When Bitcoin became available for trade in 2009, it solved multiple problems in the traditional monetary system and heralded the creation of several other online currencies known as altcoins. One of the earliest known altcoins is Litecoin, which was created to complement Bitcoin rather than compete with it as many cryptocurrencies attempted to do. As the creator of Litecoin, Charlie Lee once said ‘Litecoin is the silver to Bitcoin’s gold.’
History of Litecoin: How it came to be
Created in 2011, Litecoin became one of the first altcoins to emerge in the digital currency sphere. It was made to complement Bitcoin’s natural utility and serve in the areas where Bitcoin is lacking such as accessibility and a faster transaction process.
As the first cryptocurrency, Bitcoin’s code has been repurposed by several altcoins to suit their features. However, Lee created Litecoin with almost the same program and code as Bitcoin. There were only a few added features to fill in the gaps that Bitcoin lacked including speed, block size and transaction fees.
Lee explained that the rationale for making the two currencies so similar was because he didn’t want to risk changing the code structure since he believes that every code is there for a reason and only needs to be improved on.
Litecoin: How does it work?
Before you can understand how Litecoin works, you must first know its underlying technology, which is blockchain. This open, distributed ledger records every cryptocurrency transaction and stores the data in a block that is then strung to another block, creating a chain of information. This makes it impossible for cybercriminals to tamper with the data.
Unlike traditional transactions with banks, Litecoin and other cryptocurrencies keep the user’s information safe through encryptions using an e-wallet. Since personal information aside from the public address in your wallet isn’t required, every transaction using Litecoin is considered pseudonymous.
Moreover, just like other currencies, Litecoin is also mined by solving complex mathematical equations. In every sense of the word, Litecoin works just like every other cryptocurrency modelled after Bitcoin.
Litecoin: Finding solutions to your problems
Despite Bitcoin’s revolutionary aspects, game-changing features and status as the first cryptocurrency, it still lacks in some areas, especially in speed. Processing a transaction with Bitcoin can take a long time. Considering that it is a highly volatile currency, the price might have changed by the time the transaction goes through.
This is where Litecoin comes in. Instead of having a 10 minute block time just like Bitcoin, Litecoin is 4x faster and processes transactions within 2.5 minutes. This kind of speed narrows the room for volatility and sudden price changes.
Crypto made better: Advantages of using Litecoin
If you’re thinking of adding Litecoin as part of your portfolio, here are a few advantages that might just convince you:
Litecoin has been using an upgraded transaction format called the Segregated Witness process ever since 2017. What this format does is speed up the processing of transactions by separating the information into two sections.
As a result, fewer data need to be included in a block, allowing more transactions to be validated at once. It is more the preferable option for people out there who want fast transactions.
A cheaper alternative
As opposed to Bitcoin’s $2 per transaction, Litecoin only requires you to pay around 20 cents for a fast and easy process. With this rate, you can resort to using Litecoins for your menial transactions and save your Bitcoin for bigger investments.
Litecoin has been gaining popularity all over the crypto sphere ever since it was introduced. With this popularity, more and more companies recognize the value of Litecoin and accept it as payment for online transactions. As of writing, it is ranked 14 in the crypto market.
To acquire Litecoin, you can purchase it on reliable exchange platforms such as Binance and Gemini. You can also use Litecoin to purchase products from CheapAir and Cryptopet.
It uses a simple algorithm
Unlike other cryptocurrencies that use a highly complex algorithm, Litecoin operates on a simple algorithm called Scrypt, making it easier for miners to solve the mathematical problem and process the transaction. Aside from that, Litecoin’s simple algorithm also allows miners to process it on a simple computer. This opens opportunities for users to participate in the mining process without burning a hole in their pockets for expensive mining equipment.
How to invest, trade, buy and store your Litecoin
Trade your Litecoin with CFD
Trade your Litecoin (LTC) by purchasing Contracts for Difference (CFD) where you can wager on the performance of your coin in a select period. What this means is that when you participate in a CFD, you must predict if a specific coin will rise or fall in terms of value. If you predict correctly, you will receive the amount previously agreed on, if you lose you must pay the other person involved in the contract.
Buy low and sell high
The smartest way to invest in Litecoin is by purchasing it when its price is low and waiting for the price to hike up in the market. Keep track of the movement in the cryptocurrency market by visiting various sites and exchange platforms.
Storing your Litecoin with e-wallets
Before you can start using your Litecoin, you must first have an electronic crypto wallet to store your tokens. The most compatible wallets for Litecoins are Ledger Nano S, Trezor T and Electrum LTC. Once you are done picking your preferred wallet, you can start purchasing tokens on different exchange platforms.
Where to buy Litecoin
You can buy Litecoin on almost every exchange platform available. This includes Binance, Kraken, BitPanda, Coinbase and Coinmama. Simply choose the platform that works best with your needs and process your transactions there.
Litecoin: Is it the right investment for you?
As one of the first altcoins, Litecoin has become a reputable token for cryptocurrency traders. Moreover, the altcoin’s affordability and stability make it an ideal investment for beginners who don’t want too much of a risk. Plus, with PayPal adopting Litecoin onto their platform in 2020, investors have a lot to look forward to in 2021!
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