Litecoin cryptocurrency guide advises where to buy and how to buy Litecoin. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Litecoin as well its status in the world of cryptocurrencies.
Litecoin, Thursday, 2018-02-22
- 1 What Is Litecoin?
- 2 Beginner's Guide to Litecoin
- 3 Where and How to Buy Litecoin?
- 4 Litecoin Markets
- 5 Where to Spend or Use Litecoin?
- 6 How Does Litecoin Work?
- 7 Litecoin Regulation
- 8 Is Litecoin Secure?
- 9 History of Litecoin
- 10 Litecoin Videos and Tutorials
- 11 See Also
What Is Litecoin?
In the last couple of years, the interest in cryptocurrencies has shot up. One of the main reasons for this growing interest is the fast growth of Bitcoin. Bitcoin has become the face of the cryptocurrency world. However, other cryptos have also entered the scene and are equally making huge strides. One such cryptocurrency is Litecoin.
In his own words, Litecoin developer explained that his target was creating ‘silver’ to Bitcoin’s ‘gold’. In October 2011, Charlie Lee completed and launched the Litecoin core code. Therefore, what exactly is Litecoin?
Litecoin (abbreviated as L or LTC) is a peer2peer cryptocurrency and open source software project founded under the MIT/X11 License. The founder, Lee, a former employee at Google indicates that Litecoin was an early fork of Bitcoin core client. Therefore, it operates in many aspects just like Bitcoin but differs in a number of things such as the number of coins and hashing algorithm.
Though Bitcoin was still in its infancy years, Lee was quick to find key flaws and set out address them. As a programmer, Lee noted the high cost of transactions in Bitcoin even though they were still peer2peer. The Litecoin development team was convinced that the transaction costs could be brought down by a huge margin. Litecoin was also intended to help democratize mining. Within the first five years, it was becoming clear that expensive mining hardware were relegating CPU users to the back seat. This also raised the problem of more Bitcoins falling into the hands of a single entity. To get deeper into Litecoin, it is crucial to contrast it with Bitcoin at this early instance.
The main differences between Bitcoin and Litecoin
- The market capitalization and popularity
- Bitcoin is by far the most popular cryptocurrency out there. This popularity is brought by the fact that it is the oldest crypto, it has the highest market capitalization, and its value has skyrocketed in the recent months.
- Litecoin on the other hand is one of the fastest upcoming crypto in the market. It has grown progressively and entered the top five cryptocurrencies based on market capitalization. Its popularity has however been dwarfed by other equally upcoming cryptos especially Ethereum. The recent forks of Bitcoin yielding Bitcoin Cash and Bitcoin Gold are also stealing the show from Litecoin.
- The number of coins created in the two networks
- When Bitcoin was created, a finite number of coins were created. Only 21 million coins will ever exist in its network. However, Litecoin created 84 million coins. Though the difference might sound big, it might be less significant because every Bitcoin can be subdivided to one hundred millionth of every coin (a satoshi). However, it appears that many people would prefer trading in full units as opposed to calculating many decimal points when using the coins to make a purchase.
- Transaction processing speed and capacity
- In Bitcoin network, transaction takes about nine minutes. However, you only need 2.5 minutes to send cash in the Litecoin network. The transaction speed is one of the most important things that Litecoin wanted to revolutionize when creating the network. In May of 2017, Litecoin made the headlines for being the first to make the fastest transaction using Lightning Network that saw a transaction between Zurich and San Francisco completed in less than one second. This is a great score against Bitcoin.
- Difference in hashing algorithm
- The most notable difference between Bitcoin and Litecoin is the hashing algorithm. Bitcoin uses the SHA-256 algorithm while Litecoin opted for the newer model referred to as Scrypt (pronounced Ess Crypt).
- SHA-256 is a widely used and very secure cryptographic algorithm. Bitcoin miners originally mined Bitcoin SHA-256 blocks with normal computer CPUs. As the value of Bitcoin rose a mining arms race broke out with GPUs taking over from CPUs which were then replaced by ASICs (Application Specific Integrated Circuit). Asics are highly specialised processors that can only do one thing but do it incredibly efficiently. Once ASICs were released for Bitcoin it killed all GPU mining immediately as there was no way to compete with such specialised hardware.
- When Litecoin launched the Scrypt algorithm was chosen. It was thought Scrypt was an ASIC resistant algorithm due to its extremely large memory requirements. This was indeed the case for the first few years of Litecoin mining but once Litecoin started to gain in value ASIC chip research began by several companies and in early 2014 the first Scrypt ASIC miners started to ship.
Beginner's Guide to Litecoin
Cryptocurrencies are the hottest thing on the globe today. Everyone who has some money to spare is considering acquiring Bitcoin or altcoins and expecting the current exponential growth to continue for longer. Litecoin is one of these fast-growing cryptocurrencies that have generated a lot of interest.
In less than one year, the cryptocurrency’s native coin, XRP, has experienced over 400% in growth. Well, while this could be dwarfed by the sky-rocketing Bitcoin that is now way past the $10,000 mark, there is no doubt that Litecoin is a force to reckon with.
For people getting into the cryptocurrency world for the first time, emerging cryptos are seen to hold huge potential. With Bitcoin being considered to be approaching the climax, emerging cryptos have started gaining speed.
Therefore, just like those people who bought a few Bitcoins several years back can now smile all the way to the bank, the same enthusiasm has caught those interested in Litecoin. But many questions abound. What exactly is Litecoin? Is it a great investment? Has it ever been hacked? Who owns Litecoin? Will I lose my investment? Do they protect clients?
The endless questions are what you must get concrete answers for to make the right decision to join the Litecoin network or not. These are the answers we answer in great details on this guide so that you are left in no doubt about the potential of this cryptocurrency. The guide is the best starting point for users as well as experienced traders who want to compare, draw the best decisions, and reap handsomely from the fast growth. Get everything you need to know about Litecoin right here. Welcome.
Where and How to Buy Litecoin?
As an alternative currency, Litecoin provides users with a new line for trading and making a lot of revenue. The demand for Litecoin has been growing rapidly in the last 6 months. This has been attributed to emerging popularity of cryptocurrencies.
Notably, trading in Litecoin is simpler than most fiat currencies because the price is driven purely by demand and supply. With the limited supply of LTC, the ever-rising mining difficulty, and growing interest, people with LTC can only expect the value to continue growing. The main places to buy and trade Litecoins include;
- Cryptocurrency exchanges
- These are the common markets that handle multiple cryptocurrencies. Most of them deal with many cryptocurrencies and allow buyers and traders to buy based on what they can afford.
- Unlike the cryptocurrencies that operate in great anonymity, most exchanges are regulated by the local administrations. This means that you have to provide some form of verification before using them. However, the details that an exchange requires can vary depending on its internal rules and regulations. There are those that require email only for verification while others ask for proof of address and phone number.
- Because cryptocurrency exchanges are different, the charges vary greatly. Some exchanges have lower fees compared to their competitors. It is, therefore, very important to review the prices carefully and only pick the exchange that has lower rates to avoid losing a lot of altcoins when trading. Some of the main Litecoin exchanges where you can buy and trade Litecoin include Poloniex, Kraken, and CEX.io.
- Brokerage platforms
- Many brokerage firms operate just like cryptocurrency exchanges. However, the brokerages set the price and are not solely guided by the forces of demand and supply. You should always check whether there are additional charges when dealing with brokers to keep the cost down. Some of the great examples of Litecoin brokerage platforms include CoinMama and BitPanda.
- Cryptocurrency ATMs
- In the past, it was impossible to think about stopping in an ATM (automatic teller machine) and buying cryptocurrencies. However, ATMs have emerged in top cities such as New York for users to buy cryptocurrencies directly. Notably, most cryptocurrency ATMs available mainly handle Bitcoins. This means that you will need to start by purchasing Bitcoins and converting to Litecoins.
- Face to face trading
- If you thought that there is no way that one can trade cryptocurrencies directly, think again. Those who live in cities where a lot of people have taken to cryptocurrencies, it is very easy to get clubs and groups that trade the crypto assets directly. One such club is the LocalBitcoins. The club connects cryptocurrency users and organizes for a face-to-face meeting. It is in such meetings that you can negotiate for price and even learn more about Litecoin and other cryptos.
