The consensus about Litecoin is somewhat split among the general population of traders. Some say it is nothing more than a less-capable alternative to the more prominent cryptocurrencies and others claim it will grow to be one of the main cryptocurrencies of the future. So how do you even know you want to invest in it?
What is Litecoin?
Let us start by defining Litecoin in clear and simple terms. Cryptocurrency was introduced in 2011 and runs on a peer-to-peer platform in tandem with open source software. It does not submit to a centralized authority like a bank or government. Litecoin is one of the oldest existing cryptocurrencies.
Many developers like to market their cryptocurrencies for their unique features and services. Litecoin however, is not one of them. It was more or less copied from Bitcoin, although some maintain it is actually an improvement on Bitcoin.
Is Litecoin really valuable?
The value of Litecoin is not entirely undisputed. Some say it is worth millions, and others are just as skeptical. As of now, the only real conclusion one can draw is that no one knows for sure. Going by the history of cryptocurrencies in general, and their capacity for exponential growth, it will not be difficult to assume that a major cryptocurrency like Litecoin will go up in value. But there is no way of knowing that for sure.
For all we know, the value of Litecoin might rise to a hundred times what it is now. But its value can just as easily head south. That is the gamble you are taking as an investor. Rumors and opinions will abound but ultimately, only time will usher in reality.
How to Buy Litecoin
You can buy Litecoin the same way that you buy any other cryptocurrency, by signing up with an exchange or broker (We recommend Easymarkets). But this is where it can get a bit messy. As a novice trader, you are particularly sensitive to bad press and the hearsay that your investment is too risky and will land you in unfamiliar situations.
The solution of course, is to have on a third-party exchange to enable peer-to-peer trading. But before you start investing in Litecoin, you must have a verified account on a cryptocurrency exchange. That involves uploading government-issued identification documents – passport or driver’s – license among other processes. You had best open your account with a reputed exchange like Coinbase.
However, exchanges are not the only way.
Alternative methods of buying Litecoin
Brokers are another way to go, especially those like Plus500 and eToro which allow you to trade Litecoin without having to verify your identity or even owning any of the cryptocurrency. Plus, you will be dealing with a reputed trading firm that facilitates the trading for you and enables you to make instant sales.
This is actually a safer, swifter, and more convenient way to trade. The catch is that you technically do not own any Litecoins and there is usually a limit in place for how much profit you make from each trade. If your incentive for buying Litecoins is the prospect of significant growth of value, this is not a method for you to try since your profit will never go beyond the pre-set limit, no matter how successful your trades may turn out.
There are some programs that do not impose such limits, one of them being Markets.com. On the other hand, Trade.com might contain extremely high limits or no limits at all.
Mining is also part of generating new Litecoins. This is pretty much how it was first generated, so if you have the means, you can go right ahead and create some. If you need help, you can refer a page on Litecoin mining and find out what you need to know.
As we had recommended earlier, the best cryptocurrency exchange for obtaining Litecoin is definitely Coinbase. While there are more options to look at, not all of them are compatible with Litecoin. While Litecoin remains among the top five most popular cryptocurrencies in the world, it is still not on the level of Bitcoin and Ethereum, which take priority in several exchanges.
Litecoin vs Bitcoin
We mentioned earlier that Litecoin is mostly a copy of Bitcoin. But what are the differences? Which one should you buy? Which is more conducive to your budget and your ambitions? In terms of budget, there is no contest. Litecoin right now is decidedly a lot cheaper to buy than Bitcoin. That said, you can also buy fractions of coins as well, so ultimately, your budget will not be that big of an issue.
Both Litecoin and Bitcoin are highly volatile. However, as the lesser-rated currency between the two, Litecoin has a value that is relatively more unstable. Its price surges up and down like with any other cryptocurrency but there is notably less confidence shown by the investment community that seems quite happy to switch at the slightest hint of trouble. Whether that is fair-minded or not is an open question.
Regarding the differences in statistics and technology surrounding Bitcoin and Litecoin, the latter maintains a higher limit, with at least four times more coins in the running. Litecoin only emerged a couple of years after Bitcoin and its market cap is somewhere around 20 times less.
Should you invest in Litecoin? It may be a prominent cryptocurrency, but it is also one shrouded in uncertainty. Perhaps it may also be lacking a bit of originality. But there are certain features about it that might be just what you are looking for. At least for now, you know how you can buy it.