The killer, who was 15 at the time, knifed Salum Kombo in the chest for the "pathetic" reason that he had called him a "pussy".
Judge Nicholas Loraine-Smith, sentencing him at Southwark Crown Court in central London, said: "There was nothing brave about what you did. This was quite simply an act of cowardice, as so many stabbings are."
Mr Kombo, 18, stumbled and collapsed to the ground before bleeding to death near the scene of the attack in Bromley-by-Bow, east London, last December.
David Jeremy QC, prosecuting, said: "A young man has lost his life following a petty dispute and a perceived loss of face by the perpetrator."
Mr Jeremy said a previous friendship between Mr Kombo and the defendant had turned to "hostility" and they had a fight last summer after a football match in Bartlett Park.
He said: "In the days leading up to December 20 there had been a trade of insults and threats between these two boys, both directly and on Facebook.
"At one stage the boy who died called (the defendant) a pussy. That insult appears to have particularly incensed him.
"It was the combination of a silly argument, (the defendant's) over-sensitivity about his own dignity and status, and his own willingness to carry a knife that led to the events of December 20."
The court heard that on the night of the murder the killer had been with friends outside a fish bar and they tried to calm him down when he became angry and started talking about stabbing the older youth.
When Mr Kombo turned up, the two teenagers walked off, apparently to settle their differences, when the younger boy pulled out a knife without warning and stabbed him to the upper chest.
Afterwards he was seen "pounding" a wall "howling at the perceived affront to his own dignity, being called a pussy", the court was told.
"That was the pathetic reason as to why this terrible event happened - because he wanted to show he wasn't a pussy," said Mr Jeremy.
The boy, who cannot be named because of his age, later admitted the stabbing but claimed he was acting in self-defence.
An Old Bailey jury rejected his explanation and convicted him of murder.
The judge told the defendant he had been good friends with the victim and his family, but added: "You killed him because he called you a pussy.
"You were angry and humiliated and you wanted to fight him and he was quite prepared to fight you.
"But you knew in a fair fight you would lose."
The judge said the boy had tried to fight Mr Kombo before but had been restrained by friends and had his knife taken away from him.
But Mr Kombo returned the knife which later killed him to the defendant after the first incident.
"This time you decided to take that knife and use it in a surprise attack upon him," the judge said.
"This was not a decision you took on the spur of the moment. You thought about it for two or three days. You wound yourself up into a cold fury.
"Your friends tried to stop you but you would not listen. You even thought Salum had been round to your house to try to stop a fight.
After meeting up to settle their differences, "you caught him unawares and you stabbed him in the chest".
The judge added that after stabbing his friend, the defendant shouted: "Nobody calls me a pussy. I don't care if I go to jail."
Ordering him to be detained at Her Majesty's pleasure, the judge said he must serve a minimum of 14 years before being considered for release.
Members of the victim's family burst into tears in the public while one young girl fell to the floor and others cried "Oh my God" and "Yes".
Graham Trembath QC, in mitigation for the defendant, said: "The background to this is two best friends who have a strange dynamic in their relationship."
The two boys were best friends and "like brothers", he said.
But Mr Kombo "challenged and repeatedly challenged (the defendant) to a fight".
Mr Trembath said his client was just 15 at the time and believed he was acting in self-defence by striking a pre-emptive blow before a fight which he thought he was going to lose.
He intended to cause serious bodily harm, rather than kill.
Mr Trembath also said his client was "not particularly intelligent" and had difficulty articulating his feelings over the tragic incident.
Outside court, a family friend of the victim said teenagers were playing "cowboys and Indians on a different level".
"It's 2010, isn't it, and it's getting worse with each generation. I know when I was that age nothing like that would happen with my friends," she told Sky News.
"It's strange that he would feel so harsh towards a friend and go that far.
"They're playing cowboys and Indians on a different level. It's disgusting."
Asked about the sentence, she added: "It's a good result. It's justice, isn't it?"