- When you decide to buy and trade in Litecoin, one must have item is a crypto wallet. It is crucial to look for an appropriate wallet and take extra caution to stay away from high-risk platforms.
Are you planning to join the cryptocurrency world? Do you have interest in Litecoin? Well, one thing that you MUST get before diving in is a cryptocurrency wallet. What exactly is a cryptocurrency wallet?
A Litecoin wallet is a software program designed for storing your Litecoin native assets, LTC. If you buy or get paid in Litecoins, they are stored in the wallet. If you mine some coins, they are directed into the wallet. However, the notion that the wallet stores the crypto-coins is actually a misconception. In reality, the wallet cannot literally store coins because they are no printed or minted. What the wallet stores are the private keys and public keys.
Private keys are special codes that help to link your wallet to the number of LTC you own in the network. If you have 20 LTC, it is only the private key that can confirm that. The key is only known to you and the wallet. If you lose the private keys, it means you have lost all the coins in the wallet.
Unlike the private keys, public keys help to identify an individual to facilitate payment. For example, if you are a business on the Litecoin network and a client wants to make payment for a product, what you provide the buyer is the public keys. The bottom-line to safely using Litecoin wallets is ensuring that the keys are never shared.
How to pick the best Litecoin wallet
How do I select the best Litecoin wallet? This is a common question that features prominently to new Litecoin users. Before we look at the best cryptocurrency wallets, let us outline the tips you should use to identify them.
- Security of the wallet. There is nothing as important as knowing that your wallet and all the coins stored in it are secure. You want to know whether the wallet provides top notch security features such as strong login, two-factor authentication, and use of a protocol such as HTTPS. You might also want to know whether the wallet provider has good customer support services.
- Multisignature option. In addition to being a secure platform, make sure to establish if the provider has a multisig option. Multisignature is a system that requires more than one key to authorize Litecoin transaction. Wallets with multisignature options are considered more secure and reliable.
- The anonymity of the wallet. Just like Litecoin emphasizes that all the transactions remain anonymous, so should the wallet you go for. A great wallet should only require minimal registration so that at no time can third parties follow back to identify you.
- The User Experience. As a store for your funds (crypto coins) you want a wallet that also makes it easy to use them. This means that the User Interface (UI) should be enthralling so that making payment, checking balances, and following the history is easy.
- Capability to backup the wallet. When you acquire a wallet, it is important to appreciate that the risk of loss still looms. For example, even if you are so careful with the desktop wallet, fire can unexpectedly raze down the house and burn the main computer. Therefore, the best wallet should also have a good backup that can help to restore the wallet incase it gets lost.
The Litecoin wallet you pick is the main determinant of the experience you will have with the cryptocurrency. Therefore, you should pick the wallet that has the outlined qualities and also won reputation from previous users. The main types of Litecoin wallets include hardware wallets, desktop wallets, mobile wallets, web-based wallets, and paper wallets. Here are some of the greatest Litecoin wallets to go for.
Top 8 Litecoin wallets for unique experience
1) Ledger Nano S (Hardware wallet)
- Ledger Nano S is one of the most popular Litecoin wallets on the market today. The wallet is like a standard USB drive that allows users to store their LTC offline. Unlike other wallets, ledger Nano S does not allow the private keys to leave the wallet at any moment even when making transactions. You only need to plug it into the PC or Phone to complete a transaction.
- Nano Ledger S is considered the most secure because it comes with a backup seed that allows the user to lockup and restore the private keys in the event of hardware damage or malfunction. In fact, even if the computer you are using is compromised, one can still use Ledger Nano S without worrying that the private keys will be lost or stolen.
2) Trezor (Hardware wallet)
- Trezor is another finger sized hardware wallet that operates in many aspects like the Ledger Nano S. The wallet was designed by a Czech based company and targeted supporting Bitcoin only. However, it has since been expanded to support other top cryptocurrencies including Litecoin.
- The wallet is very secure because your LTCs are stored offline most of the time. You only need to plug the wallet into the PC or phone when making a transaction. Like the Ledger Nano. Trezor also provides a special 9 digit pin code and a 24-word recovery seed to help with funds recovery in case the hardware is lost.
3) Exodus wallet (desktop wallet)
- This is one of the most favorite Litecoin wallets in the market today. It supports 8 cryptocurrencies including Litecoin. It was designed by experts in computing for Windows, iOS, and MAC users.
- It is highly secure and provides users with an easy to use recovery system and a 12-word recovery seed phrase. But the greatest thing about the wallet is that it has ShapeShift inbuilt in it. ShapeShift is a cryptocurrency converter and also one of the top exchanges in the market.
4) JAXX (Mobile and desktop wallet)
- This is a multi-currency wallet that supports Litecoin and 12 other crypto assets. It is designed with an easy to use interface for better control of the private and public keys. You can even export the keys at will from one point to another in an encrypted mode to reduce the risk of getting stolen.
- The wallet makes it very easy for Litecoin users because they can use it both on the phones and desktops. Besides, it also has ShapeShift inbuilt as a feature to help with direct cryptocurrency conversion and exchange. In the event that the wallet gets lost, you can recover it using the secret seed backup of 12 words.
5) Loafwallet (mobile wallet)
- This is the first iOS-only mobile wallet for Litecoin users. This means that if you have an android device, the wallet is not suited for you. The wallet is maintained by the Litecoin Association that also targets promoting the use of Litecoin. Recently, they have added a new feature that allows users to buy LTC through Coinbase and store in the wallet. As an iOS wallet, you can get and download it from the Apple Store.
6) The Litecoin Core (Desktop wallet)
- This is the official Litecoin wallet provided by the cryptocurrency on their website. The wallet is free and installing it means that you become a node of the Litecoin network. Unlike the hardware wallets that store the keys offline, the Litecoin Core stores them on the desktop. Note that because the Litecoin Core needs to sync with entire network, you need to download the entire Litecoin Block or give it several days to sync.
7) Electrum-LTC (desktop wallet)
- This is another desktop wallet designed specifically for Litecoin. It is lighter and considered the immediate alternative to the Litecoin Core Wallet. Unlike the Litecoin Core that needs users to download the entire LTC blockchain, the electrum-LTC is very light and starts working within a very short time.
- It is SegWit-enabled and further provides users with more features for freezing an address. This means that if you think an address has been in use for long and could get compromised, it can be frozen and a new one generated. It also provides a 12 words security recovery seed that makes it possible to recover the funds in the event that the wallet gets lost.
8) Liteaddress (paper wallet)
- If you do not feel comfortable or are insecure using the web, mobile, or desktop wallets, the next alternative is going for a paper wallet such as Liteaddress. You only need to visit liteaddress.org and generate private and public address for printing. Then, store the keys under lock and key. The Liteaddress is a great option for those who want to store the LTC for a long time before trading or selling.
Where to Buy Litecoin with Credit Card?
Credit cards are perhaps the commonest method of making payments today. Because they can be used to make payment to online stores such as e-commerce sites, many people opt to use them in daily shopping. However, can they be used to purchase Litecoin?
Though Litecoin has worked very hard to diversify methods of payments available, users can only use credit cards on the exchanges. These are markets that have diversified the methods of payment for Litecoin and other cryptos. Note that before you can buy LTC with a credit card, the first step should be getting an appropriate cryptocurrency wallet. This is the wallet that will hold the litecoins after the buyout. Here are the main places to buy with credit cards;
- Coinbase. This is a US-based market that allows users to buy LTC using credit cards. It charges a fee of 3.99%.
- CoinMama. This is one of the top brokers that allow users to buy Bitcoins using a Credit card and then convert to Litecoin.
- BitPnda. This is an Australian based brokerage that allows users to use a credit card to buy top cryptocurrencies.
- BitcoinBuy.com. This is a direct buy platform that allows users to negotiate directly about the price. If you agree on using Credit Card, go ahead and implement the payment.
Where to Buy Litecoin with PayPal?
