Michael Saylor the CEO of Microstrategy, was recently interviewed on Lex Fridman podcast. During the interview Lex asked Michael if there was a second best crypto. In the past Michael has stated there is no second best to Bitcoin. However, on a couple occasions he has discussed Litecoin and how it has similar properties to bitcoin since it shares the same source code.
Lex: "You have said before there is no second best to Bitcoin, what would be the second best?"
Michael Saylor: "I think if you decompose or segment the crypto market you have crypto property, Bitcoin is the king of that, and other bitcoin forks that want to be bearer instrument, store of value, would be a property, a Bitcoin Cash or Litecoin".
Saylor has classified these three as digital properties; Bitcoin, Bitcoin cash and Litecoin. The others are separated into the categories of either crypto platforms or crypto securities.
Now, lets compare Bitcoin cash vs Litecoin.
1. Hash Rate: The primary difference between the two is that Litecoin has a completely different hash algorithm while BCH and BTC share a hash algorithm. Mining on a different algorithm requires a completely different physical miner than both Bitcoin and Bitcoin Cash. Why is this important? Well, being a minority in the hashing algorithm is a security risk. When a chain has a minority share of the hashing algorithm, there is a far greater chance of a 51% attack. Because Bitcoin Cash has a minority in the SHA-256 hash rate, it's trivial for a small group of BTC miners to get together and attack the BCH chain. Bitcoin cash has a measly .009% of the the total SHA-256 global hashrate. Meanwhile, Litecoin has 99% of the total Scrypt global hashrate. This makes LTC far more secure than BCH even at equal market capitalizations and equal security budgets. Hashrate dominance matters.
2. Speed: Another difference between Bitcoin cash and Litecoin, is that Litecoin is always 4x faster than both Bitcoin and Bitcoin cash. Litecoin's block times are every 2.5 minutes on average compared to Bitcoin and Bitcoin cash, at 10 minutes each. Therefore, finding those first few confirmations on the litecoin network is always quicker and makes for a better user experience.
3. Founders Stash: The creator, Satoshi Nakamoto, owns an estimated 4.7% supply of Bitcoin, and because BCH is a fork of BTC it shares much of the chain history of BTC, meaning he also owns 4.7% of Bitcoin cash. Satoshi left the project in late 2010 but it isn't known if he will return to collect his coins which would present price risk. In addition, Satoshi hasn't contributed to the project since 2010 while Charlie Lee, the creator of Litecoin, continues to work full time on the project yet no longer holds any position in LTC. This allows him to focus on long-term value creation of Litecoin, steering the network towards sustainable growth. Rather than being incentivized to pump and dump the project, like many other crypto founders who've disappeared entirely from the space while pocketing billions, Charlie continues to donate his time, talent, and money to the advancement of not only Litecoin but the entire cryptocurrency space.
4. Blocksize: Block size matters for decentralization of the network, which allows for people at home to run nodes as validators on the network. The block size limit establishes the trade-off between utility (how many tx's can be processed) and system security (centralization risk). Increased block size increases throughput but also increases the resource cost of transaction validation (i.e. processing, storage, and bandwidth). As the cost of validation increases, security is negatively impacted.. If the size of the blockchain increases too fast, it prices people out from running nodes at home (harder to bootstrap nodes due to bandwidth limitations, storage capacity, etc.). Litecoin has a smaller total blockchain size at 80GB vs Bitcoin Cash at 215GB. The LTC block size is 2.6x smaller. This means it's easier for people to download the chain and run a full-node than it is to run either a BTC or BCH node.
Michael Saylor: I think if you pushed me, and said what's the second best, I said, the world wants two things, it wants crypto property as a savings account and cryptocurrency as a checking account and that means the most popular thing will be a stable coin dollar"
Michael in a previous interview in 2020 has said: “Litecoin is an example of an innovative crypto.” “I’m sure litecoin will do better than the other cryptos, at solving the problems litecoin solves.”
It's pretty clear that Litecoin is the second best crypto property next to Bitcoin Mr. Saylor.
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