Bitcoin and Litecoin Compared: A Simple Guide

What is Bitcoin (BTC)

Bitcoin is the first-ever cryptocurrency. It launched in 2009, right after the global financial crisis.

A person or group calling themselves Satoshi Nakamoto created it. Nobody knows who they really are. But they left behind a message: we need a new kind of money—one that doesn’t rely on banks.

Bitcoin was designed for peer-to-peer payments. Just you and the other person. No middlemen. No banks. No governments involved.

People often call it digital gold. Like gold, there’s a limited amount—only 21 million bitcoins will ever exist. Because of that, a lot of people use it as a way to store value. Not to spend, but to hold and hope it goes up over time.

What is Litecoin (LTC)

Litecoin launched in 2011. It was created by Charlie Lee, a former Google engineer.

He took Bitcoin’s code and made it faster and lighter. The idea was to build something people could actually use every day. Not just keep in a wallet and forget about.

Litecoin’s main focus is speed and low fees. It’s meant to work more like digital cash. Quick payments. Cheap transactions. Send money to friends. Pay for stuff online.

People often call it the silver to Bitcoin’s gold. It’s not as rare or valuable, but it’s practical and easy to use.

LTC vs BTC: The Main Differences You Must Learn

Bitcoin and Litecoin aren’t the same. Sure, they both use blockchain and let you send money without banks. But when you look closer, they work pretty differently. Litecoin is faster. It’s cheaper to use. And it feels more like digital cash.

Bitcoin is slower, more secure, and people treat it like digital gold.

They use different mining methods. They have different speeds, costs, and purposes.

So yeah, same idea—but not the same coin. Let’s break it all down.

Consensus Mechanisms

How do they know which transactions are real? That’s where consensus mechanisms come in.

Both use something called Proof of Work (PoW). It’s a system where computers compete to solve complex puzzles. The first one to solve it gets to add the next block to the blockchain and earn some coins. This is called mining.

But there’s a key difference in how they do it.

Bitcoin uses an algorithm called SHA-256. It’s very secure but needs a lot of power. To mine Bitcoin, you need high-end machines that use tons of electricity.

Litecoin uses Scrypt instead. It’s still Proof of Work, but it’s easier on hardware. You don’t need huge, expensive machines to get started—though many miners now use advanced gear for it anyway.

Block Generation Time

This part’s about how fast each network adds new blocks.

Bitcoin creates a block about every 10 minutes. That means you usually wait around that long for your transaction to be confirmed.

Litecoin is quicker. It adds a block every 2.5 minutes. So, it’s about four times faster than Bitcoin.

This speed helps when you’re using Litecoin for everyday payments. Transactions get confirmed faster, which makes it more practical for regular use.

Total Supply

One key difference between Bitcoin and Litecoin is how many coins they can have.

Bitcoin has a fixed supply of 21 million. That’s the limit. Once all 21 million are mined, that’s it—no more will ever be made.

Litecoin has a bigger cap. It’s limited to 84 million coins. That’s four times more than Bitcoin.

Why does this matter? It’s about scarcity. Bitcoin is more limited, which is why people compare it to gold. It’s rare and valuable.

Litecoin has more supply, which makes sense for daily use. It was built for spending, not just holding. That’s one reason why some people choose to buy LTC with a credit or debit card for quick and easy access.

Transaction Speed

Litecoin is faster than Bitcoin. That’s one of its biggest strengths.

Bitcoin adds a new block every 10 minutes. So when you send a transaction, you usually wait around that long for confirmation.

Litecoin is quicker. It creates a block every 2.5 minutes. That means your payment gets confirmed much faster.

This speed makes Litecoin more practical for everyday stuff. Like buying something online. Or sending money to a friend without waiting ages.

Bitcoin still works. It’s just slower. That’s why people often use it more for holding, not spending.

Transaction Fees

Fees change depending on how busy the network is. But overall, Bitcoin costs more to use.

When lots of people are sending transactions, Bitcoin fees go up. During busy times, you might pay a few pounds just to send one transaction.

Litecoin fees are much lower. Sometimes it only costs a few pennies. That’s why it’s a better choice for small or frequent payments.

If you’re just sending a little bit of crypto, Litecoin is usually the cheaper option.