Today, there is no direct method of buying Litecoin with PayPal. If your cash is in the PayPal wallet, the first step should be buying an equivalent of Bitcoins and converting to Litecoins. It is important to note that PayPal has banned its users from using their accounts to purchase any cryptocurrencies. Therefore, it might still be important to start by loading the credit card and using it to buy Litecoins.
How to Buy Litecoin with Wire Transfer?
While cryptocurrencies are the bridge to new digital currencies that people, it is interesting to realize that no one wants to discontinue the conventional banking services fully. But that is actually a great thing factoring the huge risks that come with cryptocurrencies. If you have some cash in the bank and want to buy Litecoin, here is the procedure.
- Acquire an appropriate Litecoin wallet. This is the first and perhaps the most important step. You should pick an appropriate wallet that will hold the LTC once the buyout is finalized.
- Identify the right cryptocurrency exchange that accepts wire transfer. Pick an appropriate exchange that accepts wire transfers. Note that most banks in the market today prefer other cryptos or credit cards.
- Provide details of your bank account and authorize the transfer. Most exchanges that accept payment via wire transfers such as Coinbase and BitPanda require users to provide a lot of details before accepting payment. Besides, you will also have to wait for some time (maybe days) before the money gets to the exchange and the purchase is effected. If you are in the US, consider using ACH transfer that takes about 5-7 days. For those in Europe, a better option is SEPA that takes 1-3 days. The charges for wire transfer vary between 1% and 2%.
Where to Sell and Trade Litecoin?
If you have been in Litecoin for some time, the chances are that you have accumulated a number of LTC. There are 3 main things that you can do with such coins; hold them waiting for the value to increase, use them to buy merchandise, or sell. But new users always ask about the best places to sell and trade Litecoin.
Trading Litecoin takes place in cryptocurrency exchanges. These are the markets that bring together buyers and sellers together. The target is picking the trading platforms that are secure, easy to use, and that has low fees. You can also sell the Litecoin through direct trading via cryptocurrency clubs. Here are some of the best platforms to consider when considering selling and trading Litecoin.
- Bitfinex: This is one of the most advanced and fastest growing exchanges in the market today. The platform is designed to help users eliminate unnecessary bottlenecks that hinder cryptocurrencies growth. Litecoin users who want to trade LTC and other cryptos for fiat currencies are encouraged to consider this exchange. It has a low transaction fee, a lovely user interface, and allows users to trade with both cryptos and fiat.
- Poloniex: This is one of the top US-based trading platforms that target making direct trading easy, fast and reliable. Because of the dangers of hacking that face most exchanges, Poloniex moves users' LTC and other cryptos for trade to cold storage. Only a small amount to facilitate trading is available. This means that in the event of an intrusion, the damage would be minimal.
- The biggest drawback for Poloniex is its complicated UI (user interface). Many people especially new Litecoin traders often find it very difficult to use Poloniex.
- CHBT: This is one of the fastest growing trading platforms in the Far East. The platform helps to make trading Litecoin direct and faster compared to other exchanges in the market. It also comes with multiple features such as cold storage, multi-signature wallet, and multiple security layers to keep users safe.
- LocalBitcoin.com: The LocalBitcoin club has become sensational in many cities. Because Litecoin use and operations are done anonymously, users are eager to get out and meet. This creates a unique opportunity for people to trade in their Litecoin. You can use the localbitcoin.com to identify a person who is willing to sell Litecoin for cash. The good thing about the face-to-face clubs is that there are no restrictions. You simply express intent to sell, and buyers will be there to complete the deal.
- The main drawbacks for such direct trading are that you can take some time to get an interested person and people with great negotiation skills can take advantage of you. Remember that even with direct trading through such clubs still requires users to have appropriate Litecoin wallets.
How Much Are the Transaction Fees of Litecoin?
The main reason for going crypto is enjoying lower transaction fee he making transactions. As a peer-to-peer network, it means that payments are sent directly to the target client and bypassing the banks. Note that the fee on Litecoin network is not fixed. Rather, it changes over time depending on the users and miners in the network.
The average fee of using Litecoin is 0.000100LTC or 0.04USD. This means that the charges are very low compared to what you pay when making a similar transaction on Bitcoin. Bitcoin users are charged $2.51 when they make payments. If you want to pay less for sending money, go for Litecoin.
To ensure you enjoy lower fees, it is important to look for a cryptocurrency wallet and exchanges that charge lower fees. In many cases, the amount to be sent, the charges and grand deduction are displayed on the user interface. Besides, it is crucial to regularly check the balances regularly to establish whether you are charged more than the indicated rates.
Today, there are several ways you can get Litecoins. You can mine, get rewarded by a friend, buy or receive as payment. The Litecoin markets are the best places for those who want to buy, trade, or follow the performance of Litecoins. These markets are top exchanges that facilitate the trade of Litecoin and other crypto coins.
How to pick the best Litecoin market
If you are looking for a great Litecoin market, you must be ready to make a more comprehensive review. The main factors to consider include;
- The fee: Many cryptocurrency markets charge their clients based on percentages of the trade volume. Here, it is important to check for a platform that only charges a small amount to avoid losing a lot of LTC to the market. It is particularly important to avoid markets that have regularly changing fees because one cannot plan appropriately.
- Requirements for verification: Most markets for buying and trading LTC require some type of verification. The target at this point is checking for a market that completes the verification fast, and that does not compromise your anonymity. For example, you might opt for an exchange such as Changelly that only requires the email address to register an account or ShapeShift that demand a lot of personal info including phone number.
- Administrative restrictions. Some markets only allow users from specific countries. This is crucial to avoid sending your Litecoins to an exchange only to have them stuck because people from your country are not allowed to use it.
- The reputation of that market: A great Litecoin market should have been on the market and demonstrated extra reliability. You can tell the reputation of the market by reading the reviews and listening what others in the crypto community have to say about it.
- Ease of use: If you are new to Litecoin and other cryptocurrencies, it is advisable to avoid markets that have complex user interfaces such as Kraken.
- Advanced trading features: You can only make a good trading decision if the selected market provides advanced metrics about the different cryptos. The selected exchange should have advanced features that provide real time analysis and statistics to determine which cryptos to trade and those to avoid.
In addition to these considerations, you want a market that has demonstrated the capability to protect its users at all cost. For example, Coinbase insures the value of currencies being traded in the platform. Experts in cryptocurrencies also advise clients to avoid platforms with regular reports of hacking.
Top five Litecoin markets.
- This is the world's number one cryptocurrency broker in the market today. The main objective of establishing the platform was to trade Bitcoins. However, it has since grown to become the best market for other top cryptocurrencies including Litecoin. It has a unique UI (user interface) that makes it very easy even for new Litecoin traders.
- Notably, cryptocurrencies have become the soft underbelly for cyber-criminals after it became impossible to attack cryptocurrency networks. Coinbase stands out from other Litecoin markets because all the crypto assets traded in the platform are insured.
- To make trading on the exchange more effective, Coinbase has opened a special branch referred as GDAX that targets those handling high volumes of Litecoin. Another unique thing about Coinbase is that it allows users to buy LTC with credit cards and bank transfers. These have been cited as the main reasons for more people preferring it compared to other markets.
- This is one of the top cryptocurrency exchanges in the market that mainly supports European residents, US, Canada, and Japan residents. It was started in 2011 and offers great liquidity. As a regulated exchange, the market requires users to undergo complete by providing details such as date of birth, full names, proof of address, and phone numbers.
- The market has won the affection of most traders because of its low fees. You are only charged between 0.16% and 0.26% in fees for using the market. However, many people have complained about the difficult to use UI (user interface) that makes Kraken less ideal for new traders. This market is considered great for people who understand the cryptocurrency market well and that want to trade in a lot of LTC.
- CEX.io is probably the most diverse and advanced Litecoin market available to users today. Its presence in most countries across the globe makes it a great option especially for those who are entering the crypto world. In addition to charging a very low fee, CEX.io has also earned a great reputation for being extra secure with users funds.
