Bitcoin and Litecoin are two of the oldest and most recognized cryptocurrencies, each playing a distinct role in the digital asset ecosystem. Bitcoin is widely recognized as the leading store of value, often referred to as "digital gold." Litecoin, known as "digital silver," was created to provide faster transactions and a more accessible mining process. However, with technological advancements and greater institutional adoption, Litecoin’s relevance is being scrutinized.

In this article, SwapSpace CEO Andrew Wind explores the technical, economic, and adoption factors that determine whether Litecoin remains a viable alternative to Bitcoin.

Bitcoin was introduced in 2009 by the pseudonymous Satoshi Nakamoto as the first decentralized cryptocurrency. It aimed to provide a peer-to-peer financial system free from central control, built on blockchain technology with a fixed supply of 21 million coins. Over the years, Bitcoin has gained mainstream recognition, evolving from an experimental asset to a global store of value and a hedge against inflation.

In 2011, Charlie Lee, a former Google engineer, launched Litecoin as a "lighter" version of Bitcoin. It incorporated several modifications, including a faster block generation time (2.5 minutes vs. Bitcoin’s 10 minutes) and a different hashing algorithm to improve transaction efficiency and mining accessibility. Initially, Litecoin positioned itself as a complementary asset to Bitcoin, often referred to as the “silver to Bitcoin’s gold”.

Interesting fact! Litecoin has historically been a testing ground for Bitcoin upgrades. For example, it was the first major blockchain to implement Segregated Witness (SegWit) in 2017, proving its viability before Bitcoin adopted it. 

While Bitcoin kept its role as the premier cryptocurrency, Litecoin remained relevant due to its lower fees and faster transactions. However, as alternative blockchain networks and Layer 2 scaling solutions rise, Litecoin’s role faces mounting pressure, raising concerns about its long-term viability in an evolving digital economy.

Bitcoin and Litecoin share the same fundamental blockchain principles but differ in key technical aspects that impact their speed, security, and usability.

• Consensus mechanism & mining

Bitcoin uses the SHA-256 hashing algorithm, which requires significant computational power, making mining highly competitive and reliant on ASIC (Application-Specific Integrated Circuit) hardware.

Litecoin employs the Scrypt algorithm, initially designed to be more accessible to everyday users with consumer-grade hardware. However, over time, Scrypt mining has also become dominated by ASICs, reducing its decentralization advantage.

• Block time & transaction speed

Bitcoin has a block time of 10 minutes, while Litecoin processes blocks in just 2.5 minutes. This means Litecoin transactions confirm four times faster, making it more suitable for everyday payments. However, both networks have adopted the Lightning Network, which greatly enhances transaction speeds beyond their base layer capabilities. By enabling near-instant transactions, the Lightning Network reduces settlement times from Bitcoin's 10 minutes and Litecoin's 2.5 minutes per block to just milliseconds or seconds.

• Total supply & scarcity

Bitcoin has a fixed supply of 21 million coins, reinforcing its status as a scarce digital asset. Litecoin, with a total supply of 84 million, is four times more abundant. While both assets undergo halving events to reduce mining rewards, Bitcoin’s higher scarcity often makes it a stronger store of value.

• Scalability & upgrades

Both Bitcoin and Litecoin leverage SegWit and the Lightning Network to facilitate off-chain transactions. However, Litecoin sets itself apart by incorporating  MimbleWimble, a privacy-focused protocol that hides transaction details and improves scalability. This feature is not yet integrated into Bitcoin’s core protocol.

Ultimately, Litecoin offers faster and cheaper transactions ($0.05, while the average transaction fee for Bitcoin is approximately $2.62), but Bitcoin remains the dominant network due to its unmatched security, adoption, and scarcity.

Bitcoin is the undisputed leader in cryptocurrency adoption. According to CoinMarketCap, by February 14, 2025, its market cap exceeded $1,91 trillion. It is widely recognized as a store of value, with major institutions such as BlackRock, Fidelity, and Tesla holding BTC coins on their balance sheets. Additionally, Bitcoin ETFs have further legitimized their role in traditional finance. Around 46 million Americans reportedly own Bitcoin, reinforcing its mainstream adoption.

