Pros of Litecoin
- Supply is four times larger than Bitcoin
- Faster transaction confirmation times than Bitcoin
- Strong industry support
Cons of Litecoin
- Reputation suffered when founder sold his holding
History – The beginning of Litecoin
Former Google employee Charlie Lee released Litecoin via an open-source client on GitHub in October 2011. He developed a strong interest in Bitcoin during his time at Google, and he used it for inspiration while writing the Litecoin blockchain technology in his spare time. Lee stated that he never intended Litecoin to be a direct competitor to Bitcoin. It is instead designed to be used for smaller transactions.
Lee mined just 150 coins before releasing Litecoin to the public on October 13, 2011. It is considered a source code fork of the Bitcoin Core client, and thus a spinoff of Bitcoin. Litecoin grew steadily in the ensuing years, and actually shot up by 100% in value during a 24-hour period in November 2013. By May 2017, it was firmly established as a top five cryptocurrency by market cap and it became the first major coin to adopt SegWit
Lee had left Google and started to work for Coinbase, one of the world’s leading cryptocurrency exchanges, by that point. In December 2017, he announced on Reddit that he had sold almost all of his Litecoin holdings due to a perceived conflict of interest. He has since been criticized for this revelation, which caused Litecoin’s value to plummet.
By December 15, 2017, one Litecoin was worth more than $300, but within a couple of months it had halved. It failed to return to those heights in the subsequent years, and it was valued below $100 for the majority of 2019 and 2020, but it started to climb again during the bull run of late 2020 and early 2021.
Development – How Litecoin was developed
Lee developed Litecoin to make digital transactions quicker and more efficient. The network is designed to process a block every 2.5 minutes, rather than Bitcoin’s average of around 10 minutes. It can therefore confirm transactions much faster.
Litecoin uses a different hashing algorithm than Bitcoin – scrypt as opposed to SHA-256. Scrypt is a password-based key derivation function that is used in Litecoin’s proof-of-work algorithm. It also has a supply limit of 84 million coins, which is four times higher than Bitcoin and Bitcoin Cash. That could help it eventually achieve greater scalability.
In the early days, Litecoin was used in a similar fashion to Bitcoin for extended payment patterns. However, there is no longer much correlation between the two. In August 2020, the Litecoin development team announced an upgrade, which featured a privacy protocol known as Miblewimble. This is designed to protect the identities of senders and receivers, while bolstering the blockchain’s ability to handle a larger number of transactions. Daily confirmed transactions doubled over the course of 2020, and the network’s processing speed also improved.
Statistics – Everything you need to know about Litecoin trading
Litecoin currently offers miners a block reward of 12.5 LTC. That will remain the case until around August 2023, when the next halving is due to take place. The circulating supply had gone past the 66 million mark by January 2021. As previously mentioned in this Litecoin trading guide, the total supply is 84 million, which is double the total supply of Bitcoin and Bitcoin Cash combined.
Anyone that wants to buy Litecoin or get involved in Litecoin trading can find up-to-the-minute statistics at the best Litecoin trading exchanges. They will tell you the current price, the net change, the 24-hour high and low, the all-time high (currently $360.66, set in December 2017), the total supply returns, transaction count, 30-day volatility rate, average transaction fee and 24-hour value transacted.
Security, Features and Uses – Is it safe to buy Litecoin?
Litecoin has frequently been described as the silver to Bitcoin’s gold. Many people like to buy Litecoin, because they feel it represents a significant upgrade on Bitcoin. Transaction times are faster, the level of supply is four times larger and scalability is less of a concern. However, Bitcoin’s market cap is around 70 times larger than Litecoin’s, so it has a long way to go before it can match Bitcoin in the popularity stakes.
Litecoin has a few key differences that set it apart from Bitcoin, but it is very similar overall. It is a decentralized cryptocurrency designed to allow peer-to-peer transactions online, without the need for a middleman. It is created via mining, it has a finite supply, it requires storage in a wallet, it has a proof of work ecosystem, and its price has been volatile over the years.
Some people buy Litecoin and hold it as an asset, while others conduct Litecoin trading in a bid to make a short-term profit, but it is really designed as a payment method. It allows people to send money to one another in a quick, safe and secure fashion, with minimal costs, but it also has numerous real world uses. You can buy Litecoin and use it to purchase food, beverages, real estate, pet supplies and vacations, among many other goods and services. Several casinos and sportsbooks also accept Litecoin.
Litecoin transactions are designed to be totally secure, as they go directly from one wallet to another. However, you should ideally buy Litecoin and keep it in a cold, offline wallet, away from hackers, if you plan on holding it for a considerable period of time. Beware Litecoin trading scams and only buy crypto online at reputable sites. There have not been many high-profile security breaches featuring Litecoin, although 10,000 LTC worth $230,000 were stolen from a mining pool back in 2014.