- If you are a Litecoin user who wants to buy using direct transfers, credit cards, and other cryptos, this is probably the best option you can get out there. It makes buying LTC easy, fast, and fun. If you are new to cryptocurrencies, this is a great place to start and grow.
- One distinguishing characteristic of cryptocurrencies is their anonymity. Most people want the sense of anonymity they have with specific cryptocurrencies such as Litecoin to be extended to the exchanges. However, this is rarely possible because the exchanges are licensed by local authorities that demand complete verification. One outstanding thing about ShapeShift that has made it win great following is allowing users to open and run accounts without providing a lot of details.
- More people also prefer using ShapeShift because it allows them to trade in multiple cryptocurrencies, the charges are low, and has a great user interface. Whether you are new or has been in cryptos for some time, this is a great place to start. If you select a Litecoin wallet such as Jaxx and exodus, ShapeShift is available as an inbuilt feature.
- The biggest shortcoming of this market is its limited methods of payment. You can only buy Litecoin using other cryptocurrencies because the market does not allow fiat currencies. For those who want to use cash or credit card, trading at ShapeShift would require them to start from other exchanges that accept such payment to buy Litecoins and move them to ShapeShift.
- If you have been in the crypto world for some time and want to trade Bitcoin or other altcoins for LTC, a great market to consider is Changelly. Though it is relatively new, its design is unique, and it accepts payment in most altcoins.
- You will like the market because it allows users to trade in any amount and registering with only the personal email address. Besides, they are also very fast, ensure that the transactions are completed within a very short time, and do not hold altcoins for clients. Once a transaction is completed, they move it to your wallet. As one of the fastest upcoming markets, many people consider Changelly to be a great place to trade most cryptos fast.
Value of Litecoin
Since its establishment in 2011, the value of Litecoin has grown from strength to strength. However, it is in 2017 that it shot to fame by reaching the top five cryptocurrencies in the market based on market capitalization. Litecoin value has grown with more than 8,000% in 2017 alone.
At the beginning of 2017, the value of Litecoin was only $4. This price grew rapidly to more than $300 and a market capitalization of $18,047,933,433 by the end of the year. In November alone, Litecoin grew by approximately 400%. Many people have attributed this growth to the success achieved in Bitcoin. But Litecoin lead team has been working extra hard to strengthen the core code, make it extra secure, and guarantee higher stability.
The fast growth of Litecoin alongside Bitcoin and other altcoins such as Ether, DASH, and Ripple has demonstrated that the growth will take longer. If you are considering investing in the crypto world, Litecoin is indeed a great option. The network is stronger, more reliable, and secure. Its enthusiastic team has demonstrated the commitment to take the altcoin to the next level. Therefore, even if you might be targeting the most valuable cryptocurrency, do not place all eggs in one basket, Litecoin is equally great.
Is It Profitable to Invest in Litecoin?
In the past, many people considered investing in the real estate to be the most profitable thing. Today, things have changed so much. The most profitable venture to consider is not forex or even real estate, but cryptocurrencies. However, there are so many cryptos in the market that users can consider. One of the top cryptos in the market is Litecoin. But is it profitable to consider Litecoin? The value of Litecoin has been growing rapidly, and it is, therefore, no doubt one of the greatest cryptos to invest in.
- Litecoin has demonstrated capacity to grow and outdo other top cryptos
- When people invest in cryptocurrencies, they want the assurance that such investment can grow rapidly and give higher ROI (return on investment). Since its inception in 2011, Litecoin has demonstrated the capacity to grow progressively. When it was designed, more people saw it as an alternative to Bitcoin because it used the same core code but with some adjustments. Though it still trails Bitcoin value from afar, many investors and experts have indicated that it can rise and become a major investment.
- More companies have come to support Litecoin
- Since its inception, more companies have come out to support the operations of Litecoin. The acceptance is an indication that Litecoin is growing in popularity and will continue being profitable. However, there is a feeling that other newer cryptocurrencies such as Ripple are taking over and could outdo the current top performers including Bitcoin and Ethereum. It is important that Litecoin continues seeking more cooperation with big companies especially those that command a lot of following.
- The Litecoin lead team is very enthusiastic
- While other cryptocurrencies such as Bitcoin prefers to keep the lead team and founders completely anonymous, it is different with Litecoin. The Litecoin lead team is very enthusiastic about bringing new adjustments and making the entire network highly profitable. This means that the current price trend is likely to continue growing in the years to come.
- The fast-growing global appeal
- About 9 years ago when cryptocurrencies debuted, very few people wanted to be associated with them. In fact, it was very difficult to attach a value to initial cryptos such as Litecoin and Bitcoin. However, the potential of blockchain technology has made people to understand that cryptos can be used positively almost in every area. Now, the growing interest has demonstrated that more people are likely to continue joining Litecoin network, buying LTC, and growing the network.
Where to Spend or Use Litecoin?
Where do I spend my Litecoins? This is the question that mainly follows a successful mining activity or after getting some litecoins sent to your wallet. Indeed, one of the main reasons that a lot of people have failed to join cryptocurrencies is the inability to use different coins directly.
Litecoin has been working extra hard to ensure it is accepted in many places. Though its acceptance is not as high as Bitcoin, you can still make direct payment to the following stores.
- Benz and Beamer (an auto dealer).
- KnCMiner (a mining hardware and equipment platform).
- eGifter (a gift-giving site).
- Sean's Outpost (a homeless outreach center).
- Ellenet (a film and multimedia production firm in Australia).
Note that though the stores that accept direct payments in Litecoin are few, users still enjoy more shops because they can easily convert Litecoins to Bitcoins. For example, if you have a wallet such as Litecoin Core, it has ShapeShift inbuilt in it to help make prompt conversions from Litecoin to Bitcoin. Therefore, when you see a store that allows Bitcoins for payments, simply convert the LTC to BTC.
Can Litecoin Grow to Become a Major Payment Network?
Yes, Litecoin can grow to become a major payment network. As more users rush to cash in on the fast-growing popularity of Litecoin, there is no doubt that its popularity is growing rapidly. But can it grow to become a major payment network? While Litecoin lags behind in value compared to Bitcoin, it can still grow to become a major payment network.
Lee, the Litecoin founder, was categorical that the target of the network was to enhance payment services. He wanted a more secure and reliable model than Bitcoin. By reducing the block time from 10 minutes exhibited in Bitcoin to 2.5 minutes, it means that people can now complete transactions faster. More companies especially those operating e-commerce stores are now preferring Litecoin and other cryptos that complete transactions faster.
Litecoin has been seeking cooperation with other companies that can help to make payment easy, direct, and reliable. Of particular consideration is the Lightning Network that makes it possible to complete thousands of transactions in just under one second. The cooperation brought Litecoin closer to other companies such as Visa that handle a lot of transactions every second.
Litecoin has trained its focus mainly on payment. This means that the lead team is able to only work on better features and enhance payment in the network. For example, Ethereum has to deal with apps development and smart contracts which could compromise its ability to enhance the network’s efficiency as a payment network.
While the road ahead has a lot of potential for Litecoin, its capability to achieve the objective is dependent on a number of factors. First, Litecoin as a payment network will be dependent on the ability to bring more companies on board. For example, Ripple has risen very fast because of partnering with banks. If Litecoin could work on such cooperation, it could shoot to the top payment network within a very short time.
The ability to stay completely secure amidst emerging security threats will define the ability of Litecoin to become the payment network of choice. Whenever a cryptocurrency is hacked, its users lack trust and move away in droves. If Litecoin can maintain top-notch security for its network, it can progressively grow to become a great payment network.
How Does Litecoin Work?
The arrival of blockchain technology pointed at the new method of addressing almost every issue in the globe today. Like Bitcoin, Litecoin was aimed at helping to make sending funds from one point to another easy, cheap, and prompt. Here is a clear account of how Litecoin works.
As we look at how Litecoin operates, it is crucial to interweave the core tenets of running a blockchain model. Lee, like Bitcoin founder, was very concerned about the inefficiencies that characterized the local baking system. Instead of using a central authority such as banks that send money to the target client on your behalf, Litecoin operates on a peer-to-peer basis. Note that the litecoins live on the network only. Indeed, do not be cheated by the gold like images of Litecoin.