Litecoin, while significantly smaller, has maintained a steady presence in the market. With a market cap of around $9,5 billion in February 2025, it ranks among the top cryptos but lags far behind Bitcoin. Despite this, Litecoin remains one of the most widely accepted altcoins, supported by over 3,000 merchants worldwide, including major payment platforms like PayPal. Its faster transactions and lower fees make it a practical choice for payments, with average transaction fees typically under $0.01 compared to Bitcoin’s often volatile fees.

Interesting fact! Throughout 2024, Litecoin maintained an average of 401,000 daily active addresses, marking a 10% increase from the previous year. This growth indicates a strengthening user base and heightened network engagement.

Security is one of the most critical factors in evaluating a cryptocurrency’s long-term viability.

• As of January 26, 2025, Litecoin's all-time high hash rate reached approximately 2.54 petahashes per second (PH/s), which is 0.00254 exahashes per second (EH/s), making it more vulnerable to potential attacks compared to Bitcoin. Although Litecoin has never experienced a successful 51% attack, its lower hash rate and mining difficulty make it more susceptible to such risks, as demonstrated by attacks on other proof-of-work chains with similar hash rates.

• Bitcoin remains the most secure blockchain. As of mid-2024, Bitcoin's network hash rate reached approximately 733 EH/s, making it highly resistant to 51% attacks. Its mining network is decentralized, with thousands of nodes across the globe, reinforcing its security.

Another key aspect of network strength is ongoing development.

• Bitcoin has a highly active development community, regularly pushing updates to improve scalability and privacy.

• Litecoin, while actively maintained, has a smaller developer base and often implements Bitcoin’s upgrades, such as SegWit and the Lightning Network, after they are tested on Bitcoin.

Overall, Bitcoin’s overwhelming hash power and global node distribution make it the most secure cryptocurrency. Litecoin, while still reliable, does not offer the same level of security and decentralization as Bitcoin.

Bitcoin and Litecoin follow similar economic models, both using proof-of-work (PoW) consensus and undergoing halving events to reduce mining rewards approximately every four years. Bitcoin’s fixed supply of 21 million coins reinforces its scarcity, making it a strong store of value. Institutional investors, ETFs, and sovereign adoption have further strengthened Bitcoin’s investment appeal.

As stated earlier, Litecoin's maximum supply is four times that of Bitcoin. While this reduces its scarcity, Litecoin still benefits from a deflationary model due to halvings. However, Litecoin’s lower market capitalization limits its investment appeal, as it lacks Bitcoin’s institutional backing.

For investors, Bitcoin remains the dominant choice for long-term value preservation, while Litecoin is seen as a speculative alternative. Although Litecoin offers faster and cheaper transactions, its role as a long-term investment is often overshadowed by Bitcoin’s growing dominance.

Litecoin continues to hold relevance in the crypto space, particularly for faster transactions and lower fees. Its integration with Visa and support for privacy-focused upgrades have helped maintain its adoption. However, competition from Layer 2 solutions and newer blockchains like Solana and Polygon poses a challenge. Additionally, the increasing use of stablecoins and central bank digital currencies (CBDCs) may reduce the demand for Litecoin as a payment solution.

That said, Litecoin’s strong community and continued development indicate it won’t disappear anytime soon. While it may not replace Bitcoin, Litecoin remains a viable alternative for payments, especially where speed and low fees matter.

Bitcoin and Litecoin share a deep-rooted history, but their roles in the crypto ecosystem have diverged. Bitcoin remains the dominant store of value, backed by institutional investors and unparalleled security. Litecoin, while still functional as a payment network, faces increasing competition from faster and more scalable blockchains.

Unless Litecoin introduces groundbreaking innovations, its future will likely be as a secondary payment option rather than a true Bitcoin competitor.