How to Trade – Buying and trading Litecoin
Anyone that wants to get involved in Litecoin trading must identify a high-quality crypto exchange. There are some key factors to consider before you buy Litecoin. It should be a safe, secure, reputable site that has a large user base, an established presence in the market and no recent security breaches. You should ideally buy Litecoin at a site that offers good customer service, provides a strong user experience and charges low trading and withdrawal fees. It is hard to tick all three of those boxes, but work out what is most important to you, read Litecoin trading reviews and find your perfect match.
Coinbase is a popular site among American crypto investors. It allows you to buy Litecoin, buy Bitcoin, buy Ethereum and buy several other cryptocurrencies. The user interface is excellent – very clear and easy to use – and withdrawal fees are not too high. Trading fees are higher than some rivals, customer service can be challenging and other sites offer more advanced charting, but Coinbase is arguably the best all-rounder.
Binance is another strong alternative. It offers lower trading fees, and you can buy Binance Coin in order to benefit from a further discount. Binance covers a broad range of cryptocurrencies, so you can enjoy Bitcoin Cash trading, XRP trading and trading of many more coins, and the charting is more advanced, but some of the withdrawal fees can be high. CEX.io is another option.
Once you have chosen the best place to buy crypto currency online, you can set up an account. If you opt for Coinbase, click the blue “Get Started” box at the top right of the homepage. Enter your name and email address, choose a strong password, certify your age, agree to the terms and conditions, and click “Create account”. You will need to verify your identification by uploading a copy of a driver’s license or other official ID card, provide proof of address and verify your email and phone number.
That process is similar at most crypto trading sites. Once that is completed, you can buy Litecoin and take part in Litecoin trading. Click on the blue “Buy / Sell” button to trigger the trading box, which will automatically be set to “Buy”. It defaults to Bitcoin, so click the right arrow and change it to buy Litecoin. Enter the amount you wish to buy and enter your payment method. Most Americans that buy Litecoin would opt for a credit card.
You can then click “Preview Buy” and a new window will tell you the price, the trading fee and the total purchase amount you will receive. Click “Buy now” to confirm the transaction. It should appear in your account within a minute or so, and you can then transfer it to a safe wallet by clicking “Send / Receive”. You can also set up a recurring payment.
If you want to get involved in Litecoin trading, you can switch from “Buy” to “Sell” in the trading box. Enter the amount you wish to sell and the payment method you want to deposit to, and click “Sell Litecoin”. Alternatively, you can buy Litecoin and convert it to Bitcoin, Ethereum or various other cryptocurrencies.
Future Outlook – What does the future hold for Litecoin?
The internet is awash with gurus that will offer a Litecoin price prediction based on historical data or their understanding of the sector. It is very difficult to gauge, as there are so many macro and micro factors affecting the price of Litecoin and other cryptocurrencies, so any Litecoin prediction should be treated with a degree of skepticism.
Yet many people that missed out on buying Bitcoin when it cost a few hundred bucks are now seriously looking at Litecoin and wondering how the Litecoin price will progress. It is worth noting that Litecoin has enjoyed a pretty impressive performance recently, with large gains towards the end of 2020.
Volatility is always a concern, as LTC still has a tendency to tumble by more than 10% in a 24-hour period, but many analysts remain bullish about Litecoin’s future prospects. Some pour scorn upon it, writing it off as a mere testing ground for Bitcoin and arguing that it will fade away, while others believe it will remain flat.
The number of Litecoin uses should rise in the future, which will be positive. More and more retailers are incorporating it into their payment systems. However, you should note that there are now a number of altcoins competing for attention, and some will fall by the wayside. Litecoin is certainly a risky investment, but if you want to use it for online payments then it works very well.
Reputation and Customer Feedback – General thoughts on Litecoin trading
Litecoin’s reputation took a battering when Lee announced that he had sold most of his LTC in 2017. Some say it has never recovered, and they can point to its price to back up their claims. Yet it has been around for a lot longer than most altcoins, and it is still going strong thanks to a dedicated core of enthusiasts.
LTC also has a reputation for innovation. It regularly adds new features and it has quickly integrated retail payment apps such as SPEDN. That leads some to call it a testnet for Bitcoin, but there is nothing wrong with pushing boundaries and trying new things. Overall, Litecoin has a pretty good reputation, and most people that use it for online transactions report high levels of satisfaction.
Conclusion – Interested in Litecoin trading?
While not as popular as Bitcoin trading, Litecoin is still a popular cryptocurrency among people that want to conduct fast, safe, cheap peer-to-peer transactions online. Some also see it as an interesting investment opportunity after missing out on the chance to buy Bitcoin when it commanded a low price. If you want to buy Litecoin, you must find a reputable site that will not rip you off with high fees or try to scam you. Stick to the large, popular exchanges that have a strong security record and do not charge extortionate fees for trading and withdrawals, and demand transparency, a high level of service and a strong interface. Once you’ve bought your Litecoin, be sure to move it into a crypto wallet unless you’re planning on trading right away.