The Litecoin public ledger
For people who are new to Litecoin, the first step is getting an appropriate wallet. This is the location where all the LTC that you either mine or receive as payment will go. You will also need the wallet to start mining.
Litecoin works as a public ledger. This means that the network is made of many individual chains of blocks that are carefully arranged chronologically. When you initiate a transaction, it is taken up by nodes/miners spread in the network who confirm the details before adding them as a block. The miners who are spread in the network have to find answers to mathematical puzzles when confirming transactions. The first to confirm the puzzles is the one who includes the transactions and adds a new block to the network.
To keep the miners motivated, they are rewarded with 12.5 Litecoins for every block confirmed. This is the main strategy that Litecoin is using to release the 84 million coins created at inception.
Unlike the centralized networks that are owned by specific persons and governments, the Litecoin network is owned by those in the system. This means that you own the network if you are a miner, uses the network to send cash, or simply buy LTC to hold.
Does Litecoin Use Blockchain Technology?
Litecoin uses blockchain technology. The blockchain technology used in Litecoin is similar to that in Bitcoin. Lee explained that he actually used Bitcoin Core Code but added some changes to address a number of flaws in Bitcoin.
The Litecoin technology uses an alternative hashing algorithm referred as Scrypt compared to that in Bitcoin called SHA-256. Lee wanted to simplify the complex SHA-256 hashing function and democratizing the mining process.
Litecoin blockchain technology also makes it possible to handle more transactions. In Bitcoin, transactions are consolidated into a block every 10 minutes while Litecoin only requires 2.5 minutes. This means that users on the Litecoin network are able to enjoy faster transactions. When Litecoin incorporated Lighting Networks in its system, transactions can now be completed in under one second.
The blockchain technology used in Litecoin means that any user is free to join and become part of the network. In fact, the strength of the network is its users. All that you need is an appropriate Litecoin client to help confirm transactions, add new blocks, and advance the network to the next level.
Since its inception, Litecoin has released a number of updates to its core code. The latest core update in 2017 was the Litecoin 0.13.3. These are the blockchain adjustments that respond to issues that emerge in the way such as security challenges, bugs, and embedding new features. It also helps to integrate new parties such as ShapeShift that helps to make trading and using litecoins easy and direct.
One of the main methods of getting Litecoins is through mining. However, the Litecoin mining industry is less developed compared to Bitcoins. Since Litecoin utilizes a different proof-of-work function, most Bitcoin miners are unable to mine Litecoins.
How does Litecoin mining work?
Like Bitcoin Mining, Litecoin utilizes the proof-of-work algorithm that makes mining expensive in terms of energy and time requirements. Every time that a client initiates transactions, the details have to be included in the block. Miners in the network help in verifying the transactions using proof-of-work. They check all the incoming transactions and compare them to previous ones on the network.
If there are no indications of double-spend, the miner creates a block that captures the new details and adds a new block to the network. The new block is sent to all the nodes that continue to verify and transmit the transactions in the Litecoin network.
Miners in the network run the block's unique header metadata by utilizing the hashing function to alter only the nuance and creating the anticipated impact. The target is ensuring that a miner is the first to confirm the block by solving the complex puzzles generated by the Litecoin system.
As indicated earlier, Litecoin mining requires a lot of power (electricity) and time. This means that it is not cheap in any way. A reward is paid to miners who confirm and add every new block to the network. This reward is an incentive and also used to release the 84 million LTC created when Litecoin was founded.
The Litecoin mining difficulty
One of the major advantages of cryptocurrencies is that coin supply can be programmed and distributed at specific intervals. The Litecoin mining difficulty is one of the cryptocurrency's greatest features. It is updated depending on the entire network's hashing power to ensure that a new block is generated every 2.5 minutes.
Unlike Gold and Silver whose mining can easily be influenced by price, Litecoin rates cannot be influenced by its value. If more people are mining LTC at a faster rate, the difficulty is adjusted upwards so that the rate of new blocks addition is maintained. Like Bitcoin, Litecoin proof-of-work algorithm adjusts the difficulty every 3.5 days or after 2016 blocks are created.
Litecoin mining profitability
The mining profitability depends on the mining hardware you are using. In many cases, the higher the hashing power you have, the greater the profitability. To establish the profitability of mining Litecoin, consider using the Litecoin mining calculator that factors your hash power, hardware efficiency, and electricity costs.
When Charlie Lee created Litecoin, he essentially copied the Bitcoin core code but implemented a number of changes. Lee wanted faster-confirming blocks and, therefore, went for 2.5 minutes as opposed to the 10 minutes required to add new blocks to the Bitcoin network.
Lee also created block rewards that halves after every 840,000 blocks are created (approximately every 4 years). Initially, 50 Litecoins were awarded for every mined block. The first halving took place in 2015 (this cut the reward of 50 LTC to 25). The next halving is expected to take place in 2019 when the reward will halve from the current 25 Litecoins to 12.5 LTC. However, the reward becomes very small at the end such that only 84,000,000 litecoins will ever exist in the Litecoin network.
Three steps to start mining Litecoin
If you are new and want to start mining Litecoin, here are three main steps to follow;
- Acquire an appropriate Litecoin wallet. This is the location where all the LTC you hold will go. You can also use the wallet to store other LTC sent to you or bought at the exchanges.
- Acquire and install Litecoin mining hardware. In 2014 the first Scrypt ASICs mining rigs were released. Since then mining Litecoin directly is only profitable with ASICs.
- Install appropriate Litecoin mining software. You could consider using the Litecoin Core or Electrum-LTC that also doubles as cryptocurrency wallets. You can also use the GUIMiner-scrypt that makes mining easy and direct.
- Joining an appropriate mining pool. While you can still mine and make a lot of LTC on your own, the ever-rising mining difficulty makes the process very hard. A better way is joining an appropriate mining pool that allows users to consolidate the hashing power and raise the possibility of confirming transactions.
- The secret to success when using a mining pool is the ability to pick the right team. Make sure to carefully review the terms and conditions, reputation and its members. It is crucial to particularly focus on the mining reward flow-chart between the pool and your wallet. The pool should make it easy for members to get their share without restrictions.
- You should be extra careful when selecting a pool to avoid scammers. Many pools being advertised today are actually scammers that want to utilize your hashing power and steal your LTC. Therefore, carefully review every pool before making a decision to join and become part of it.
What Are the Advantages of Litecoin?
Since the entry of blockchain technology in 2008, more people have joined this fast-growing niche. They indicate that the cryptocurrencies provide a unique sense of freedom that cannot be realized elsewhere.
When Bitcoin was launched in 2009, many people viewed it with a lot of suspicion because of concerns for legality, anonymity, and association to scammers. Now, newer cryptocurrencies such as Litecoin are providing great solutions to issues and flaws identified in Bitcoin. Here are the core advantages of using Litecoin.
Litecoin is fully anonymous
Just like your bank account details are only known to you, Litecoin targeted taking this anonymity to a whole new level. Unlike in a bank where a lot of people including your payee, bank staff, and immediate authorities who can easily pull out your details, it is different in Litecoin.
All the users’ details are kept fully anonymous. The details used when registering your wallet as well as core info about each transaction are completely encrypted. This means that no one can know who you are. The enhanced privacy in Litecoin has made a lot of people join because they can convert their funds into LTC and store in the network without ever worrying that other users or even authorities will notice them.
Litecoin is more than just an alternative cryptocurrency
When Charlie Lee founded Litecoin, his main target was probably to come up with another type of digital currency. But Litecoin is more than that. It is a great investment and a unique source of income.
You can join the network to buy LTC and wait for them to gain value over time. For example, those who bought LTC a couple of years back and held them, they are now reaping handsomely. For others, this is a unique investment opportunity through mining. You only need to have the right equipment to start mining LTC.
The faster and freer way to send funds across the globe
Sending money abroad has always been a concern. Banks ask a lot of details, take long to process, and even longer to send the cash. Now, even the newer methods such as credit cards have become the target of cybercriminals, attract very high fees and even penalties for small mistakes. This is why Litecoin is the ultimate solution for faster and free sending of cash from one point to another.
