Data shows that the number of Litecoin transactions is just under 75% of the number of Bitcoin transactions. Will LTC soon overtake BTC, as one analyst predicts?
"Litecoin transactions are equivalent to 75% of total Bitcoin transactions.
When will Litecoin transactions overtake Bitcoin transactions?
Sometime in 2021 I predict.
227k BTC vs 168k LTC transactions."
More importantly: @MASTERBTCLTC suggests that this could be the start of an upward trend that will see LTC overtake BTC in terms of transaction count at some point this year.
Taking into account other factors - including the environmental argument against proof-of-work tokens: what can we deduce from this trend?
The difference between Litecoin and Bitcoin
Although Litecoin is a Bitcoin fork, it differs in terms of its hashing algorithm, supply and block transaction times.
Litecoin has a block confirmation time of 2.5 minutes compared to 10 minutes for Bitcoin. This focus on speed and low transaction fees make LTC more suitable for microtransactions and point-of-sale payments.
Currently, average LTC transaction fees are around $0.0104, compared to the average BTC transaction fee of $8.131.
However, the fundamental difference between the two is the use of Litecoin's newer Scrypt Proof-of-Work (PoW) algorithm versus Bitcoin's SHA-256.
Crypto mining can be done with a CPU, GPU or ASIC miner. ASIC miners can generate more hashes (attempts) per second to find the target data string and "win" the block. Therefore, ASIC miners have a distinct advantage over other mining methods.
But Scrypt was chosen by Litecoin developers because it is less responsive to ASIC mining. Although Scrypt ASIC miners have now entered the market, a significant part of Litecoin mining still takes place with CPUs and GPUs. This makes mining Litecoin more accessible to the common man.
What is behind this trend?
In recent weeks, there has been a lot of talk about the environmental damage caused by bitcoin mining. Although Litecoin and Bitcoin use computationally intensive proof-of-work algorithms, Litecoin's scrypt model relies more on memory than pure computational power.
This reduces the advantage of ASICs and increases network participation and energy efficiency. As a result, some argue that Litecoin is a "greener" token.
Research conducted by TRG Datacenters shows that Litecoin consumes 18,522 kilowatt hours per transaction. Unsurprisingly, Bitcoin is at the bottom of the list, consuming 707 kilowatt hours per transaction.
Interestingly, Dogecoin, which also uses a scrypt algorithm, consumes only 0.12 kilowatt hours per transaction.
At this stage, it is pure speculation that crypto users are increasingly turning to Litecoin for environmental reasons.
But at the same time, data compiled by @MASTERBTCLTC for the last three months shows a clear downward trend with lower highs in Bitcoin usage.
Combined with the rising number of transactions on Litecoin this week, this could indicate that users are increasingly seeing Bitcoin as a store of value rather than a coin with which to make payment transactions.