Quick Guide to Litecoin : Open-Source Cryptocurrency

Are you worried about Litecoin once you read that Charlie Lee, the founder of Litecoin, has sold his stake? Well, let me address some of your concerns in this quick guide to Litecoin.

What is Litecoin?

On October 7, 2011, Litecoin was launched as an alternative cryptocurrency based on the Bitcoin model. It is derived from an open source global payment network which is not regulated or controlled by a central authority figure.

Although it was a fork of the Bitcoin Core, it differs from Bitcoin in the following ways:

  1. Litecoin has 4 times more maximum cap
  2. Litecoin is quicker to generate
  3. Different hashing algorithm, known as scrypt

Check out this video that summarizes the difference between Bitcoin and Litecoin:

Key Features of LiteCoin

The Litecoin Network aims to process a block every 2.5 minutes, which in turn allows for quicker transaction confirmation.

In addition, it uses scrypt as its hashing algorithm. Because of this, devices made specifically to mine Litecoin are far more costly to produce. In addition, these mining devices have limited use outside of mining for Litecoin since they cannot switch to mining for other cryptocurrencies.

Litecoin and other cryptocurrencies make the transfer of funds much easier between two parties. These transactions can be completed with a cheaper processing fee compared to
that of conventional banks.

Where to buy Litecoin?

The easiest way to obtain Litecoin as a means of investment for future rewards is purchasing.

In the US or Europe, Litecoin is available on numerous platforms. For reference, purchasing and/or selling Litecoin can be done with the help of certain exchanges, including:

Some of these exchanges also support purchasing and selling in several countries throughout the world.

Charlie Lee recently tweeted that Zebpay, an exchange in India, will allow the trade of Litecoin.

Quick steps to buy Litecoin

Let’s go through the step-by-step process to buy Litecoin from Kraken. I am assuming that you have signed up for Kraken already. Let’s get started.

  1. Step 1.
    In the currency drop down on the top left corner of your screen, select LTC/XBT.Its easier to transfer cryptocurrencies in Kraken. You will need to get verified to transfer in fiat currencies. Kraken supports Euro and USD.
  2. Step 2.Quick Guide to Litecoin - Kraken 1

    Click on the New Order sub-menu.

    Enter the amount of LTC you wish to buy. You can either use the Market rate or set a Limit.

    You will see the total amount of XBT you will need to spend to buy LTC.

    Click the Buy LTC with XBT button.

  3. Step 3.Quick Guide to Litecoin - Kraken 2

    On this page, you can verify the details of the order.

    You can click Submit Order.

    Based on when your order is processed, if it’s a Limit order, you will get Litecoin in your wallet on Kraken. If its a Market order, the order will get Litecoin in your wallet nearly immediately.

Should you mine Litecoin?

Rather than being controlled by one central authority, Litecoin outsources the work across a connection of “miners.” Miners arrange a series of transactions made in the Litecoin network into large bundles known as “blocks.” These blocks constitute an authentic record of every transaction ever made (“blockchain”).

In the early days of Litecoin, mining with personal CPUs or GPUs could easily earn you a profit. Nowadays, specialized mining hardware (referred to as ASICs) have taken over the mining process and can operate much more efficiently. This has made finding blocks a lot harder to do with your average computer setup.

Like any business, you want to as big a profit as possible by keeping costs in control and as low as possible. Purchasing an ASIC for more efficient Litecoin mining is a hefty investment with little to no value outside of mining this specific cryptocurrency. Power consumption is another factor you must take into consideration. Serious miners leave their operations running 24/7, meaning a higher electrical bill.

Furthermore, consider the increased difficulty of producing Litecoins as more and faster miners enter into the network. In the end, prepare an exit strategy when costs outweigh the benefits you earn after expenses.

What does the future hold for Litecoin?

Similar to any other currency and investment avenue, the future of Litecoin is hard to predict. The process of mining Litecoin is significantly different from that of other forms of cryptocurrencies, making it an unviable option for corporations with large investments in other mining hardware to switch to mining Litecoin. In the end, it is quite difficult to
predict when or even if Litecoin will ever reach a value of US$1,000 per Litecoin.

Cryptocurrencies are indeed the trending currency in this modern and digitized era. If history tells us anything, a small investment in cryptocurrencies can reap huge rewards in the future.

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