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Author Topic: Why is litecoin faster than bitcoin? What are the tradeoffs?  (Read 663 times)
bct2702
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December 10, 2017, 03:29:31 AM
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Okay, so none of the articles I've read online really are answering my fundamental question:  Why is is the transaction processing speed of litecoin faster than that of bitcoin?
 
I understand the fundamental differences between the two:

1) 84 million max litecoin vs. 21 million max bitcoin
2) Scrypt vs. SHA256--the correllary being that litecoin prevents specialized bitcoin mining hardware
3) Bitcoin has the first mover advantage and is generally more popular
4) Bitcoin was created by Satoshi Nakamoto and, since his disappearance, the project is run by consensus in the bitcoin world.  Litecoin was created and is run by a single individual, Charlie Lee.
 
What I don't understand is why it takes litecoin only 2.5 minutes to confirm a transaction/generate a block vs. 10 minutes for bitcoin?
 
Does litecoin use superior technology?  If so, why has bitcoin not adopted it? 

Does litecoin cut corners regarding the security of the transaction? 
 
The economist in me is trying to understand the tradeoff here.
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ranochigo
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December 10, 2017, 03:37:50 AM
 #2

What I don't understand is why it takes litecoin only 2.5 minutes to confirm a transaction/generate a block vs. 10 minutes for bitcoin?
 
Does litecoin use superior technology?  If so, why has bitcoin not adopted it? 

Does litecoin cut corners regarding the security of the transaction? 
 
The economist in me is trying to understand the tradeoff here.
No. The block interval depends on the difficulty of generating a block. The specification of Litecoin is for the block intervals to 2.5mins and for Bitcoin to be 10 minutes. For each difficulty adjustment, Litecoin attempts to make it difficult/easy to generate a block such that the time it takes between each block is 2.5 minutes.

There's no significant tradeoffs with the security. With the 10 minutes, there are less orphans than the 2.5 minutes block interval however.

bct2702
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December 10, 2017, 03:55:23 AM
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No. The block interval depends on the difficulty of generating a block. The specification of Litecoin is for the block intervals to 2.5mins and for Bitcoin to be 10 minutes. For each difficulty adjustment, Litecoin attempts to make it difficult/easy to generate a block such that the time it takes between each block is 2.5 minutes.

There's no significant tradeoffs with the security. With the 10 minutes, there are less orphans than the 2.5 minutes block interval however.

So the only reason that bitcoin has a longer block interval time is because it wants fewer orphaned blocks?  What are the practical tradeoffs between are fewer orphaned blocks vs. a shorter block interval?
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December 10, 2017, 05:46:40 AM
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No. The block interval depends on the difficulty of generating a block. The specification of Litecoin is for the block intervals to 2.5mins and for Bitcoin to be 10 minutes. For each difficulty adjustment, Litecoin attempts to make it difficult/easy to generate a block such that the time it takes between each block is 2.5 minutes.

There's no significant tradeoffs with the security. With the 10 minutes, there are less orphans than the 2.5 minutes block interval however.

So the only reason that bitcoin has a longer block interval time is because it wants fewer orphaned blocks?  What are the practical tradeoffs between are fewer orphaned blocks vs. a shorter block interval?
Less number of orphans means having x confirmations is more safe to accept, even when factoring in the difference in block generation time.

That being said, both coins have very low orphan rates, which are both negligible because of improvements in technology and generally small block sizes.

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bct2702
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December 10, 2017, 01:22:39 PM
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Less number of orphans means having x confirmations is more safe to accept, even when factoring in the difference in block generation time.

That being said, both coins have very low orphan rates, which are both negligible because of improvements in technology and generally small block sizes.

It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
ranochigo
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December 10, 2017, 04:03:10 PM
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It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
Blockchain formation speed? What do you mean? As in the block interval? It looks good to me, to have a faster confirmation.

But well, there are obviously various other concerns with the decrease in block interval. Take for example, you're going to have to decrease the block size more and more, requiring a fork every single time. Additionally, it might lead to a centralisation in mining power where people with slow connections find it more worthwhile to join a bigger mining pool instead.

