Widely regarded as one of Bitcoin’s most legitimate and worthwhile descendants, Litecoin addresses some of its forerunner’s issues and stands a solid chance of emerging as a genuine altcoin contender.
Compare where to buy Litecoin, and open an account
Read on to find out more about Litecoin and how it works or skip ahead to our step-by-step buyers guide if you’re up to speed and ready to buy Litecoin.
What is Litecoin?
To a large extent Litecoin is built in the image of Bitcoin, the original cryptocurrency.
As is so often the case with expertly engineered tribute acts, it receives far less attention than the original, despite being demonstrably superior in a number of significant ways. While the creation and transfer of Litecoins is essentially identical to Bitcoin’s open source, decentralised protocol, it is actually far quicker and cheaper.
How does Litecoin work?
Created in 2011 by Charles Lee, former Engineering Director of Coinbase, Litecoin follows many of the Bitcoin’s precedents. In fact, it was developed as a fork of the Bitcoin core client and uses a blockchain to maintain a decentralised public ledger of transactions in much the same way. If you know Bitcoin, you know Litecoin.
Litecoin’s value can be inferred from its name – it was developed to deliver a lighter (read faster and cheaper) version of Bitcoin, an objective it achieves quite emphatically:
- Each Litecoin block is 4 times faster to confirm than a Bitcoin block (2.5 minutes compared to 10 minutes)
- Litecoin can process 56 transactions per second compared to Bitcoin’s maximum of just 7!
- Litecoin’s script algorithm makes it far cheaper to mine than Bitcoin.
How to buy Litecoin online – step-by-step guide
Step 1. Get a suitable wallet before you buy Litecoin
Before you go and buy Litecoin, you will need to find a suitable wallet to store LTC. We don’t recommend storing your Litecoin on an exchange for too long – it’s always safer to use a hardware or software wallet. Happily, Litecoin’s relative ubiquity means there are plenty of compatible wallets to choose from, including:
- Ledger Wallet: Ledger is a hardware wallet, which means you can store your Litecoin (along with 30 other currencies) offline on a super-secure wireless device.
- Exodus Wallet: A popular desktop wallet that supports a multitude of currencies, including Litecoin. With its slick interphase, Exodus offers an impressive balance of security and ease of use and, best of all, it’s free.
- Trezor T Wallet: The latest iteration of the acclaimed Trezor hardware wallet from SatoshiLabs. The Trezor T builds on the brand’s reputation for exceptional security with a wealth of additional functionality and a snazzy colour LED screen.
Step 2. Find an exchange to buy Litecoin
Some cryptocurrencies such as Golem, Gnosis, and many more are hard to track down, not so Litecoin, which is popular enough to be available at most exchanges. Here’s our pick of the most dependable:
- Coinmama: A well-established exchange with a solid reputation for trustworthiness, Coinmama is available in 188 countries and allows you to buy Litecoin securely using a credit or debit card. Convenience and security does come with fairly high transaction fees, however.
- Coinbase: The most popular crypto exchange on the internet, Coinbase enables the instant purchase of Litecoin via most Visa and MasterCard credit and debit cards, charging a standard fee of 3.99% Coinbase now serves over 100 countries, including the UK.
Step 3. Withdraw your Litecoin
Secure your Litecoin by moving it out of the exchange and into your wallet as soon as you’re done buying LTC. To withdraw your Litecoin to your wallet you simply need to generate an address then paste it the relevant field in your exchange account.
How to trade Litecoin – step-by-step guide
Trading Litecoin might appeal if you don’t fancy the hassle of owning and storing the currency but do recognise its potential to return a profit. Trading is typically a short-term endeavour designed to exploit fluctuations in the market so you don’t necessarily have to worry about the long-term prospects of Litecoin.
Because Litecoin is a relatively well-established cryptocurrency it’s widely available to trade on popular cryptocurrency trading platforms.
Step 1. Find a broker
There are plenty of cryptocurrency trading platforms to choose from, most of which offer Litecoin, so your first task is to choose one that suits your needs. Plus500 and eToro are two of the most popular Litecoin trading platforms.
Step 2. Deposit money
Most trading platforms will allow you to deposit Fiat money (USD, GBP, EUR etc.). It’s worth noting that trading platforms offer leveraged trading, which means you don’t have to put down the full value of a trade. Instead you can pay a deposit, known as a ‘margin’. This means you can potentially make bigger profits and, of course, bigger losses.
Step 3. Decide how you’d like to trade
There are two cryptocurrency trading methods: CFDs (contracts For difference) and Spread Betting. Both methods essentially entail speculating on the price movements of your chosen currency. If you aren’t sure which option to go for we recommend researching the differences between spreads and CFDs.
Step 4. Start trading
If you’re a complete novice we recommend starting with a demo account and familiarising yourself with the process and the platform. Cryptocurrency trading is extremely volatile, which means you can make and lose money very quickly. Litecoin is prone to fluctuation, which makes it an intriguing prospect for traders who look to exploit volatility.
As a Litecoin trader you’re speculating on the currency’s price movements by taking a short (sell) or long (buy) position. If you think Litecoin will fall in value you should take a short position, if you think it will rise in value you should take a long position.
Still undecided?
- Litecoin is open source and therefore highly flexible, which stands it in good stead to respond to the market’s changing demands
- Litecoin improves on Bitcoin in numerous ways – it’s faster, cheaper and more scalable
- Litecoin has a higher limit of coins than Bitcoin (84 million to 21 million)
- Volatility makes it an appealing prospect for day traders
- Litecoin’s original USP – that it improves Bitcoin’s model in a variety of significant ways – may become less valuable now that Bitcoin has addressed scalability issues by adopting SegWit improvements
- As a fork of Bitcoin, Litecoin lacks the novelty and innovation that make some altcoins so appealing