Scalability

Bitcoin has struggled with this a bit. When the network gets busy, things slow down. You wait longer for your payment to go through. And fees go up. That’s been a problem during big price spikes or hype periods.

To help with this, Bitcoin added things like SegWit and the Lightning Network. These upgrades aim to speed things up and reduce costs.

Litecoin does better here. It has faster block times and lower fees. That helps it process daily payments more smoothly. It also supports SegWit and works with the Lightning Network.

Still, neither one is as fast as Visa or Mastercard. But they’re both working on it.

Mining Algorithms

Bitcoin and Litecoin both use Proof of Work, but their mining algorithms are different.

Bitcoin uses SHA-256. It’s very secure, but it needs a lot of processing power. Most miners use powerful machines called ASICs—they’re built just for mining Bitcoin.

Litecoin uses Scrypt. It’s more memory-heavy and was easier on hardware in the beginning. Back then, you could mine Litecoin with a normal computer.

Now things have changed. ASICs exist for Scrypt too, so mining Litecoin also needs specialised gear.

The main difference is more about how they started. Litecoin tried to make mining more open to everyone.

Mining Rewards

As of April 2025, Bitcoin miners earn 3.125 BTC per block. This reward gets cut in half every four years in an event called a halving. The next Bitcoin halving is expected in 2028.

Litecoin works the same way. Right now, miners earn 6.25 LTC per block. Litecoin also halves every four years. The last halving was in August 2023, so the next one should happen in 2027.

This system helps control inflation and limits how many coins are created. Over time, mining rewards shrink. The idea is that transaction fees will eventually become the main income for miners.

Energy Consumption

Mining crypto takes a lot of energy. Especially when it comes to Bitcoin.

Bitcoin is one of the most energy-heavy blockchains out there. It uses the SHA-256 algorithm, which needs tons of computing power. Because of that, the network burns through more electricity than some small countries. No joke—it’s a big reason people criticise it.

Litecoin uses less energy overall. It still runs on Proof of Work, so it’s not exactly green. But its Scrypt algorithm is less intense than Bitcoin’s. Also, Litecoin’s network is smaller and blocks are faster, so it doesn’t use as much power.

Neither one is super efficient. Not like Proof of Stake coins such as Ethereum. But if you compare the two, Litecoin is the lighter option.

Adoption Rates

Adoption just means—how many people are actually using these coins in real life.

• Bitcoin wins here, no question. It’s the most well-known crypto in the world. It’s accepted by thousands of merchants, supported by most exchanges, and used by big companies and investors. For many people, Bitcoin is cryptocurrency.
• Litecoin is doing pretty well too, but on a smaller scale. It’s accepted by a decent number of online stores, payment platforms, and even some ATMs. And because of its lower fees and faster transactions, some people prefer it for day-to-day spending.

So while Bitcoin has way more name recognition, Litecoin has carved out a space for practical use.

Use Cases and Practical Applications

Bitcoin’s Role

Bitcoin is mostly treated like digital gold. People don’t really use it to buy coffee or pay rent (though you can in some places). Instead, most holders treat it like an investment.

• Store of value – People buy Bitcoin and hold it, hoping it will increase in price over time.
• Hedge against inflation – Some use it to protect their savings from inflation, especially in countries with unstable currencies.
• Large transfers – It’s used for moving big amounts of money globally without needing a bank.
• Accepted by businesses – Some major companies accept Bitcoin (directly or through payment processors), but it’s more common with online stores and tech-savvy brands.

Litecoin’s Role

Litecoin is more like digital cash. It’s fast, has low fees, and was made for spending.

• Everyday payments – Because it’s quicker and cheaper than Bitcoin, some people use Litecoin to pay for smaller things—like subscriptions, online shopping, or services.
• Cross-border transfers – It’s often used to send money internationally, especially when people want fast and cheap transactions.
• Testbed for new tech – Developers sometimes use Litecoin to test upgrades that could later be added to Bitcoin (like SegWit and Lightning Network).

Conclusion

Bitcoin and Litecoin are different tools for different jobs. Bitcoin is slower but more secure. People mostly use it to store value long-term, not for everyday spending. Litecoin is faster and cheaper to use. It’s better for smaller payments or sending money quickly. Bitcoin is like digital gold. Litecoin is more like digital cash. Both have their place in the crypto world. It just depends on what you want to do.

Now that you know the basics, you can decide which one fits your needs.