How to buy Litecoin, and where to buy Litecoin, can be answered in a few seconds or over days. We’ll give you the lowdown on the overview of this innovative cryptocurrency, and tips on how to get invested.
It may not be enough to scan a list of online brokers with steps to “buy Litecoin.” Equally, you may not be looking for a course in blockchain engineering for a simple transaction. To ensure your trades are not blind stabs in the dark, your best bet is to gain some understanding of Litecoin, how it works, how it differs, where it is heading and some market analysis techniques.
Litecoin was founded in 2011, two years after Bitcoin. Technically, it is extremely similar to Bitcoin, and it is an unofficial Bitcoin “fork”. Any change in a blockchain’s protocol can be considered a “fork” but sometimes, when the community cannot agree on a path forward, a cryptocurrency splits into two distinct coins. Bitcoin has a number of these, such as Bitcoin Cash and Bitcoin Gold. Litecoin, however, was not born from a disagreement amongst Bitcoin users. Instead, most of the blockchain technology was copied, with some key differences, and then joined the market under the direction of its founder, Charlie Lee.
Charlie Lee is a computer scientist and former Google employee who wanted to improve on what he perceived as Bitcoin’s flaws. One such improvement was increasing the speed of transactions on the blockchain by four times. Litecoin also has four times the number of coins (84 million), compared to Bitcoin (21 million). This creates a higher profit margin and less competition for miners. A new “Scrypt” algorithm was introduced which makes processing transactions more efficient (and less energy exhaustive). This has become more important as environmental concerns from mining have grown. The final big improvement is cost. The average transfer fee with Litecoin is currently $0.022 versus $7.25 for Bitcoin. Although prices fluctuate, Litecoin is always significantly cheaper.
If Litecoin is so much better than Bitcoin, then why doesn’t everybody jump ship? Firstly, Bitcoin does have some technical advantages over Litecoin. Its multi-signature authorization for businesses gives it increased security. The “Lightning Network” allows BTC to be used to perform everyday transactions such as buying food and drink. The biggest plus point about Bitcoin, however, is it was the first cryptocurrency on the market, offering the first alternative to the traditional fiat system of banking. It has managed to build brand recognition, an advanced ecosystem, liquidity, real-world uptake among retailers, and a dedicated following. For many, Bitcoin has become a symbol of resistance and revolution which may be powerful enough to overlook any comparative shortcomings.
Litecoin’s value lies in its technology. You wouldn’t buy a car without taking a look under the hood, and it is advisable to do the same before purchasing any cryptocurrency. If you understand how Bitcoin works, then it is only a small step to learning about Litecoin as well. As mentioned above, Litecoin is essentially a Bitcoin fork and so much of its code is the same. Like Bitcoin, it operates using a proof-of-work consensus mechanism to maintain its decentralized blockchain. This means all of its transactions are recorded on a “shared ledger” (as opposed to being stored on a central server, as it is in the traditional banking sector).
Litecoin’s mining protocol is also very similar to Bitcoin. Transfers are validated by miners (which anyone can do) who work together to create new “blocks” (data sets) to be added to the overall blockchain. They are rewarded with a set number of Litecoin (currently 12.5 LTC) which is halved every 3 years to prevent oversupply. Litecoin made a few changes to its mining algorithm. One was to make it harder to use mining equipment such as ASICs to make profits and control of the network evenly distributed among all its users, as Bitcoin had also intended but failed to do. Unfortunately, users quickly found new ways to perform largescale mining operations. The new mining algorithm did, however, enable new blocks to be created every 2.5 minutes, as opposed to every 10 minutes with Bitcoin.
There is no doubt Litecoin currently stands in the shadow of Bitcoin. Bitcoin is often referred to as “digital gold” and Litecoin has gained the title of “digital silver”. The technology and even philosophy behind the two coins is very closely aligned, after all, Litecoin was intended to plug a few holes in Bitcoin’s code. As a result, the rises and falls of Litecoin’s price are closely linked to Bitcoin. That isn’t unusual in the cryptocurrency market, however. Most coins track, to varying degrees, Bitcoin’s performance. It is easier to look for exceptions than proofs of this rule. XRP, for example, is known as one of the few cryptocurrencies which can resist Bitcoin’s movements (to a certain extent).
While Litecoin has always been an altcoin in its truest sense, that is not to say this pattern will continue. There is a lot of uncertainty in the cryptocurrency market, partly because it is such a new marketplace. Bitcoin may well go under and, while there are many vying for Bitcoin’s spot, Litecoin is a real contender. Even if it doesn’t wholly replace Bitcoin, it may still grow in value and uptake over the coming years. Bitcoin is under a lot of pressure from environmentalists about the effects of its mining (allegedly consuming as much energy as Argentina or the Netherlands), and Litecoin is certainly a greener alternative. Although long-term predictions are difficult to make, most pundits are optimistic about Litecoin and believe its price will rise to around $1000 over the next five years.
Predicting The Price
If you are serious about buying Litecoin, you will need to learn some techniques for predicting its future prices. With so many differing price analyses on the internet (some with vested interests), it’s important to be able to confirm what you read with what you can see yourself. The main way in which traders form their short and medium-term view on a cryptocurrency is by using chart indicators. Chart indicators come in lots of different shapes and sizes, but they all work by elucidating one or a few traits of an asset’s price pattern. Bollinger Band, for example, is a great way to see volatility, Moving Average Convergence Divergence (MACD) is often used to spot trends, and so on. Using just a few indicators can help to inform your trades.
How Do You Buy Litecoin?
The easiest way to invest in Litecoin is simply to buy its coin, LTC. You can do this at a number of exchanges and trading platforms. Most platforms will allow you to store your LTC on your trading account, although the safest option is to keep your LTC in an offline wallet. This means downloading a wallet, transferring your LTC into it and then storing it, either in an external hard drive or a USB stick. Alternatively, some online brokers will allow you to place derivative trades on Litecoin. This means you are not purchasing the underlying asset itself but making a contract with your broker relative to it. Futures and options contracts are two popular hedging techniques that work in this way, as a means of inhibiting potential losses. CFDs (“contract for differences”) is another derivative market that enables the investor to leverage more money on their trade to gain greater profits.
We believe the best place to buy Litecoin is from our online trading platform, “TradeOr”. TradeOr has built a fantastic reputation and is rapidly growing in popularity. The reasons for this are simple. Our rates are highly competitive, we have state-of-the-art features and functionality, including many market analysis tools. We offer trading across a broad range of markets, including the stock market, commodities, indices, forex and cryptocurrency. Our customer service team not only help with technical and account queries, but we also have an expert team at hand that can advise you on which companies to invest your money in.
Before you buy Litecoin, or any other cryptocurrency, it’s worth spending a bit of time learning about it and how to predict its price going forward. From the outside, the market can seem a bit like roulette, but a bit of knowledge really can help to swing the odds in your favour. The next step is “how to buy Litecoin”. There are several options available to you. The simplest way is to buy the underlying asset (LTC) outright.
We highly recommend our platform, TradeOr. We have the technology to enable you to trade more-or-less as you want and on what you want.