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Guide to the Cryptocurrency Litecoin: Buy & Trade Now!

Top Tips and Insight into the Cryptocurrency Litecoin

What is Litecoin?

If Bitcoin is gold, then Litecoin would be silver. Bitcoin is the first and currently the leading light in the crypto world. From Bitcoin, we began to see lots of altcoins (alternative cryptocurrencies to Bitcoin) being produced. Many of these coins dwindled away and could not compete with the might of Bitcoin, Litecoin however was not one of these. It is one of the most successful coins behind Bitcoin and continues to give Bitcoin a run for its money.

Due to Bitcoin being the first cryptocurrency, all the spawns from it are automatically going to defined in a similar light. Litecoin is no different and is a peer-to-peer cryptocurrency with an open source code, which is decentralised just like Bitcoin is. You also mine for Litecoin coins, however this process does differ from bitcoin.

The biggest and most important difference between Litecoin and Bitcoin is that it has adopted segregated witnesses and it uses the lightning network.

'What does that mean,' you may ask. These are seen to be improvements on Bitcoin as they aim to circumvent slow and expensive transactions once the memepool is loaded and the blocks are filled. With Litecoin transactions, there are almost zero fees involved and they operate up to four times quicker.

How to Buy Litecoin

Coinbase is like the VIP room in the most expensive bar. If, as a cryptocurrency, you make it there, you know you have made it. Currently Coinbase only allows you to buy three cryptocurrencies, they include Bitcoin (of course), Ethereum and Litecoin! The likes of Ripple and Dash are yet to make the grade.

When you use Coinbase, it gives you two main payment methods; bank transfer and via credit / debit card. Credit / Debit cards offer a quick way to buying Litecoin and do not have a waiting period before you receive the Litecoin however due to the legacy payment system, you are charged a fee for purchasing Litecoin. Not only this but you are also limited to the amount you can buy.

Can you Buy Litecoin with Paypal?

Some users may want to link their account with their Paypal account. This unfortunately is only possible in the US. The process however, can only be done in one direction. You can only withdraw your fiat currency from your Coinbase account into your Paypal account. Verification for this process is required.

Coinbase Paypal

Currently there is no functionality to deposit fiat currency from your Paypal account into your Coinbase account.

To repeat myself, this is only available to those who are US residents, however there are plans to roll this out to other territories.

How to Buy Litecoin using Coinbase - Step-by-Step Guide

Being able to buy Litecoin through Coinbase has made the process of getting your hands on it every so simple now. All you must do is; sign up to the website, link your bank account and then make the purchase of the coins with the funds you deposited.

Below is a more in-depth guide to buying Litecoin.

  1. Go to Coinbase and sign up using your personal details.Coinbase Sign Up
  2. You are given the option to add a 2-step authentication process to your login procedure. This involves sending a text message to your mobile phone with a code, you then must enter that into the required section before logging in. This is not essential but we would highly recommend you take advantage of it because it hugely increases security and reduces the chances of your coins being stolen by online thieves.Coinbase 2-Step Authentication
  3. Once your account is set up and secure, it is time to buy Litecoin. Now you must decide the method you want to buy it with, either using bank transfer or credit / debit card. We will use a bank transfer for this example, mainly because there are less fees associated with a bank transfer.Coinbase Add Payment
  4. You then need to link your Coinbase account to your bank account. Coinbase will ask for verification of your identity, this can take a little time. You will need to provide ID and something like a utility bill as a proof of residence.Coinbase Verification
  5. Once Coinbase verifies you, you can make a deposit into your personal wallet. Then you can use the Buy/Sell button to use your fiat currency to buy Litecoin.

How to Trade Litecoin

When it comes to trading Litecoin, there are various exchanges that allow you to trade Litecoin with other currencies. For you to do this, you will need a wallet that can hold whatever the cryptocurrency coin you intend to trade it for.

If, for example, you have purchased Litecoin using the process highlighted above, then you will be able to trade your Litecoin for Bitcoin and Ethereum because when you opened your account, you were given a Litecoin, Bitcoin and Ethereum wallet.

If you want to trade with other coins, you will need to look further afield. This will involve opening a wallet for the cryptocurrency you intend to trade and then use an exchange to make the trade. Highly regarded exchanges include Poloniex, Bittrex and CEX.

When you are trading using this means, you are actually buying and owning the underlying product, which in this case is the cryptocurrency Litecoin. This means that before you trade Litecoin you need to buy it first. Furthermore, if your intention is to trade and profit from the price fluctuations then you can only profit by buying low and selling high.

