What is LiteCoin? Litecoin is often referred to as Bitcoin’s little brother. It is a peer-to-peer Internet currency that enables instant near-zero cost payments to the world. The cryptocurrency, like others, is an open source global payment that is completely decentralized without any central authority. Mathematics plays an important part in securing the network and allows individuals to control their finances.
With substantial industry support, liquidity and trade volume, litecoin is a proven medium of commerce that complements Bitcoin. What sets it apart is that the litecoin blockchain is capable of handling higher transaction volume than bitcoin.
Litecoin versus Bitcoin
One of the major differences that set apart bitcoin and litecoin is their proof of work algorithm. Bitcoin uses the SHA-256 hashing algorithm, which involves calculations that can be greatly accelerated in parallel processing. Litecoin, on the other hand uses the scrypt (pronounced as ‘script’) algorithm. Although this algorithm integrates SHA-256, its calculations are much more serialized than those of bitcoin’s.
Another difference is, litecoin is capable of verifying transactions faster than bitcoin. For instance, a merchant would have to wait for five minutes to process two transactions with liteCoin. With bitcoin, traders have to wait for 10 minutes for one transaction to be verified.
Buy and Sell Litecoin
Although buying litecoin is not really all that different from buying other cryptocurrencies, finding an exchange or platform to sell it may be a challenge. In most likely scenarios, traders usually buy Bitcoin first and trade it for litecoin. However, some exchanges, such as Poloniex, Kraken, SnapCard, Bitrush etc. do facilitate buying litecoin.
Similarly, there are a couple of exchanges that allow selling litecoin through their platform. For instance, portals such as Sragy, BuyUCoin, etc. allow traders to sell litecoin at reasonable prices. To sell, a trader would need to go to an exchange’s sell page, enter the amount in litecoin (LTC), select the wallet he/she wants to sell from, select the bank account in which the litecoin should be deposited in and confirm the order.
Who Should Buy LiteCoin?
Since it looks favourable for litecoin as of now (December 2017), it seems like a worthwhile investment. Some governments have even come around to accepting it. There is a clear trend of surge in cryptocurrency investments such as Bitcoin, LiteCoin, Ripple and Ethereum. For instance, Russia is attempting to legitimize cryptocurrency, as it would help the government to crackdown on money laundering.
How to Buy Litecoin?
It’s a bit hard to buy litecoin with fiat currencies as there aren’t many brokers or exchanges which support it-at the moment. However, there are ways to circumvent this obstacle:
- Peer-to-peer: Traders can buy litecoin from individual sellers. For example, there are traders selling litecoin are prevalent on portals such as litecoinlocal.net and Paxful
- Exchange: Some exchanges support LiteCoin trading such as GDAX, Indacoin and Changelly
- Brokers: Some brokers offer Litecoin trading through Contracts for Differences (CFD’s).
Getting a Litecoin Wallet
Getting a LiteCoin wallet is the prerequisite of trading with this form of cryptocurrency. Pick any exchange that also lists litecoin on their website/app. Most websites/exchanges, let their traders download a wallet upon registration.
According to some video tutorials, traders can also get litecoin wallets by signing into litecoin.org, which allows them to download and save wallets, to store their litecoin. Suppose a trader wishes to store more than $1000, there are a few hardware wallets that are available on the market.
It is prudent to remember that while the litecoin is available on the litecoin blockchain and the wallet holds keys to help one transfer litecoin from one address to another.
Where can I purchase Litecoin?
Since litecoin is a little less accessible, compared to Bitcoin and Ethereum there are different ways to go about purchasing litecoin. Every country has different rules for trading in litecoin. Some exchanges tend to make traders buy bitcoin and then exchange that for litecoin.
Interestingly, Polish exchange, Bitbay trades in different kinds of cryptocurrencies such as Bitcoin, Ethereum, Dash, Litecoin, etc.
Face to face or over the counter trades
Meeting buyers or sellers is possible through some portals such as localbitcoins. Here, you can meet someone who’s interested in buying or selling litecoin through cash. However, such portals are far and few in between.
If a trader does find an interested buyer or seller, they should follow certain precautions and be wary of their surroundings, before going through the trade. One way of going about it is, one can buy bitcoin face to face with cash from a trader on localbitcoins.com. Then he/she can sign up to an exchange that does not require any verification, exchange BTC for LTC and then withdraw LTC to his/her wallet. Another way is by signing into either litecoinlocal.net or finding a litecoin ATM and paying with fiat currency.
Litecoin exchanges
Surprisingly, there is no dearth of litecoin exchanges where one can trade this cryptocurrency in exchange for dollars or bitcoins. Some of the noted litecoin exchanges are Gdax, Bitfinex, Bithumb, Bittrex, Poloniex, Bitstamp, etc. With all benefits surrounding exchanges, one often repeated advice given to litecoin traders is, never to store litecoin on exchanges. Buying them and instantly storing them to offline wallets is a good alternative.
