What is Litecoin? Everything you need to know about the LTC cryptocurrency

Litecoin (LTC) is a decentralized peer-to-peer blockchain invented to securely enable fast and near-fee-free payments anywhere in the world. It is an open-source project over which no central authority has control.

Litecoin was created as a hard fork of the Bitcoin blockchain. The community felt that the groundbreaking digital asset Bitcoin had lost much of its intended use as an everyday global payment system due to high network fees and long transaction times. Litecoin was therefore created to conform to the original philosophy of the mysterious Satoshi Nakamoto. 

What is Litecoin?

Litecoin, created in 2011, aims to be the lighter variant of Bitcoin to enable fast and affordable payments. It is almost four times faster than Bitcoin in terms of payment processing. Litecoin was built to provide improved scalability for faster growth. 

In many ways, Litecoin is also identical to Bitcoin, and this is precisely why Litecoin is often referred to as the silver coin and not the gold of Bitcoin. Litecoin’s main goal is to set up a global payment system so that people can send and receive funds wherever they want without intermediaries.

Litecoin has a native token denoted by the abbreviation LTC, and at the time of writing, LTC is trading at $47.87 with a market cap of just over $3.1 billion.

Is Litecoin a form of money?

Although there are more than 5,000 merchants that accept the LTC as a valid means of payment, it cannot be considered a true money substitute due to the lack of universal acceptance and absolute liquidity. However, Litecoin can be used in many retail and e-commerce businesses as the foundation has successfully built many strategic partnerships.

Is it legal?

The short answer is yes. Litecoin is an open-source, decentralized, peer-to-peer cryptocurrency project released under the MIT/X11 license. Regional regulations would vary from country to country, but except for countries that have issued an outright ban on cryptocurrencies, Litecoin has traded on all trading platforms and exchanges that adhere to KYC and AML regulations.

What do people use Litecoin for?

Almost a decade has passed since Litecoin’s inception, so there are many uses for the cryptocurrency that you can benefit from.

    With the LTC, payments can be made anywhere in the world, both regionally and internationally, securely, quickly and reliably.

    LTC can also act as your currency substitute as more than 5,000 brick-and-mortar and online retailers accept the token as a payment method.

    Litecoin allows both short and long-term investments to be made by traders and investors looking to make a profit.

    LTC can be purchased to store your funds on a decentralized blockchain that is not controlled by any government or central authority.

Which merchants accept Litecoin?

Since its inception, Litecoin has not only gained popularity worldwide as a means of payment but has also formed a variety of strategic partnerships that have enabled the LTC project to be accepted by thousands of merchants around the world. The most well-known dealers include the following: 

    CoinPayments – It is a service that allows companies and merchants to accept LTC and other altcoins as valid payment methods.

    Ellenet – It is an IT services company that accepts LTC to provide customers with its wide range of technological solutions.

    Miami Dolphins – Since the partnership between the Litecoin Foundation and the Miami Dolphins, fans of the team can use the LTC to purchase tickets and merchandise.

    Cryptopet – Here you can shop for apparel and accessories for your feline and canine friends.

    Cheapair – If you are looking for hotel bookings, flights, car rentals and want to pay with your LTC, this is the service to use.

    Re/Max – A London-based real estate service that accepts LTC to buy and rent properties, among other cryptocurrencies.

    CryptoGames – An online gambling and gaming site that accepts LTC and offers a wide range of games for your entertainment.

How does Litecoin work?

Litecoin was developed based on the Bitcoin protocol but differs in the use of different hashing algorithms, block transaction duration, hard cap and a variety of other factors. Litecoin was released via GitHub, which is an open-source code client. Using a different method, Litecoin prioritizes transaction verification time, which is nearly 2.5 minutes for each block. This means that the network can process transactions at a much higher speed compared to the Bitcoin protocol.

How it all began – The Story of Litecoin

Litecoin was founded in 2011 when a former Google employee, Charlie Lee, laid the foundation for the Litecoin Foundation. He saw the limitations that exist within the Bitcoin network, such as the slow processing speed and the time it takes to verify transactions. Lee took a different approach to creating a lighter version of the currency, and that’s why the currency was called Litecoin, with a native token called LTC. Transaction time has been reduced by 75% to make Litecoin more adaptable for mainstream use.

Litecoin Mining – How are new coins created?

Litecoin differs from Bitcoin when it comes to mining new tokens. Instead of the traditional proof-of-work protocol, it uses a memory-intensive proof-of-work mining protocol called Scrypt, which allows regular hardware to mine LTC tokens. This means that anyone with a Windows PC or Mac can mine LTC without the need for special and very expensive GPUs and other hardware such as ASICs. This type of hardware is not required for mining LTC.