Because the payments in Litecoin are peer2peer, it has become possible to clear all the challenges such as banks being closed after 4 pm and at night, on the weekends, and even holidays. It does not matter what time it is; your wallet is always open to receive or send funds. What a freedom?
The surest way to secure funds with little worry of third-party seizures
If you have cash in a bank today, a court case can easily come knocking on the door and all the funds get frozen. This is not all. You can even lose such funds if proven guilty. Now, Litecoin is the new way to ensure that your funds are free from seizure by third parties. Your identity is completely anonymous, and no one can tell the funds belong to you. Therefore, do not leave all the savings stashed in the local bank where they are vulnerable, join Litecoin and enjoy special safety from third party seizures.
The cheapest way to send money
Whether you are sending cash from New York to San Francisco or even London to Hong Kong among other destinations, Litecoin is among the cheapest options. When you compare the cost of sending cash using Litecoin network with banks, the cryptocurrency helps to cut the fee by a huge margin. Indeed, Litecoin is also cheaper to send funds compared to other cryptocurrencies such as Bitcoin and Ethereum.
The easiest way to trade in cryptocurrencies and fiat currencies
For many people, forex trading has always been an uphill task. Because the central authorities primarily control the fiat currencies, it is very difficult to predict performance over time. However, Litecoin demand, supply, and value are not controlled by any single authority. Rather, users spread own the globe help to drive demand and supply all the time. This means that you can simply follow the trajectory and make the decision whether it is a great crypto to trade in the crypto market.
The users own Litecoin
While it is true that Lee Charlie created Litecoin, he ceased to own it the moment the protocol was activated. Users in the network own and control Litecoin. It is a great pride to know that you own and controls the network. When you but a few LTC or mine them, you become part of the Litecoin family that everyone looks to for growth and success.
The cryptocurrency is growing rapidly
The first few years of Litecoin saw the cryptocurrency growth being extra sluggish. In fact, some even compared it to Bitcoin that was making bigger strides. However, the dedication of the Litecoin team that has been updating everything has ensured that the system is extra secure, more stable, user-friendly, and reliable. This is what has made the cryptocurrency to enter the current phase of rapid growth.
What Are the Risks of Litecoin?
While the value of Litecoin has been growing rapidly in the recent past, there are still a lot of risks associated with it. As a cryptocurrency, the risks that face Bitcoin and other altcoins still come into play when it comes to Litecoin. Here are some of these risks.
- The cryptocurrency technologies are very new
- Litecoin entered the market in 2011. These years that it has been in operation are still a very small timeframe to gauge the strength of the network against major tides. Other networks such as Ethereum have faced huge disasters such as the DAO attack that almost brought it to the knees. Recently, Bitcoin was forced to implement two forks that split the cryptocurrency into three; Bitcoin, Bitcoin Gold, and Bitcoin Cash. There are numerous concerns that Litecoin systems are still not strong enough and it could end up facing similar challenges. The secret to operating safely in the Litecoin network is spreading the risk to different cryptos.
- All transactions in the Litecoin network are irreversible
- When a transaction is completed in the Litecoin network, it cannot be revered. This is a great risk because human beings can easily err. However, whether you were paying for services, electronics, or buying new LTC when the mistake on the payee address was mistaken, the funds are gone forever. To address this risk, you must always double or triple-check the address to ensure that only the correct one is added before sending Litecoin.
- There is no one to handle issues that may arise in the network
- While Charlie Lee is the founder, he ceased ownership of the Litecoin Core the moment it was activated. Now, everything is done though consensus. If you have issues with the network, there is no one to complain to because Litecoin is owned by users. This means that you have to be content with the system the way it is or simply move on to another cryptocurrency. In many cases, developer team only releases new updates to help make the network better and more reliable as opposed to directly handling clients’ issues.
- There are no regulations to guide Litecoin operations
- Though many people argue that the current operating environment of cryptocurrencies is the best because there are no regulations, it is a huge risk to users. Even if people have developed trust in Litecoin and other big cryptos such as Bitcoin, the fact that the teams behind these networks are mysterious creates a lot of suspicion. Have you ever thought what would happen in the event that you wake up and find the Litecoin is no more? Because there are no regulations such as those that guide banks to protect clients' deposits, the danger of losing everything that has been gained for years still looms.
- The acceptance of Litecoin as a means of payment is still very small
- Though Litecoin has been in operation since 2011, the fact that only a handful stores accept it as a means of payment is worrying. Many people have been wondering when they will start paying for water, electricity, school fees, and other products in Litecoin. While it is true that some progress has been realized, there is no doubt that Litecoin has a long way to go for higher acceptance levels.
- The danger of losing your coins
- Unlike the fiat currencies in notes and coins, LTCs are only held in cryptocurrency wallets. The private and public keys in the wallets can easily be lost either through hacking, loss of the phone, or formatting the computer drive. A lot of hacking cases in top exchanges have demonstrated how vulnerable people's coins are especially when trading on different cryptocurrency markets.
- The Litecoin value is subject to regular fluctuation
- Recently, many people have come to appreciate the crypto niche because of the fast-rising value of top cryptos especially Bitcoin, Litecoin and Bitcoin Cash. However, this demand and growth are subject to numerous factors that make it impossible to predict the future of LTC. For example, the emergence of other cryptos, the motivation of the Litecoin team, and regulations can easily affect the value of LTC in either positive or negative way. Therefore, do not invest what you cannot afford to lose.
- Emerging cryptocurrencies
- When Litecoin was established, Lee wanted to provide solutions to flaws that were noted in Bitcoin. Now, this has become the trend. Every new developer is rushing to the crypto world to create new cryptocurrencies. This puts Litecoin at risk in two ways. One, the new cryptos are likely to eat into its market share. Two, the emerging cryptos are likely to improve on the Litecoin technology. This means that more users are likely to go for the more effective newer cryptos compared to Litecoin.
- The looming regulation
- Many governments see cryptocurrencies as a threat to their existence. Because Litecoin is a peer-to-peer network, it means that users are free to send cash from one point to another without requiring third parties such as banks. Governments see this as sabotage because of the risk of job losses, bank closure, and limited revenue generation. Therefore, the looming regulations are likely to hit Litecoin hard as governments try to reign and avoid ceding one of their key pillars to economic growth.
Even as Litecoin emerges as a great option for people who want to enter the cryptocurrency world and grow rapidly, these risks threaten to wipe off any gains. It is, therefore, crucial to enter and apply the best practices to mitigate the risks. These include not draining all the cash from the bank to buy Litecoin, acquiring multiple cryptocurrencies, and staying apt to trade when sure of making the highest returns.
What Happens if Litecoin Gets Lost?
When you buy or mine some LTC, the risk of loss is always looming. You could lose the phone with the wallet, the exchange of choice can get hacked, or the LTC can be sent to wrong address. What actually happens when Litecoin gets lost?
As a digital currency, Litecoin can only reside in the Litecoin network. This means that in reality, what users lose are the Litecoin wallets and private keys. If you lose the wallet and the keys, and cannot be able to recover them, the chances are that the Litecoin stored there are lost forever. This loss means that the coins will always be in the network but on a dormant state.
For those who lose their Litecoin to thieves such as hackers or sending to the wrong address, it means that the coins have changed ownership. Such coins will still be in circulation but under a different user. This is one of the downsides of Litecoin. Once a transaction has been completed and confirmed, there is no way to reverse it.
To avoid loss of your Litecoin, it is important to be extra vigilant and take care of the wallet. You should also avoid placing all the funds in the same wallet. Try to spread the funds using different wallets and even multiple cryptocurrencies.
The process of regulating Litecoin and other cryptocurrencies has been ongoing for a couple of years. Many governments are committed to regulating cryptocurrencies because they have demonstrated the capacity to change the way economies are run.
When Bitcoin was founded in 2009, the US Federal Bureau of Investigation indicated that the new blockchain technology could open a new way to fund terror. Now, every cryptocurrency including Litecoin is looked at with suspicion. But most countries have had issues with how to deal with cryptocurrencies because of the involved complexity.
