Numerous cryptocurrencies aim to gain the attention of the public as an alternative to fiat currencies. One of these is Litecoin, which was created by a former Google employee, Charles Lee in 2001. Since its introduction in the cryptocurrency industry, it has been dubbed the digital silver in comparison to Bitcoin’s gold.
How Litecoin came to be
When Bitcoin was first introduced into the market, it received mixed criticisms from the public until its price soared and started the crypto craze. During this time, digital currencies became prevalent and many developers took advantage of this.
Several cryptocurrencies started surfacing to follow the success of Bitcoin and one of these is Litecoin. Its creator, Charles Lee, aimed to develop a cryptocurrency that would address the shortcomings of Bitcoin.
Advantages of using the Litecoin cryptocurrency
If you’re wondering why you should use Litecoin instead of other forms of cryptocurrencies, here are some of its advantages that you need to check out:
Faster transactions
One of the problems that people encounter in Bitcoin is the duration of transactions. It usually takes a long time to encrypt data that puts traders at a disadvantage in the highly volatile crypto market.
To solve this, Litecoin started using an upgraded transaction format in 2017 called the Segregated Witness process. This speeds up the operation by separating the information into two sections, allowing space for more transactions in a single block.
Litecoin currently has a transaction speed of 2.5 minutes in comparison to Bitcoin’s 9 minutes. This makes Litecoin cryptocurrency an excellent option for merchants and other users who prefer a shorter and faster transaction.
A cheaper alternative
Litecoin allows users to make smaller transactions at lower costs, requiring only around 20 cents as opposed to Bitcoin’s $2. This way, you can resort to Litecoins for quicker transactions and set aside your Bitcoins for investments and bigger payments.
Easily accessible
Since Litecoin has been gaining popularity in the crypto sphere, more people use it as a form of payment. Because of its convenience, Litecoin operates as an online payment system similar to PayPal or an online bank. As of the moment, it is ranked eighth on the list of cryptocurrencies by market cap, continuing its ranking streak within the top ten for almost 8 consecutive years.
You can easily acquire Litecoin by purchasing from trusted exchange sites such as Binance or Gemini. Many stores like CheapAir and Cryptopet now accept Litecoin as a mode of payment which serves as proof of its growing popularity.
Decentralised currency
Similar to other cryptocurrencies, Litecoin does not operate on a central authority. This means that all transactions run on a blockchain that allows peer-to-peer transactions. The security and integrity of this process remain uncompromised since all transactions are recorded and verified by miners all over the world.
In this process, miners have to confirm the legitimacy of a transaction first before permanently adding it to the blockchain. As a reward for verifying transactions, miners receive an incentive in the form of Litecoins which encourages them to maintain honesty and integrity in the process. This year, the current incentive is worth 12.5 LTC.
Through this organised system, cryptocurrencies like LTC can operate without a central authority. Unlike fiat money that is managed by governments and banks, Litecoin gives people complete control of their funds at an easier and faster rate. Moreover, since government institutions do not have jurisdiction over cryptocurrencies, they cannot alter the value and purchasing power of Litecoin.
It uses a simple algorithm
Since its operations and system are not as complicated as those of other cryptocurrencies, Litecoin is considered more accessible and inclusive to miners who want to enter the market. This means that anyone with an ordinary computer can mine Litecoin as long as the machine has the capacity to process transactions, as opposed to other cryptocurrencies that need specialised hardware and advanced processors.
Additionally, compared to other cryptocurrencies like Bitcoin that requires powerful computers to process its highly complex algorithm, Litecoin operates on a less complex algorithm called Scrypt. This is used by miners to confirm transactions.
Due to this, mining Litecoin cryptocurrency can be done with readily available and less costly processing units, thereby providing easier access for users who wish to participate in the process.
How to store, invest, and trade your Litecoin
Best wallets for your LTC
Through an electronic wallet, you can store your Litecoin for later use in investing or trading. The best wallets you can use are Ledger Nano S, Trezor T, and Electrum LTC.
Once you’ve chosen your preferred wallet, you can purchase LTC through various exchange sites like Binance and Coinbase which are currently the top exchange platforms for cryptocurrencies.
Buy your LTC low and sell high
When investing in Litecoin, the smartest way would be to buy when the price is low and wait for it to go back up before selling. You can visit various sites to keep track of the movement of currencies in the market. This way, you can evaluate the performance of the currency in real-time.
Trade your LTC using CFD
You can also trade your Litecoin by purchasing Contracts for Difference (CFD) where you wager on the possible performance of the currency. This means that when you buy a CFD, you will predict whether its price will rise or fall within a specific period of time. For instance, if you predict correctly that the price will rise, you will profit from winning the wager. If you guess incorrectly, you have to pay the other person.
Litecoin cryptocurrency: Should you invest in Litecoin?
Litecoin is currently priced at US$151.33. With its present rank and positive performance in the market, experts believe that the price of Litecoin will continue to soar, even up to US$1,200 by 2025.
Litecoin has since received positive sentiments when it outperformed Bitcoin in 2020 in terms of percent surge and because of this, the currency is expected to see more price hikes in the following years. Moreover, since PayPal now supports the use of cryptocurrency in buying, selling and holding digital assets, Litecoin may reach a wider market.
You can read more about the latest news and updates in the crypto market here in Cryptoshimbun.