In the early stages, the LTC blockchain rewarded 50 tokens, but in 2015 it was reduced to 25 tokens. The reward will continue to drop by 50% each year as the LTC blockchain hits the hard cap of 84 million tokens.

Supply – How many coins are available, what if they run out?

The Litecoin Foundation has severely capped the maximum supply of LTC tokens, which is set at 84,000,000 LTC. Currently, the total and circulating supply of tokens has reached almost 75% of the cap and stands at just over 65.5 million. When the hard cap is reached, there will be no more coins to mine, and market forces such as demand and supply, competition from other cryptocurrencies, and the regulatory environment will determine the fate of LTC in terms of its price.

Decentralization – what does that mean?

In the context of blockchain and cryptocurrency, decentralization simply means that there is no central authority or individual that has absolute or decisive influence over the affairs of a blockchain or its cryptocurrency. Instead, it is the people, contributors and stakeholders of the project who use voting as a vehicle to make influential decisions to make the process more democratic and transparent. This governance approach is called decentralization.

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Invest in Litecoin

Like any other cryptocurrency, Litecoin is prone to sudden surges and unforeseen volatility. This means that it can be a great investment source for short-term traders and investors who can use these swings to their advantage. On the other hand, the same volatility can wipe out your capital in a matter of minutes. 

Therefore, if you are investing in LTC, you should make sure that you have done your research and taken steps to make your investment risk-free by investing in different coins – i.e. by having a diverse portfolio.

Why should you invest?

There are a variety of reasons you might want to invest in LTC, or any token for that matter. Please ensure you understand the reason for your investment so that you can choose the appropriate investment strategy. Some of these reasons are listed below: 

    You may want to invest in LTC or other altcoins to create a secondary income stream that can supplement your primary income.

    You may wish to park your disposable income in a decentralized asset or environment that is not under government influence.

    You want to get a long-term return on your investment by holding LTC for months or even years.

    Perhaps you believe in the LTC project and would like to become one of the contributing stakeholders.

Price and Volatility – Why is the price so volatile?

As it is a decentralized project, all market forces affect the Litecoin price, which leads to volatility. It is the same phenomenon observed with other cryptocurrencies. From the latest technological developments and new altcoin entrants to societal acceptance and influencer opinions, anything can drive the price trend up and down in a matter of hours. The same volatility is also used by many traders to make profits through investing wisely. 

Where to buy Litecoin

As one of the first cryptocurrency projects, Litecoin is available on a variety of crypto exchanges and trading platforms. However, you need to consider various factors before choosing a platform to buy LTC. These factors include the ease of use of the platform, transaction fees, customer support, and reputation. Some of our favourite crypto exchanges are the following:

    eToro – When it comes to clone trading platforms, eToro is second to none. With a wide range of cryptocurrency CFDs, user-friendly experience, affordable transaction fees and expert crypto advice, you can’t go wrong with eToro.

eToro

Minimum deposit: $10 (promotion)

User rating: 10

Description: eToro is a multi-asset investment platform with more than 2,000 assets including stocks, ETFs, indices, commodities and cryptocurrencies. eToro offers 20+ crypto assets or invest in CryptoPortfolio and benefit from cumulative growth of Bitcoin, Ethereum, XRP, Litecoin and other leading cryptocurrencies. eToro clients can connect, learn from and copy other users or be copied by other users.

Payment Methods: 1Pay, 2C2P, 3D Secure Kreditkarte, ACH, ANELIK, Abaqoos, AdvCash, AlertPay, Alfa-Click

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Full Regulations: AMF, ASIC, CySEC, FCA

eToro is a multi-asset platform offering CFD and non-CFD products. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 – After years of experience, Plus500 has developed itself into one of the leading crypto trading platforms. Here you can buy Litecoin and all other altcoins including XRP, BTC, ETH, XLM and more.

Plus500

Minimum deposit: $100 (promotion)

User rating: 10

Payment Methods: bank transfer, credit card, PayPal,

Full list of regulations: ASIC, FCA, FSA, ISA, MAS, cysec-250-14 regulator

76.4% of retail investor accounts lose money when trading CFDs with this provider.

FXTB – Although created primarily for forex trading as the name suggests, FXTB has used its solid reputation to become one of the leading cryptocurrency platforms where you can easily ‎Buy Litecoin LTC and many other cryptocurrencies.