However, creating a Litecoin and cryptocurrency regulation is being seen as a four-pronged model. Many countries want to enjoy the benefits but do not anticipate a situation of their currencies being replaced.
- The desire to be part of the technology advancement
- One, the blockchain technology represents some of the best advancements to have ever been realized in history. Think of the Litecoin’s Lighting Network that makes it possible to send funds from Zurich to San Francisco in under one second. It is revolutionary. Therefore, in as much as the US administration would want to nip the cryptos growth in the bud, it does not want to obscure tech success.
- Leveraging growth in their jurisdictions
- For years, countries that have demonstrated the capability to lever tech advancement have always grown faster compared to their peers. In the US, Hong Kong, Singapore, and South Korea, it is technology that supports economic growth compared to other sectors. Now, here comes blockchain technology that promises to catapult businesses to the next level. To the larger Litecoin community, it is not that the countries where Litecoin, Bitcoin, and other altcoins that have flourished cannot be regulated, but the desire to be the first to reap associated business growth benefits.
- Working with cryptocurrencies to redefine services delivery
- Many governments are forced to play catch-up when it comes to cryptocurrencies. For the last five decades, the big data has become a very complicated issue. A lot of data is generated through research, social media, academics, and other avenues. Storage, analysis, and making meaning of all the data is a great problem for governments. Now, enters the Litecoin and cryptocurrencies that makes data storage, retrieval and use as easy as a click. This looks like what everyone has been waiting for.
- The governments have seen blockchain technology as a great way to redefine how services are delivered. The only question has been how to apply it? For example, it is thought that China is working on its own version of cryptocurrency to reap the huge benefits that come with blockchain technology.
- An idea whose time has come
- From Israel to Sweden and Brazil, businesses are always proactive in looking for ways of cutting costs. The regulations seen in the pipeline have, therefore, to contend that blockchain technology is an idea whose time has already arrived. This means that whether governments like it or not, Litecoin and other networks are here to stay. The regulations that will be passed can only point to some sections such as paying taxes and not delimit application.
- Just like other technologies, it is important to appreciate that at the end of the day, regulations will come. In Russia, the government has indicated it could force cryptocurrencies operating from there to pay taxes. However, how the regulation thing unfolds in the coming months or years will be an interesting thing.
Is Litecoin Legal?
For the years after 2009 that cryptocurrencies have existed, their legality has become a hard nut to crack for many administrations. Most governments look at Litecoin and other cryptos with a lot of suspicion. However, passing legislation that controls the cryptos operations has been a great challenge. Here are some logistical issues that hinder legislating Litecoin.
- Litecoin is not owned by any one single individual.
- The technology involved in Litecoin changes over time.
- New cryptos are entering the market at a swift rate with different products.
- Not all cryptos target facilitating direct payment. Some are simply aimed at motivating users.
- The technology has proved to bear a lot of benefits that can be applied to multiple niches. Therefore, you cannot simply nip its advancement.
With these considerations, there is no single legislation passed anywhere in the globe to control Litecoin. This means it is legal. In 2017, the growing popularity has made some administrations to air their concerns and indicate their reservations. Let us look at the legality of Litecoin by jurisdictions.
- The USA
- One of the nations where Litecoin has a lot of users is the US. The US federal authorities have been concerned that the fast proliferation of Litecoin and other cryptos could easily become an avenue for scams and funding criminals such as terror. Despite these concerns, there is no piece of legislation that guides use or trading in Litecoin.
- The only authority that has come out to talk on Litecoin is the CFTC (Commodities futures trading commission). CFTC has indicated that all cryptocurrencies should be treated as commodities. The Litecoin community was thrown into a mix when this announcement was made because it had all along thought that everything on the network was completely anonymous.
- To put it differently, the classification of Litecoin as a commodity means that any gain should be treated the same way you treat benefits from other commodities such as real estate. This means that the returns should be subject to capital gains tax.
- Litecoin use in China is legal. China is one country that has been very vocal and seemingly focused on quashing Litecoin and other cryptocurrency growth. The Chinese administration does not take it kindly to technologies and advancements that target crippling its capability to collect more taxes. It is because of this that ICOs (Initial Coin Offerings) were banned in mid-2017. However, there is still no legislation in China to guide cryptocurrencies use. The country has indicated that it will not hesitate to ban a cryptocurrency completely if its network is proven to facilitate scams and criminal activities.
- Russia appears to be the first country willing to jump into regulating Litecoin and all cryptocurrencies. Though there is no legislation at the moment and Litecoin remain legal in Russia, the Deputy Finance Minister has indicated that they might criminalize payments in cryptocurrencies. He has also indicated that they are in advanced stages of ensuring that all cryptocurrencies that operate in Russia are subjected to taxes.
- The European Union
- In the EU, Litecoin is legal. Like the US and China, there is no piece of legislation that has been passed by the EU parliament or individual countries that can guide the operation of Litecoin. In one of the rulings by the EU Court of Justice, Litecoin and other cryptocurrencies should be seen as a virtual currency. The court expounded that they should, therefore, be exempted from VAT.
- Notably, EU approach to Litecoin, Bitcoin, and other altcoins is considered positive compared to other jurisdictions such as China and Russia. The EU has appreciated that the blockchain technology is a great advancement that should be leveraged to tap associated benefits. It has even been reported to reach out to some crypto teams such as Litecoin and Zcash with a view of drawing an all-inclusive legislation to help the benefits trickle to more people.
Litecoin and Taxes
When some people join Litecoin network, one of the main thought is that they will not pay taxes. There has been a general perception that Litecoin and cryptocurrencies have become the next tax havens. But is that true?
From the fact that Litecoin operations are completely anonymous and no one can easily tell the number of coins you own or traded, many think that it is possible to evade paying taxes. However, tax experts have advised users to consider a different way of looking at cryptocurrencies. Recently, the US Commodities Futures Trading Commission categorized cryptocurrencies as commodities. This is the single biggest pointer of where the looming regulations are likely to hit.
The best way to remain on the safe side of the law is ensuring you always pay taxes from proceeds of trading in LTC. Ask yourself what would happen if the law compels the Litecoin network and cryptocurrency exchange platforms to provide data of their operations since commencement? The chances are that all those who have made profits trading in Litecoin are likely to be slapped with heavy penalties for avoiding paying taxes.
In Israel, the government has indicated that it is not in a rush to regulate Litecoin. However, any revenue generated through trading or using cryptocurrencies must be taxed appropriately. Well, such declarations are likely to continue hitting the news because many countries tend to follow what economic powerhouses such as the US and EU do.
To remain on the right side of the law, it is important to take a different view of Litecoin when it comes to taxes. In fact, this should be personal. The target should be ensuring you capture all transactions and pay appropriate taxes. No authority will come for you when you remit thousands of dollars after making huge profits trading in Litecoin. Here are some great tips to guide you.
- Ensure that all the transactions involving your purchases and trading in LTC are well captured.
- Make sure that the value of LTC to dollar is clearly noted at the time of any transaction.
- Stay committed to making deductions to the tax authorities when a profit is made.
- Consider working with a tax expert to craft the most effective method of meeting all tax obligations.
- Follow the government regulations carefully to understand the progress and possible new obligations that might be added to users.
Does Litecoin Have a Consumer Protection?
Concerns have been raised over the years about lack of consumer protection in cryptocurrencies. When you make a transaction in Litecoin and miss the address, the loss is permanent. Even if you have an issue with the network, there is nowhere to get redress. The main question is, does Litecoin have a consumer protection?
Litecoin, like other cryptocurrencies, does not have a direct entity that is responsible for customer protection. In Litecoin, users are responsible for their own protection in the network. From transactions to decisions, everything is done through consensus. At this point, you need to rethink the whole notion of Litecoin formation. When Charlie Lee started the network, he let go the ownership to the entire cryptocurrency.
Though Litecoin does not come out to proclaim it in the open, two entities handle customer issues indirectly. The first is the Litecoin Foundation. The foundation does not have a direct relationship to Litecoin, but it indicates that it hires developers to continue improving the network. In fact, they even run regular fund raiding to get money for the lead developers.