Trading Litecoin on Leverage

There is an alternative to actually owning the underlying product. Brokers are now making it available to trade cryptocurrencies as CFDs and other derivatives.

This allows you to trade on leverage, which means that you do not need to put the full amount of your position down, the broker will compensate you and fill the rest of the position. Resulting in you having spare cash that would have once been tied up in the trade, now being free for investment somewhere else.

The other advantage trading on leverage has, is that you can short sell. Compared to owning the underlying product where you can only profit by buying the asset, trading on leverage allows you to profit from a falling market as well, meaning you can sell at the top and buy back at the bottom. Essentially doubling your trading opportunities.

As mentioned, to do this you need to create an account with a broker. The next question is which one to you choose? There is no easy answer, but we have piled together a top five of our favourite brokers. Before you choose, make sure to compare each one to see which fits the bill for you.

Should I Buy or Trade Litecoin?

If you were asked to describe the current digital coins available, you would be correct in labelling Bitcoin as the granddaddy of the lot but you would also be right if you were to call Litecoin a favoured son. There are lots of examples of coins being developed and then leaving the crypto space having not made a mark.

Litecoin certainly does not come under this category, nor is it a money-making ICO scam that have begun to pop up. It has been developed to address and fix a few of Bitcoins shortcomings, and has been successful in doing this, thus giving Litecoin a value.

The technology behind Litecoin is also valuable because it has a lot of uses in day-to-day business activities, not just to maintain a cryptocurrency. The idea of using blockchains for more 'real life' applications opens up lots of doors for Litecoin and all cryptocurrencies.

Litecoin Value

Litecoin’s value comes from its technology as previously highlighted. The functionality of the blockchain network can be used for many solutions outside the crypto space. This sort of application can only be seen as a positive and gives plenty of potential.

Litecoin has always been a big player in the crypto world, although never taken Bitcoins crown, it has stayed competitive and ensured its position in the cryptocurrency market share top ten.

The fact that Litecoin has been around for over five years now, shows the strength it has as well as its longevity. There have been plenty of pump-and-dump coins but Litecoin has stayed the course.

Investing in Litecoin is surely a solid one. There is still room for growth and the steady technological base offers that platform for growth. It's ability to identify and address some of Bitcoins issues also gives it scope to be a real competitor in the future.

Future of Litecoin

Given we have begun speaking about Litecoin’s future, this opens up the future of cryptocurrencies debate. Is there a future? If so, is there still room for them to row?

To answer these questions, it is important to understand cryptocurrencies and the technology behind them. The majority of cryptocurrencies use blockchains, the strength of this technology has been identified and its value has essentially been quantified in the value of their tokens.

Litecoin Blockchain

Bitcoin value has rocketed because of the blockchain network it is built on. Bitcoin has soared through the $4,000 valuation per coin and the likes of Litecoin and others are almost forced to consider this as the benchmark. The real definition however is how effective is each ones blockchain.

Blockchains

Let’s walk before we can run. Blockchain technology is a public, un-hackable ledger of transactions that are filled out on blocks and linked together in a chain.

The great thing about this technology is that there is no one centralised institution that controls it. A consensus between the network is reached before each block is added to the chain.

The code is opensource and available for all. If changes to the program are required, a democratic vote is needed, where all miners are allowed to vote on the change, and means anyone can influence the direction of the network.

It is decentralised and available to all, but what does it do and what does it mean for the future?

Blockchains record every transaction that has ever occurred with the digital currency in question. A mine is someone who adds blocks to the blockchain and is then rewarded with Litecoin (in this case) for this procedure. These are recorded and once on the chain cannot be removed unless the whole network agrees, which is easier said than done.

Litecoin Mining

Litecoin’s method of mining differs to that of Bitcoins. It uses a different hashing function (scrypt rather than SHA-256), which basically means that mining a block is considerably quicker and less intense, requiring less computing power.

As you can see, Litecoin has taken some of Bitcoins issues and tried to fix them by changing the software. Litecoin also allows for a higher volume of transactions per block than Bitcoin does.

Unfortunately, life is not peaches for Litecoin and its technology. Due to the speed and size of the blocks there is a higher chance that blocks are orphaned, which can lead to transactions not being put onto the blockchain and in essence can cause double spending or payments.

Litecoin Staying Ahead

As you can see there are plenty of benefits to Litecoin but there also a few issues. With many more cryptocurrencies popping up and new and improved technology, Litecoin now needs to keep up.

There is a lot of exciting technology that is very innovative, Litecoin cannot rest on its laurels and the fact that it made it to Coinbase, but continue to push its blockchain technology.

There is definitely room for this coin to continue its growth but in the crypto world, technology moves forward quickly.


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