Litecoin Wallets – Store LTC securely

The safest way to store your Litecoin is in a crypto wallet and not your exchange account. This is why you need to invest in a good crypto wallet if you want to store your LTC tokens for a longer period of time or if you want to get into serious or professional cryptocurrency trading.

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What are wallets?

Crypto wallets come in the form of either hardware gadgets like flash drives or software applications that you can install on your computer or smartphone. They have special trading, security and storage features that help keep your LTC tokens safe and secure from any vulnerability.

What types of wallets are available?

There are different types of wallets available in the market including the following:

Web Wallets

Web wallets are typically those that reside within a crypto exchange account where you can log in using secure credentials. They offer better accessibility and are user-friendly, but don’t offer many security features. 

Mobile Wallets

Mobile wallets bring greater portability to those traders who want to buy, sell and trade on the go. They come in the form of iOS or Android apps that can be installed on your phone. They are user-friendly and offer more security compared to web wallets. LoafWallet and Jaxx are good mobile options for storing LTC.

Desktop wallets

These are desktop applications that can be installed on your Windows PC or iMac to save your LTC. They offer better security features and have a built-in trading option that can come in very handy. Exodus and Atomic wallets are good options if you want a desktop wallet.

Hardware Wallets

If security is your top priority, you need to opt for a hardware wallet that is completely isolated from the outside world as it has no internet connection. Furthermore, they are also secured with 2FA and special passphrases to ensure better security. Ledger Nano S /X and Trezor are good choices for storing LTC.

Wallet Combinations

You also have the option of using a combination of different wallets as many of them can be linked together. This way you get the optimum of security, usability, features, reliability and convenience – for example, Ledger Nano S in combination with Atomic Wallet. 

Keep wallet on the exchange – possible advantages and disadvantages

While there is nothing wrong with keeping your LTC in the wallet, it is not inherently secure. The site may be closed at any time preventing you from accessing your funds. Likewise, high-profile websites are often the victim of security breaches, which means you are at risk of losing your coins. Because of this, it is always better to keep your coins in a dedicated wallet. 

What are the pros and cons of Litecoin? 

The lucrative currency Litecoin offers some advantages compared to other cryptocurrencies. 

Litecoin advantages

In particular, the speed of the transactions should be mentioned here. Litecoin creates, validates and approves individual blocks up to four times faster than Bitcoin. This circumstance enables a higher total number of coins. Users benefit from the fast functionality primarily through lower transaction costs. In addition, mining is much more attractive. 

Litecoin cons

A disadvantage of Litecoin is the rather unstable rate of the currency. Again and again, individual political decisions had a major impact on cryptocurrency prices. These then fell off rapidly or were strengthened enormously. This increases the general risk when trading cryptocurrencies. Overall, the advantages of Litecoin clearly outweigh the disadvantages. The currency offers an interesting and quite attractive alternative to Bitcoin. Litecoin has already been able to correct some of their disadvantages and problems in its own system. 

The Future of Litecoin

Litecoin developed very promisingly at the beginning. Within a very short time, several versions came onto the market, which clearly differed from the previous one. Security and network performance have been continuously improved and further developed. A similar development is to be expected in the future. The team behind Litecoin is constantly working on optimizing the system. The constant update of the versions makes this clear. With its high market capital, Litecoin is one of the ten most successful cryptocurrencies in the world. The Litecoin price has been rising again since the beginning of 2019. 

The currency is also gaining popularity on the dark web. As a result, Litecoin enters a market that is not yet occupied by many digital currencies. This coin should also be a safe currency in the future. Litecoin also enjoys a great reputation on the Chinese market. There are currently several reasons that speak for a future price increase. It therefore seems worthwhile to invest in Litecoin. However, forecasts are never certain and are influenced by political and economic shocks.

FAQ

1. Which wallets are safe for storing Litecoin (LTC)?

If you want the best in security then go for the hardware wallet like Ledger Nano S or X or Trezor. Otherwise, Atomic Wallet, Jaxx or Exodus can also be good software options.

2. How does Litecoin mining work?

Litecoin uses the Scrypt proof-of-work protocol, which means that regular computers running Windows or macOS can be used to mine LTC.

3. Should I invest in Litecoin?

If you want to invest in LTC, do your research, read expert reviews, and diversify your portfolio by investing in different coins.

4. Can Litecoin be used for everyday purchases?

Litecoin is one of the most widely used cryptocurrencies along with Bitcoin and can be used to make purchases in thousands of retail and e-commerce stores.

5. Is Litecoin a decentralized blockchain?

Definitely! The Litecoin blockchain is a decentralized network that cannot be influenced by any single individual or any central authority such as a government or any powerful organization.

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