cryptocurrency, Ether (ETH) and Litecoin (LTC) present some of the most attractive options.
Both Ether and Litecoin are very popular altcoins with plenty of community supporters. The difference between the two is their use cases and their expectations to fulfil their respective goals.
Basically, Ethereum is a decentralized supercomputer where you can create smart contracts and decentralized applications. Meanwhile, Litecoin is the “lite” version of Bitcoin with much smaller gas fees and faster transaction speed. The two provide different use cases despite the fact that they still “compete” against each other to steal investors’ hearts. So, which one is the better option? Should I buy Ethereum or Litecoin?
Why Should I Buy Ethereum?
Let’s start with the more popular cryptocurrency, Ethereum. If you are wondering why you should buy Ethereum instead of Litecoin, it is simply because Ethereum is more advanced and has a much more active dApp community.
Ethereum allows you to create various decentralized applications or dApps through the utilization of smart contracts. This same thing is not natively possible on Litecoin. There are many powerful tokens that are built on top of the Ethereum blockchain. For example, the most popular stablecoins, USDT, PAX, TUSD, and USDC, are all operating in the form of ERC-20 – which means they are running on Ethereum.
Ethereum is also supposed to change its consensus algorithm from Proof of Work to Proof of Stake. It is believed that Ethereum will be able to become much faster once it launches various significant improvements, including its consensus algorithm changes.
There are many newer altcoin projects that try to challenge Ethereum in its quest to become the next decentralized supercomputer. EOS, Tron, NEO, and many others try to dethrone Ethereum, but so far, they have failed to do so. Until today, the biggest dApps with active users are still built and launched on top of Ethereum blockchain.
It is believed that Ethereum is still the most decentralized dApp platform and might continue to do so due to the commitments of various different dApp developers from all over the world. The influence of Vitalik Buterin, Joseph Lubin, and other Ethereum “leaders” are also helpful in keeping the community in one same vision and direction.
Why Should I Buy Litecoin?
Litecoin was created by Charlie Lee in October 2011. It was created as a “lite” and “faster” version of Bitcoin with a different mining algorithm that is called Scrypt. The aim of Litecoin is to process each block every 2.5 minutes (compared to Bitcoin’s 10 minutes processing time of each block).
As for its mining algorithm, Scrypt, basically, it is a sequential memory-hard function which requires more memory compared to a not-memory-hard algorithm.
Different from Ethereum, Litecoin is strictly used as a peer-to-peer cryptocurrency. Its sole function is to send money from point A to point B. Even Litecoin’s founder, Charlie Lee, claimed that Litecoin is like silver to Bitcoin’s gold. The two (Litecoin and Bitcoin) share many similarities.
Both of them use Proof of Work, both of them are almost always supported in the same crypto exchanges, and both of them are favored by many older cryptocurrency traders.
In the past, Litecoin was often used by crypto traders to move their money from one crypto exchange to another. For example, when a trader wants to transport his money from Binance to Bitfinex, Litecoin provides a faster speed and cheaper transaction fees compared to many other altcoins with decent liquidity.
That being said, nowadays, there are also other speedy coins with decent liquidity in various exchanges. NANO, XRP, XLM, and some other coins are arguably speedier than Litecoin. At the moment, most people trade Litecoin only for speculation purposes, and its biggest use case is to be used as a store of value.
Which One Is Better? Ethereum Or Litecoin?
So, we have learned the basic things about Ethereum and Litecoin. Which one provides a better investment opportunity?
Ethereum Advantages vs. Litecoin:
- Higher amount of trading volume: Compared to Litecoin, Ethereum has much higher trading volume on various exchanges. ETH has over $15 billion daily trading volume according to the latest stats from CoinMarketCap, while LTC only has over $4billion daily trading volume. While daily trading volume changes from time to time, Ethereum always has a bigger trading volume compared to Litecoin. Consistently.
- Various use cases instead of one-trick pony: Litecoin is one of the oldest altcoins in the crypto space. For that reason, it was not designed to have capabilities to create decentralized applications. It is only to be used as a peer-to-peer electronic cash. Just like Bitcoin and many other older gen of altcoins.
On the other hand, Ethereum is designed to cater various use cases. It can be used for DeFi (decentralized finance) protocols, other kinds of dApps, and also to be utilized for various stablecoins in the form of ERC-20. And of course, you can also use Ethereum for standard peer-to-peer electronic cash. From this standpoint alone, Ethereum wins.
- Big dreams, significant changes in the future: One thing about Ethereum is the fact that it keeps evolving, and its core developers always try to push the boundaries. It is believed that the upcoming Ethereum 2.0 would be able to transform Ethereum even more, with speedier transactions, more possibilities, and ultimately the changes to the consensus mechanism.
Meanwhile, Litecoin does not look like it will change anytime soon. It does not have any big vision to change its main architecture. Looking by both coins’ vision for the future, Ethereum looks much more promising.
Litecoin Advantage vs. Ethereum:
The only advantage of Litecoin vs. Ethereum that I could see is the fact that Litecoin blockchain does not have many issues with clogging. Ethereum is used for various transactions, most notably stablecoins that are operating in the form of ERC-20. There are times when Ethereum-based transactions get so high that you need to pay for much higher gas fees (or otherwise, your transaction wouldn’t get through).
With Litecoin, it rarely gets clogged for obvious reasons. Its biggest use case is to be used as a speculative investment vehicle by traders on centralized exchanges. Due to this reason, Litecoin almost never gets clogged in recent times. Its speed consistency is a big advantage over Ethereum when you want to transfer money from point A to point B.
To answer your question, “should I buy Ethereum or Litecoin?” it looks like Ethereum is a much wiser option due to its wider range of capabilities and future potential. Litecoin is still a huge altcoin with a large community, but it cannot do what Ethereum does. For many reasons that have been pointed above, Ethereum looks like the more obvious choice. As usual, always trade cautiously, as nobody knows the future of cryptocurrencies.