What is Litecoin?
In an analogous way, Litecoin is the silver to Bitcoin’s gold. The big player in the new and booming world of Cryptocurrency is Bitcoin, and from that, many other digital currencies, or Altcoins were born. Litecoin is one of these coins, but most importantly, it is one of the more successful coins that is giving Bitcoin a run for its money.
Walkthrough Video that Explains How to Buy Litecoin Online
As with all digital currencies and altcoins, as offshoots of Bitcoin, they are defined in a similar light. Litecoin is a peer-to-peer cryptocurrency with an open source code. Again, it is decentralised just like Bitcoin and also mined, but in a different way. But the biggest and most important difference between Litecoin and its predecessor Bitcoin is that it has adopted Segregated Witnesses, as well as the lightning network.
These difference are seen as improvements on Bitcoin as they are aimed at circumventing slowed and expenses transactions once the memepool is loaded and the blocks are filled. In fact, there are almost zero fees involved in Litecoin transactions and they can operate up to four times quicker.
How is Litecoin Mined?
Litecoin’s mining method differs fundamentally from Bitcoin’s as well, as it uses the s-crypt algorithm rather than SHA-256 hashing. What this essentially means is that mining a block of Litecoin is also much quicker and less intensive, coming in at about 2.5 minutes to fully mine a block. There is also less of a race that would be pushing up the mining difficulty because there is no ASIC technology on Litecoin - yet.
Thus, Litecoin has taken a few of the issues that Bitcoin faced and tried to fix them through changes to the software. The use of a different mining method means that Litecoin is basically sitting back where Bitcoin used to be about four years ago in terms of difficulty and accessibility. Moreso, the transaction issues that have dogged Bitcoin recently have been addressed meaning that the Litecoin network can handle far more transaction volume and at a greater speed.
This, however, does come with its own problems as the speed and size of the blocks leads to higher chances of orphaned blocks and even instances of double spending.
Should I Buy or Trade Litecoin?
If one was to define the current digital coins available, Bitcoin would be seen as the father of them all, but Litecoin would certainly be one of the favoured sons. There are plenty of worthless, and useless coins out there that are trying to jump into a market that is booming, but they are watering it down predominantly.
Litecoin is not one of these money-making ICO scams, rather it is a coin that was designed to address a few of Bitcoin’s issues and therefore it has value. It is also a valuable technology as its lightening network has many other uses in business.
The value of Litecoin is that it has functionality built into its blockchain network that makes it a useful piece of software, and on top of that, it has a good footing in the digital currency market as it sits in the top five of all digital coins with a market cap of over $2 bln to date.
Litecoin has been a consistent competitor and alternative to Bitcoin for going on five years and has gone from strength to strength. It is also a coin that currently has a low cost per coin - under $50 - and as such has a lot of scope to grow if Bitcoin is to be the believed trend setter.
An investment in Litecoin is a solid one as it has room to grow and a steady technological base upon which to grow from. It has also addressed some of the latest issues Bitcoin is facing and is looking like a future leader.
How to Buy Litecoin Online - Step-by-Step Guide
Buying Litecoin has been made especially simple thanks to one of the biggest digital exchanges, Coinbase, making it available on their platform. Essentially, buying digital currencies, like Litecoin, only takes you signing up to a website, linking your bank account, and then making the purchase of the coin with available funds - either instantly, or through the exchange.
- Visit Coinbase and sign up by providing basic detail.
- It is not a requirement, but a highly recommended additional step to enable two-step verification. This provides extra security as it requires a secondary password to be imputed when logging in that can only be found on your mobile device.
- Once your account is set up and secure, it is time to buy your Litecoin. This requires you to add a payment method to your Coinbase account. There are three methods, namely linking your bank account, credit card, or debit card. For this guide, we will continue explaining how to buy when linking your bank account.
- It can take some time to get verified on Coinbase as the regulations state that, depending on the amount of money you are using, you need to provide different documentation, from identification and utility bills to proof of residence.
- Once verified Coinbase will allow you to make a bank deposit into your own personal wallet. Again, there can be delays with a bank transfer, just as you would expect in any other situation where money is deposited from a bank to a vendor.
How to Buy Litecoin with Credit Card
When going through the process of signing up to Coinbase, and linking a bank account to fund your wallet in order to buy Litecoin, an option of buying with a credit card would have popped up. This is a possibility, and often a preferred option, for buying Litecoin, depending on circumstances.
The process is very similar to that of buying with a bank deposit, except when it comes time to selecting a payment method, credit card should be selected. From there another form of verification takes place where, in a similar vein as PayPal, a small fee will be charged and you will need to verify that amount so that the card can be confirmed as yours.
Credit card purchases are quicker and do not have the same waiting periods, but they come with high fees and low transaction amounts. Due to the legacy payment system, you will be charged a fee for purchasing Litecoin just as if you were making an instant purchase.
