Data compiled by @MASTERBTCLTC shows the number of Litecoin transactions is just under 75% of that of the number of Bitcoin transactions.
“Litecoin transactions are 75% of the total bitcoin transactions.
When will litecoin transactions flip bitcoin transactions?
Sometime in 2021 I predict.
227k BTC vs 168k LTC transactions.”
More significantly, @MASTERBTCLTC suggests this could be the start of an uptrend leading to a flippening in transaction count sometime this year.
Source: @MASTERBTCLTC on Twitter.com
Considering wider factors, including the environmental argument against proof-of-work tokens, what can we deduce from this trend?
The Difference Between Litecoin and Bitcoin
Even though Litecoin is a Bitcoin fork, it differs in terms of its hashing algorithm, supply, and block transaction times.
Litecoin has a 2.5 minute block confirmation time versus 10 minutes for Bitcoin. This focus on speed and low transaction fees make it more suitable for microtransactions and point of sale payments.
However, the fundamental difference between the two lies in Litecoin’s use of the newer Scrypt Proof-of-Work (PoW) algorithm over Bitcoin’s SHA-256.
Cryptocurrency mining can happen using a CPU, GPU, or ASIC miner. ASIC miners can generate more hashes (tries) per second to match 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 since come onto the market, a significant portion of Litecoin mining still occurs using CPUs and GPUs. This makes mining Litecoin more accessible for everyday people.
What’s Behind This Trend?
Much has been said about the environmental damage caused by Bitcoin mining in recent weeks. Although Litecoin and Bitcoin employ computationally intensive proof-of-work algorithms, Litecoin’s Scrypt model relies more heavily on memory than out and out processing power.
The upshot to this reduces the advantage of ASICs and increases network participation and energy efficiency. Hence some would argue that Litecoin is a greener token.
Research compiled by TRG Datacenters showed that Litecoin consumed 18.522 kilowatt-hours per transaction. Unsurprisingly, Bitcoin came bottom of the list, consuming 707 kilowatt-hours per transaction.
Interestingly, Dogecoin, which also uses a Scrypt algorithm, consumed just 0.12 kilowatt-hours per transaction.
At the present time, it’s too speculative to state that crypto users are increasingly turning to Litecoin for green reasons.
But at the same time, the three months of data compiled by @MASTERBTCLTC shows a definite downtrend, of lower highs, in usage for Bitcoin.
Taken in conjunction with Litecoin’s rising transaction count this week, this may suggest users increasingly see Bitcoin primarily as a store of value, rather than a coin to make payment transactions with.
Source: LTCUSD on TradingView.com