Gavin Wood, co-founder of Ethereum. Polkadot aims to provide interoperability between different blockchain networks, allowing them to communicate and share data seamlessly. This is achieved through its innovative sharding technology, which splits the network into multiple parallel chains called parachains. Polkadot also introduces the concept of “validators” who are responsible for securing the network and validating transactions. DOT is the native token of the Polkadot network and is used for staking, governance and transaction fees. Polkadot has gained significant traction in the crypto space since its launch in 2020, and its market capitalisation has grown to over $30 billion.
Litecoin vs Polkadot: Which is Better?
Comparing Litecoin vs Polkadot is not a straightforward task as they are two very different cryptocurrencies with distinct use cases. Litecoin is a digital currency that aims to be a faster and cheaper alternative to Bitcoin, while Polkadot is a blockchain network that aims to provide interoperability between different blockchains. However, both Litecoin and Polkadot have their own strengths and weaknesses, and ultimately, the choice between the two depends on the individual’s investment goals and risk appetite.
Gavin Wood, who also worked on the Ethereum network, is associated with Polkadot. The first initial coin offering (ICO) of DOT, the native cryptocurrency of Polkadot, took place in 2017, and subsequent offerings were held in 2019 and 2020. This indicates that Polkadot is a relatively new cryptocurrency in the market, and there is an ongoing debate across various cryptocurrency networks about whether decentralization, security, or speed should be prioritized.
Polkadot aims to provide a solution to this problem through its nominated proof of stake (NPoS) model and its two blockchain systems. The Relay chain, which is the primary blockchain, coordinates the entire system via the parachains, governs the consensus network, and facilitates cross-chain coordination and integration. The parachains are customizable networks created by traders and the Polkadot user base to serve a specific purpose. Unlike Ethereum and Cosmos, each parachain uses the Polkadot Relay chain’s security and consensus system, ensuring that the network remains decentralized, secure, and fast.
Polkadot is an attractive blockchain network due to the system of bridges currently under construction, which will enable interactions with other crypto networks. In addition, the use of consensus governing and separate blockchains for transaction processing and validation ensures that the network remains decentralized, secure, and fast.
Litecoin Vs Polkadot Similarities
Access to both Litecoin and Polkadot should not be an issue since they are popular cryptocurrencies with significant market capitalizations. As a result, most major exchanges will allow users to make trades and transactions.
There are various cryptocurrency storage methods available, including hot wallets like desktop and mobile wallets, as well as cold wallets, such as the Ledger Nano range or the Trezor Model T.
These options are available to you whether you wish to store Litecoin vs Polkadot.
The methods available to traders of Litecoin vs Polkadot are the same. The most common method is through spot trading, where traders purchase an asset at a certain price and then sell it again later on once the value of the asset has increased to pocket the difference. Leveraged trading opportunities, such as CFDs, are less common given the regulatory restrictions in place around the world, though some major brokers and exchanges will still offer them.
As with all cryptocurrencies, there are frequently large price swings in the valuation of Litecoin vs Polkadot that provide traders with ample opportunities to make profits. For example, both LTC and DOT regularly see fluctuations of over 30% of their values.
Litecoin Vs Polkadot Differences
The difference in average transaction fees for Litecoin vs Polkadot can sometimes be as great as a factor of 10. In 2021, Litecoin transaction fees averaged between $0.01 and $0.1. On the other hand, Polkadot transaction fees averaged around 0.015 DOT, equating to $0.23 for the lowest value of 2021 and $0.53 for the greatest value. The exact DOT fees will vary because they are calculated using three parameters, including one that the trader decides themselves. Firstly, there is the ‘length fee’, which is equal to a constant per-byte fee multiplied by the transaction size in bytes.
Firstly, there is a weight fee that accounts for the time taken to process the transaction.
The total number of transactions that can be processed per second by Litecoin vs Polkadot is a significant amount. Litecoin can only handle 56 transactions per second, whereas 1,000 transactions can take place per second on the Polkadot network – almost 40 times more than LTC.
While both Litecoin vs Polkadot have large market caps and are both within the top 15 most valuable cryptos, there is a roughly $20 billion gap in their current valuation. Polkadot tends to be safely within the top ten cryptocurrencies with at least $30 billion, whereas Litecoin regularly sits between 10th and 15th at around $10 billion.
The two hashing algorithms that are used to determine the network rules of Litecoin vs Polkadot are very distinct models. Litecoin’s proof of work algorithm, called Scrypt, is a high energy demand system that requires users to expend a large degree of effort in order to be trusted to verify transactions and mine new blocks. Polkadot uses a modified version of proof of stake called nominated proof of stake, whereby users stake DOT in order to perform one of the four roles: validator (validate data and govern network), nominator (select the validators), collator (store blockchain history and transactional data) and fisherman (monitor and police the network).
Litecoin vs Polkadot have different models for new block generation that are linked to their hashing algorithms.
Finally, there is an optional tip that is used to speed up the transaction by giving it a higher priority.
Litecoin is a cryptocurrency that requires users to create a mining rig with a large RAM and hash power to solve mathematical puzzles and find correct hashes for new blocks. New blocks are mined every 2.5 minutes, and successful miners are rewarded with 12.5 LTC. On the other hand, Polkadot’s network uses the Blind Assignment of Block Extension (BABE) mechanism, and elected validators produce new blocks every six seconds.
The maximum supply of LTC is 84 million tokens, while DOT has no limit.
Pros Of Litecoin For Traders
- Low transaction fees
- Opportunity for earning Litecoin with a mining rig
- Potential for wider use for purchasing goods and services in day-to-day life
Pros Of Polkadot For Traders
- Strong scalability
- Large market capitalisation means high liquidity
- Already over a billion coins in circulation with no future maximum limit
- Access to user-created parachains to help with trading and customise the experience
Litecoin Vs Polkadot Verdict
Both Litecoin and Polkadot present decent opportunities to make profits and payments thanks to their fast, low-cost transactions. The two blockchain networks also have plans for future growth in both the long and short terms.
However, the underlying technologies of the two cryptos are quite different, presenting different levels of scalability, utility and flexibility, which may affect your decision.
Is Litecoin Vs Polkadot A Better Investment?
If you prefer the idea of using the crypto for day-to-day purchases, then Litecoin may be better suited to you. However, if you wish to develop functions and benefit from a wider network, Polkadot could be ideal. There are many benefits and drawbacks for both Litecoin vs Polkadot and not every benefit is there for every trader, so consider what it is you are looking for.
How Do I Become A Validator On Polkadot?
There is no official application process for Polkadot validators. You simply need to purchase some DOT, create a validator node and register your interest in becoming a validator.
Only once you have been elected by a nominator can you take the role of validator.