How to Buy Litecoin with PayPal
There is another method in which to use Litecoin, on a platform like Coinbase, but it is only available to residents of the USA, it is also only useful for selling the currency. Coinbase will allow you to link your PayPal account to its platform, as a US resident, but it will only allow you to sell Litecoin or withdraw, into PayPal.
Thus, if you have Litecoin and decide to sell it, instead of withdrawing the profits into your bank account, you can specify that funds are sent to your PayPal address instead.
For this to happen you will first have to verify your ID with Coinbase. Then PayPal will need to be manually added as a payment method via the payment method page. Next, verification will be required so that Coinbase can access your PayPal account.
How to Trade Litecoin
Because of Litecoin’s high demand, impressive market cap, and valuable software that has enacted future-proof changes, it a valuable commodity that is easily and freely traded on a number of platforms.
One of the more popular trading platforms is AVATRADE. It is a simple and quick process that gets you into Litecoin trading with minimal fuss.
- Firstly, go to the website, www.avatrade.com and sign up. You have the option of signing up via Facebook or Google+ if you would prefer, to make things quicker.
- From there, the site will require a little more personal information, such as date of birth, and you will also make your choice of trading platform. You will also be asked about the amount of trading experience you have so that the site can gauge what support is needed.
- There are a number of different trading platforms to choose from such as MetaTrader 4 AvaTrade and Floating Spreads. In this instance, you will be trading with Litecoin, so a good choice of platform would be Floating Spread Account with MetaTrader 4.
- AvaTrade will then ask for a little more personal information that will go into your profile. Once that is complete it is time to fund your account and start buying Litecoin.
- Start by clicking “Deposit Now” to enter details about making a direct deposit to Avatrade that can be used to buy Litecoin. Once there is money in your trading account, you can now begin trading Litecoin by clicking on ‘Web Trading’.
- From here you will be met with a webtrading platform that lists all the cryptocurrencies down the left-hand side. Begin your trading through this platform with your available funds.
Future of Litecoin Trading
There are a lot of questions asked about digital currencies and their future. Do they have a future? Can they continue to exist? Or even more importantly, can they continue to grow? Will trading in these cryptocurrencies last and will it continue to be viable?
To answer all these questions, it is important to delve deep into what cryptocurrency actually is and how it came about, because for a lot of them, the currency, or coins, are actually a by product of Blockchain technology. The strength of Blockchain technology has been identified and its value has almost essentially quantified in the value of certain tokens.
A digital currency, like Bitcoin as the original, has rocketed in value because of the Blockchain network it is built on. Bitcoin hit $3000 at its high point, and for others, such as Litecoin, that is almost seen as the benchmark currently, but what will define this is how effective the technology is, and how it is adopted.
So what is Blockchain technology? In a basic sense it is a public, un-hackable ledger of transactions that are filled out on blocks that are linked together in a chain once they are filled. The great thing about this technology is that no one controls it. The code is opensource, and available for all, if there are to be changes made to the program, it requires a democratic vote where every person who is mining has a chance of influencing the changes. Blockchain is successful when the majority uses a certain version, thus no one person can have a say on which version is used.
So, it is decentralised and available for all, but what does it do and how does it spell a future? Blockchain can keep a record of every transaction that has ever occurred with a digital currency, and it does this on things called blocks. When a new block is mined, a certain amount of Litecoin, in this instance, is given to the miner for his efforts, and then transactions are filled in on the ledger, keeping a public, non-editable list of transactions.
This is how digital currency is created, and that, of course, has spawned its own huge and important market, but the true value is in the strength of the blockchain technology.
What makes Litecoin so special
Litecoin may not be nearly worth as much as Bitcoin, but there is the feeling that it has the potential to grow exponentially as it has already addressed some of the issues that are at present stifling Bitcoin's growth.
Cryptocurrency was meant to be a quick method of payment with little to no fees, but because of the huge intake of new members, Bitcoin’s transaction have slowed significantly, almost making it infeasible to use as a payment service. That in turn has also forced the fees up to a point where they are even more than PayPal and Visa, essentially making Bitcoin less useful as a valuable cross border payment system.
Litecoin has addressed these issues, and although they are still in the teething phase in seeing what these fixes will lead to, it is a forward thinking coin with a lot of potential.
Enjoyed this Litecoin guide? Then see our other cryptocurrency guides:
- How to buy and trade Bitcoin
- How to buy and trade Dash
- How to buy and trade Dogecoin
- How to buy and trade Ethereum
- How to buy and trade Golem
- How to buy and trade Litecoin
- How to buy and trade Monero
- How to buy and trade NEM
- How to buy and trade NEO
- How to buy and trade Peercoin
- How to buy and trade Potcoin
- How to buy and trade Ripple
- How to buy and trade Stratis
- How to buy and trade Tezos
- How to buy and trade Waves
- How to buy and trade Zcash