ETFbitcoin
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December 10, 2017, 04:39:14 PM
 #7

Just like what other members explained, faster confirmation isn't always good thing since it will risks block orphan which make merchants hesitant to accept transaction only with one or two confirmation. Furthermore, it's risky when everyone use coins with fast block interval while nodes/miners can't keep up and could risk decentralization.

Use SegWit and enjoy lower fees
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December 10, 2017, 06:07:15 PM
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How about size of the blockchain.
Bitcoin blockchain size is currently at 172 GB and assuming Litecoin could have more adoption and full blocks it could potentially have 688 GB blockchain by now (4x more than bitcoin).

LTC max block size (without SegWit) = 1 MB
Average time between blocks = 2.5
Total blockchain size growth in case of full blocks = 576 MB per day = 17,280 MB per month

BTC max block size (without SegWit) = 1 MB
Average time between blocks = 10
Total blockchain size growth in case of full blocks = 144 MB per day = 4,320 MB per month

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December 11, 2017, 04:16:16 AM
 #9

Less number of orphans means having x confirmations is more safe to accept, even when factoring in the difference in block generation time.

That being said, both coins have very low orphan rates, which are both negligible because of improvements in technology and generally small block sizes.

It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
From a technical standpoint, you are correct. Users use bitcoin because of higher merchant acceptance, and higher exchange liquidity. 

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bct2702
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December 11, 2017, 04:48:55 PM
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It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
From a technical standpoint, you are correct. Users use bitcoin because of higher merchant acceptance, and higher exchange liquidity. 

So why hasn't bitcoin adopted these improvements? I don't understand...
sahil1301
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December 11, 2017, 04:58:20 PM
 #11

Because It is used less often Wink
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December 11, 2017, 06:02:57 PM
 #12

If Bitcoin users switch over to SegWit addresses, they would see a significant improvement in confirmation times, but the

problem is most services are not supporting it yet. Litecoin implemented SegWit before Bitcoin and the users are seeing the

benefit of that. LiteCoin will most probably also be the first coin to implement the Lightning Network.  Roll Eyes {Not that it is needed

now}

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CryptoDEATH99
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December 11, 2017, 06:12:07 PM
 #13

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December 11, 2017, 06:21:28 PM
 #14

Your question, btc2702, seems legitimate and I am curious to know the original motives for creating litecoin.

My two cents. With 2.5minutes instead of 10 you have 4 times more chance for 2 blocks to be mined in a same time interval (of say 30seconds for example or the average time needed for block propagation). So some nodes receive block 1 before block 2 and others block 2 before block 1. That's ok for a small amount but if you receive a big amount then you would want to make sure it was not double spent. Also it can become a mess if nodes have to keep track of unspent transactions and you have several forks going on. Nodes would disagree and transactions would be blocked. Doesn't seem serious overall.
 
An other problem mentioned above is high propagation time/generation time gives an advantage to big miners and makes the whole thing more centralized.
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December 12, 2017, 01:27:58 AM
 #15


It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
From a technical standpoint, you are correct. Users use bitcoin because of higher merchant acceptance, and higher exchange liquidity. 

So why hasn't bitcoin adopted these improvements? I don't understand...

Because of aforementioned orphan issue and the increased rate of blockchain growth which would subsequently increase the risk of centralization further down the road. Additionally it would have required a hardfork, which back in the day wasn't treated as lightheartedly as nowadays.

In the end it breaks down to different design philosophies. The beauty of open source and the free market of cryptocurrencies is that you can always choose to abandon one cryptocurrency over the other -- or hold a selection of cryptocurrencies based on their respective merits.

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December 12, 2017, 06:03:15 AM
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It sounds like you're saying that Bitcoin is, from a practical perspective, inferior in all ways that matter to users of a currency:

- Nearly quadruple the blockchain formation speed
- Equivalent security

What am I missing?
From a technical standpoint, you are correct. Users use bitcoin because of higher merchant acceptance, and higher exchange liquidity. 

So why hasn't bitcoin adopted these improvements? I don't understand...
Changing from a 10 minute block time to a 2.5 minute block time would require a hard fork, which in-itself would be controversial because it has never been done before. Decreasing the block time would also do little to solve the scaling issue, and may complicate further scaling proposals in the future as if the max block size gets large enough, there will be a higher orphan rate with the lower block generation time.

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