Litecoin vs Binance Coin, two of the largest cryptocurrencies around by market capitalisation. While Litecoin has made a real name for itself in recent years, Binance Coin has demonstrated its strength as the utility token of one of the leading centralised crypto exchanges, Binance. The two coins have very different beginnings but have both made their name in the DeFi world for different reasons. Read on to learn about both Litecoin vs Binance Coin, their similarities and differences and the advantages to trading either one of them or both! We have also produced a list of our top recommended Litecoin and Binance Coin brokers and exchanges below.
What Is Litecoin?
Litecoin (LTC) is a decentralized, peer-to-peer cryptocurrency and consistently ranks in the top 15 cryptos by market capitalisation. Litecoin is widely traded on most major crypto exchanges, making it one of the more liquid global DeFi markets. Litecoin’s network offers instant, near-zero cost payments that can be used by individuals and institutions anywhere in the world without an intermediary, like a bank or credit card company, having to process the transaction. It can be used to purchase goods and services and to transfer funds between accounts.
Litecoin: Brief History
To properly compare Litecoin vs Binance Coin, you should first understand the history of each.
LTC was founded by former Google engineer, Charlie Lee, in 2011, two years after Bitcoin. It was widely considered as the first successful alternative cryptocurrency or “altcoin” to Bitcoin. However, since the early days when Litecoin was a strong competitor to Bitcoin, its popularity has diminished as more cryptos have entered the market. The supply of Litecoins is high and fixed, meaning there will never be more than 84 million LTC in circulation. The Litecoin Foundation estimates that it will be around 2142 when the maximum of 84m Litecoins will be reached.
How Litecoin Works
Like many other decentralised cryptocurrencies, Litecoin is not issued by a government and is not regulated by a central bank. LTC are created by mining, an elaborate procedure that consists of processing a list of LTC transactions. It uses blockchain technology to record a decentralised, public ledger of all transactions. Every 2.5 minutes, a new block (a ledger entry of recent global LTC transactions) is created by the Litecoin network. The block is verified by mining software and made visible to system participants (miners). Once verified by a miner, the next block enters the chain, which is a record of every Litecoin transaction ever made.
Litecoin uses a form of proof-of-work mining to enable anyone who dedicates computing hardware to add new blocks to the blockchain with a Scrypt algorithm to make the process more democratic.
Scrypt demands that calculations for mining are carried out sequentially. The first miner to successfully verify a block is rewarded with a certain number of LTCs. However, this reward reduces with time until the last Litecoin is mined. In August 2019, an LTC halving took place, where the reward was reduced from 25 LTC per block to 12.5 LTC. This amount gets halved roughly every 4 years.
Mining cryptocurrency requires a huge amount of processing power from specialised hardware. Unlike most other cryptocurrencies, Litecoin can be mined with personal computers. The mining process is quick and has improved storage efficiency, making transactions faster and cheaper. However, they are generally smaller in size.
What Is Binance Coin?
Next up in the Litecoin vs Binance Coin, BNB is the cryptocurrency issued by the Binance exchange. As of August 2021, BNB was the fourth-largest cryptocurrency by market capitalisation behind Bitcoin, Ethereum, and USD Tether.
Binance Coin: Brief History
BNB was initially based on the Ethereum network but has since become the native currency of Binance’s own blockchain. As of June 2021, the Binance exchange was the largest crypto exchange in the world, supporting more than 1.4 million transactions per second. Binance Coin was created in July 2017 as a utility token for discounted trading fees, created to empower the Binance platform and fuel its operations to establish a sustainable ecosystem, though its uses have since expanded.
Having a native currency reduces the exchange’s dependency on traditional money, which can cause delays and extra charges, placing a greater financial burden on the end-user. Using BNB on Binance provides a seamless experience while saving investors money on trades.
Binance Coin is pre-mined and has a strict maximum of 200 million BNB tokens that were issued for use. Every quarter, Binance uses 20% of its profits to repurchase and permanently destroy or burn any BNB in its treasury. In April 2021, Binance burned approximately $595m worth of tokens. The exchange has completed more than 15 burns to date and will continue to perform quarterly burns until it buys back and destroys 100 million BNBs – 50% of the total supply. This process ensures that the supply of Binance Coins remains finite, making it scarce and more valuable.
How Binance Coin Works
Considering the basic workings of Litecoin vs Binance Coin, BNB was created as a utility token for discounted trading fees but has since expanded to numerous applications on a wide range of platforms. It can be used as payment for transaction fees on the Binance Smart Chain, Binance.com, and Binance DEX. Users of Binance Coin receive a discount in transaction fees on the exchange as an incentive.
BNB can also be used to make credit card payments, book travel accommodation, donate to charity, purchase online services like buying virtual gifts and for financial purposes like taking out loans or making investments.
BNB can also be used to invest in certain Initial Coin Offerings (ICOs) that are listed through Binance’s Launchpad. This is where new crypto tokens list on the Binance exchange and using its native coin provides a seamless marketplace for trading in both well-established and new cryptocurrencies. Binance Coin’s popularity has been bolstered by the support of various partnerships, including a high-end Asian live video streaming platform, Uplive, which sells virtual gifts for BNB tokens. In addition, it is supported by the platform, mobile app and Visa debit card of Monaco.
Litecoin Vs Binance Coin Similarities
Quick Transaction Speeds
Both Litecoin vs Binance Coin are known for their quick transaction speeds—2.5 minutes for Litecoin vs 1 second for BNB. While BNB is much faster than Litecoin, both are very quick compared to the transaction speed of Bitcoin, for example, at 10 minutes.