What to look for in a litecoin exchange?
There are different factors to take into consideration when looking for a litecoin exchange. Listed below are some of them:
- Exchange rate: CoinMama, a popular cryptocurrency exchange, offers exchange rate of $5 for 1 litecoin, which is attracting a lot of customers.
- Payment method: Many exchanges are quite relaxed about accepting payment through fiat currency, credit/debit cards, PayPal etc. so, a trader can pick out any exchange such as CoinBase, CoinMama, BitPanda, etc.
- Speed: The success of an exchange depends excessively on the speed at which withdrawals can be made by a trader. So, before signing up with any exchange, make a note of how speedy their transactions are.
- Amount: Not a lot of exchanges offer this information, but a trader needs to know how much amount of litecoin is being sold/bought at which price. One of the handful exchanges is Koinex, which has an order book which provides the amount of litecoin being bought and sold at which price.
- Privacy: Many exchanges’ USP lies in their privacy policies. Traders should review privacy policies of an exchange before signing up. Exchanges such as CoinMama, e-Toro, coinfalcon have stringent privacy policies, to protect their customers.
- Regulatory compliance: When discussing regulatory compliance with respect to cryptocurrency exchanges, it is non-existent because it is an autonomous decentralized currency. However, it is advisable to look up reviews of exchanges to gather an informed opinion before trading.
Litecoin Trading
Litecoin is a vast open-source network and is a cryptocurrency similar to Bitcoin. However, in this context, the topic is purely for trading in litecoin. As discussed above, exchanges are one way of going about it. Another way to trade litecoin is through contract for difference.
When a trader engages in a contract with an exchange, there is an agreement drawn up between the two parties the difference in starting litecoin price and ending price will be settled between them. If the price shoots up, the trader makes a profit, and if the price falls, the trader will make a loss.
Litecoin Mining
There are different ways to mine litecoin. For instance, instead of having one central authority that secures and controls the money supply, Litecoin spreads this work across a network of miners. Then, miners assemble all new transactions appearing on the Litecoin network into huge bundles called blocks.
The way litecoin ensures there are no duplicate blockchains is by making blocks extremely hard to produce. Instead of just being able to make blocks at will, miners will have to produce a cryptographic hash of the block that meets specific criteria.
These days, more people tend to rely more on mining pools as mining independently can lead to over-utilization of a lot of resources which simply does not seem like a worthy investment. Mining pools were invented to share processing power, so that miners can find blocks much faster. Pool users earn shares by sharing proof of work, and then are rewarded accordingly.
However, if a trader is determined to mine on his own, then Application-Specific Integrated Circuit (ASIC) devices are the best bet because they come integrated with pre-installed mining software. They also require little to no configuration.
Litecoin ATMs
Litecoin ATMs seem to be in great demand lately. Few months ago, there were news reports of litecoin ATMs proliferating around the globe. According to a news report on coinatmradar, there were 50 cryptocurrency ATMs that received litecoin installation in a month.
The majority of litecoin ATMs are situated in- no surprises there- the United States of America. Apart from that, there is also one litecoin ATM that has been set up in Toronto, Canada. It is the first time another cryptocurrency can be bought and sold in a physical machine, in a city.
Buy Litecoin versus Trade Litecoin
It is not brand new information, that litecoin is growing by leaps and bounds. If a trader wishes to buy litecoin under $50, then, no time like the present to go and invest in it. However, buying litecoin and trading litecoin are both advantageous for traders. Before buying or investing in LTC, traders must understand the pros and cons with both and then go ahead.
To trade, one needs to be sure that the price of litecoin will rise. If it increases, the trader can exchange the litecoin back into dollars or equivalent currency.
The trader will not be able to store litecoins with a stock broker. They will also need a digital wallet to store their litecoins.
Tips on Buying Litecoins Online
Litecoin is often described as silver to Bitcoin’s gold. At the time of writing, It is the sixth largest cryptocurrency by market cap. Apart from buying it on exchanges, traders can also buy it through contracts for difference (CFD), through fiat, etc. The cryptocurrency can also be bought through the means of credit cards, debit cards, PayPal or wire transfers.
Most exchanges prefer these form of payment methods as this helps them to establish that the customer is legitimate. However, the person buying litecoin online should also be cautious.
There are a great many websites out there that declare they are the best deal a user can get, with unbeatable prices, minimal fees, and fastest transactions. It is always advisable to read up on reviews posted by other customers or traders to know how accurate the claims are.
Conclusion
With Bitcoin, reaching a temporary stagnant phase, other forms of cryptocurrencies are jumping in the fray. Litecoin as purely a form of cryptocurrency was introduced to address the gaping flaws in Bitcoin. Lately, people are also taking note of this cryptocurrency.
