Data compiled by @MASTERBTCLTC shows that the number of Litecoin transactions is almost 75% of the number of Bitcoin transactions.
“Litecoin transactions make up 75% of all Bitcoin transactions.
When will Litecoin transactions flip Bitcoin transactions?
Sometime in 2021 I predict.
227,000 BTC versus 168,000 LTC transactions. “
More importantly, @MASTERBTCLTC suggests that this could be the start of an uptrend that could lead to a transaction count reversal sometime this year.
Source: @MASTERBTCLTC on Twitter.com
Given broader factors, including the environmental argument against proof-of-work tokens, what can we infer from this trend?
The difference between Litecoin and Bitcoin
Although Litecoin is a Bitcoin fork, it differs in terms of 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 makes it more suitable for microtransactions and point-of-sale payments.
Currently, the average LTC transaction fees are around $ 0.0104. By comparison, the average BTC transaction fee is $ 8.131.
The fundamental difference between the two, however, is that Litecoin uses the newer Scrypt Proof-of-Work (PoW) algorithm over Bitcoin’s SHA-256.
The mining of cryptocurrencies can be done with a CPU, GPU or ASIC miner. ASIC miners can generate more hashes (attempts) per second to match the target data string and “win” the block. Therefore, ASIC miners have a clear 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 hit the market, a significant part of Litecoin mining still takes place with CPUs and GPUs. This makes mining Litecoin more accessible to ordinary people.
What’s behind this trend?
Much has been said in recent weeks 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 on end-to-end computing power.
The result 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 has shown that Litecoin consumes 18,522 kilowatt hours per transaction. Unsurprisingly, Bitcoin came at the bottom of the list, consuming 707 kilowatt hours per transaction.
Interestingly, Dogecoin, which also uses a Scrypt algorithm, only consumed 0.12 kilowatt hours per transaction.
Right now, it’s too speculative to say that crypto users are increasingly turning to Litecoin for green reasons.
At the same time, the three month data compiled by @MASTERBTCLTC shows a significant downward trend with lower highs in the use of Bitcoin.
Coupled with Litecoin’s growing number of transactions this week, this could suggest that users are increasingly viewing Bitcoin primarily as a store of value rather than a coin for payment transactions.
Source: LTCUSD on TradingView.com