Litecoin vs Binance Coin both have a limited number of coins. However, there are 84 million LTC available, while Binance has capped the BNB supply at 200 million. As there is a fixed number of LTC tokens, inflation will not affect the overall value of the currency, unlike fiats like the USD or GBP. The limited supply of both coins increases their scarcity and value.
Most cryptocurrencies are not regulated by any central authority like a government or bank, setting them apart from fiat currencies. Litecoin vs Binance Coin are no different.
While BNB is semi-centralized, any holder of the token has a say in the future of the blockchain and neither crypto is regulated.
Both Litecoin vs Binance Coin reached their all-time highs of $413 and $686, respectively, on 10 May 2021.The prices of Litecoin can be affected by security and public perception.For example, in September 2021, a fake press release was published on GlobalNewsWire announcing a partnership between Litecoin and Walmart, causing the price of LTC to increase by approximately 30%.The average transaction fee is minuscule compared to the percentage fees used by credit card companies, banks and payment processors like PayPal.
Low Transaction Fees
Litecoin users can expect to pay around $0.03 or $.04 on average in transaction fees.As Binance Coin was created for internal exchange purposes, there is no fee directly associated with the network.However, if you make any other trade on the Binance exchange, you will pay 0.1% but you will also get a 50% discount if you pay for trades with BNB (0.05%).
Discussing the security of Litecoin vs Binance coin, LTC provides a high level of privacy but is not necessarily completely anonymous as large exchanges require ID verification to buy and sell cryptos.Litecoin also attempts to protect users against flood attacks, where spammers aim to crash the network using a very large number of small transactions, by charging a per-transaction fee, which would make such an attack very expensive.
Binance is generally considered a secure platform with trusted protection features.
The exchange uses a multi-cluster and multi-tier framework to ensure the safety of investors’ funds. However, like Litecoin, a verified account is required to use BNB, so complete anonymity is not possible.
Both Litecoin and Binance Coin require a digital or cold storage wallet to safely store funds between transactions.
Differences Between Litecoin and Binance Coin
Both Litecoin and Binance Coin rank within the top 15 cryptocurrencies based on their market cap. However, BNB is higher, ranked third, closely following Bitcoin and Ethereum. Litecoin, on the other hand, is close to dropping out of the top 15.
Litecoin uses a proof-of-work (PoW) mining algorithm to secure its network, while Binance Coin was pre-mined and does not use PoW or proof-of-stake (PoS) protocols. Instead, transactions are validated through a proof-of-authority (PoA) model.
Litecoin is a decentralised cryptocurrency, while Binance Coin is a centralised token. This means that BNB’s value, circulation, and development rely heavily on Binance, as over 80% of BNB is either owned or held by the exchange and has limited utility outside its ecosystem.
If government legislation or enforcement were to target Binance, BNB would likely decline.
Comparing Litecoin vs Binance Coin in terms of liquidity, the former is generally much more liquid, with a greater trading volume across more exchanges and platforms.
When you buy Litecoin on an exchange, its price is often quoted against the USD, meaning you sell USD to buy LTC. If the price of Litecoin rises, you can sell it for a profit. However, if the price falls and you sell, you would make a loss. Unlike Litecoin, you cannot buy Binance Coin with fiat currencies like the USD. To buy BNB on Binance, you need to purchase other cryptocurrencies first like Bitcoin, Ethereum or Litecoin.
How To Trade
You can trade Litecoin via leveraged products such as spread betting or CFDs (contracts for difference). This means that you need only deposit a percentage of the full value of a trade to open a position. Therefore, you don’t have to invest all your money at once by buying LTC outright. While leveraged trading allows you to magnify your profits, losses will also be magnified. BNB is a token predominantly used for discounted trading fees on Binance and leverage is not available.
Comparing the usage of Litecoin vs Binance Coin, the former may seem to exist solely to be bought and sold back and forth. However, like other cryptos, it can be used by individuals and institutions to purchase things and transfer funds between accounts.
BNB’s usage goes much further than Litecoin’s, allowing users to pay for travel accommodation, buy virtual gifts and get loans.
Pros Of Litecoin For Traders
There are many benefits for traders using Litecoin vs Binance Coin:
- Low Transaction Fees
- Better Transaction Speeds
- Higher Number of Fixed Coins
- A Different Hashing Algorithm
- Decreased Block Generation Time
Pros Of Binance Coin For Traders
The benefits of using Binance Coin include:
- Low cost
- Flexible usage
- Community trust
- Take part in ICOs
- Quick Transactions
- Unique burndown policy
- Trade Multiple Cryptocurrencies
- 50% trading discount & other incentives
Litecoin Vs Binance Coin Verdict
When evaluating which of Litecoin vs Binance Coin is the best cryptocurrency for you, there are many things to consider. While they are quite similar due to their fast, low-cost transactions, the usage, volume and market capitalisation of each differ. As Binance Coin was developed to be the native coin of the largest exchange in the world, its value and use have surged, though it does still have limitations, such as its centralisation, that Litecoin does not have.
Is Litecoin A Good Investment?
As well as being one of the oldest cryptos on the market, Litecoin is one of the more popular altcoins.
It is relatively stable and consistently ranks in the top 15 cryptocurrencies by market cap.
However, there are no great cases of investors using Litecoin in a meaningful way.
Litecoin’s founder, Charlie Lee, sold all of his LTC in 2017, causing the market to question its worthiness.