The second level of consumer protection is the Litecoin Lead team. This group, just like the foundation, does not put to claim the space. However, the lead team is responsible for regular updates that address key flaws such as bugs, security risks, and including new features. This team is believed to be one responsible for regular adjustments and protection of the core code.
As a user on the Litecoin network, it is important to know when it comes to cryptocurrencies; there is neither regulation nor government to run to. At the moment, no country has come out to draw a clear legislation that can guide the use of cryptos. Therefore, you must take it personally. This means ensuring you always keep the cryptos in cold storage, protecting the Litecoin wallet carefully, and only picking the exchanges with a good reputation.
Illegal Activities with Litecoin
When cryptocurrencies entered the globe, one of the main concerns was the risk of use of being used for illegal activities. As a fully anonymous cryptocurrency, Litecoin is considered a great network by criminals and scammers because they cannot be found after defrauding their clients. Here are some reasons why cybercriminals could easily use Litecoin.
- The transactions are completely anonymous. Because all transactions are encrypted, there is no easy way that criminals can be found.
- Once transactions are done, there is no way that the LTC can be recovered. This makes the network a rich target for Ponzi schemes.
- The network lacks a clear consumer protection. Because Litecoin users on the network own the network, there is no one to report to in the case of fraud or even scam.
Despite these pointers that indicate fraudsters can easily exploit Litecoin, no case of illegal activity has been reported so far. This can be attributed to the thorough confirmation procedure that only allows users use the coins they own.
Is Litecoin Secure?
Litecoin is one of the most secure altcoins out there. The Litecoin team has dedicated its efforts towards identifying flaws in other networks and ensuring that its network is free from intruders. The high-security level of the Litecoin network has been the main reason for its rapid growth in value. The security of Litecoin network is guaranteed in three ways.
- Encrypting all transactions: The first layer of security in Litecoin network is through encryption of all the transactions. This means that any transaction detail such as amount, balances, and personal info like name is encrypted. Therefore, even those involved in confirming transactions will never come to know about your details.
- Using a consensus algorithm: Every transaction on the Litecoin is confirmed though proof-of-work algorithm. Nodes spread in the network must agree to allow or disallow your transaction to proceed.
- Releasing regular updates: Since its inception, the Litecoin network has undergone through regular updates. The lead developer team helps to identify key flaws and ensure they are fixed promptly to prevent the risk of intrusion and hacking.
Is Litecoin Anonymous?
The main target of Litecoin is ensuring that all the transactions in its network are completely anonymous. The peer2peer system of Litecoin target is ensuring that only the sender and the receiver know about the transaction. This anonymity has made Litecoin a great option for users who want to operate without chargebacks. Let us take an example here. If you want to buy an item, but the seller only prefers clients who ascribe to his principles, there is no way he can follow back to know your background. Therefore, the trader cannot decline payment.
When transactions are initiated, Litecoin network encrypts every detail. Even the miners who confirm the details of the transaction cannot know what they contain. But this goes beyond mining. The people who might be interested in tracking you down cannot narrow down to the details of the transaction.
Though Litecoin is indeed anonymous, it has emerged that it is still possible to figure out those involved. As a public ledger, the transaction leaves strains of records that can still be stitched together to establish the identities of involved people. However, such work requires a lot of knowledge in computing.
Has Litecoin Ever Been Hacked?
The Litecoin protocol runs every transaction in a highly encrypted manner. Since its establishment in 2011, a lot of hacking attempts have been made. In the first few years of Litecoin (2011-2014), the cryptocurrency space was characterized by numerous hacking attempts, especially on different exchanges.
Litecoin lead team that comprises of top software engineers, financial experts, and security analysts who ensure that they regularly review the security of the network. Their efforts have borne fruits because Litecoin has never been hacked.
When we indicate that Litecoin has never been hacked, it is important to differentiate the difference between Litecoin network, Litecoin wallets, and Litecoin exchanges. The main Litecoin network has never been successfully hacked. However, Litecoin wallets and exchanges that are managed by third parties use different protocols that could be targeted, and successful hacking initiated. Therefore, if you hear a person reporting that his wallet was hacked and LTC got stolen, it is because of individual security levels and not necessarily the problem of Litecoin.
Even as Litecoin works extra hard to ensure that your LTCs are always safe, you must also play your part. This means ensuring you are only working with the best wallets and top notch cryptocurrency exchanges. You have to vet every party involved in moving or holding your Litecoins.
How Can I Restore Litecoin?
While anonymity in Litecoin is considered a great advantage, it also carries one of the greatest risks. Many are the cases when people cry that their LTCs have been lost. Here are some of the methods that you can use to restore lost LTC.
Some of the things that can cause loss of LTC mainly involve losing the entire wallet. Your wallet can be lost through theft of the phone or computer with the installed Litecoin wallet. A loss can also occur through hacking or even sending LTC to a wrong address. Note that the last two types of losses (hacking and sending to wrong addresses) are irreversible.
Today, many wallet services providers ensure that users have a way of recovering their lost private keys in case of loss. For example, Ledger Nano S, Trezor and Coinbase provide users with a unique seed code to help regenerate the private and public keys. In the event of a loss, all that you need is getting another wallet and using the seed phrase to generate the keys and reconcile with Litecoin to get the coins back.
For those who use older wallet versions, it is your role to ensure that a backup is carefully maintained all the time. For example, some people opt to acquire hardware wallets in pairs and store them safely under lock and key all the time. You will only need to plug the wallet and reconcile with the Litecoin network to restore lost LTC.
To reduce the danger of clients losing their LTC and being unable to restore them, some web-based wallets opt to manage the keys as opposed to releasing them to clients. This means that they operate just like a personal email. If you lost LTC and was using a web-based wallet, you will need to answer a number of security questions for restoration.
How to keep your Litecoin secure all the time
To avoid losing your Litecoin, it is important to be extra careful with the wallet. The focus is following the best practices that target keeping the wallet, your computers, phone, and other associated devices safe.
- Always access the wallet from one computer. Consider designating one PC for LTC related transactions only.
- Make sure to select the best wallet that provides good backup and recovery services.
- Do not share the private keys with anybody.
- Keep your Litecoin core and computer operating system updated all the time.
- Make sure to have several backups both at home and away. This is very important especially for those using mobile Litecoin wallets.
- Always triple check the payment address to avoid sending Litecoin to the wrong address.
Why Do People Trust Litecoin?
Over the last few years, more people have come out to demonstrate their support and trust on Litecoin. The emerging demand has made Litecoin value to grown proportionately to that of Bitcoin. As the popularity of cryptocurrencies continues growing, let us dig deeper into the more reasons why more people have this great trust Litecoin.
Litecoin provides an opportunity to own a piece of the network
Unlike banks that makes users passive; the Litecoin network targets making its users feel like owners. As a public ledger, anyone who wants to become part of the network can simply download the client and become part of the system. Many have become revered users who are not willing to leave no matter what. They better work towards facilitating faster growth and success.
The Litecoin network has demonstrated capacity to grow progressively
Just like Bitcoin and Ethereum among other fast-growing cryptos, Litecoin has demonstrated it has huge potential for growth. This has been contributed by the limited coins supply and greater publicity. Its market value has grown from about $1 to more than $300 in under one year.
Very low transaction cost and highly efficient services
When Lee launched the cryptocurrency, he targeted creating a model that was similar to Bitcoin but with greater efficiency. It is this efficiency in terms of speed and low cost of transactions that have won the network greater trust from users.
Making transactions completely anonymous
When people join Litecoin, they want to know and feel that their transactions are completely anonymous. This is what Litecoin has been working on for more than 6 years. When the lead team releases every new update to the Litecoin core code, it makes the network better, more reliable, and stronger.
The Litecoin team is a very enthusiastic group
While other cryptocurrencies have mainly preferred to take a lot of time before addressing emerging issues, it is different with Litecoin. Every time that an issue is reported on the Litecoin network, the lead team and Litecoin Foundation is very prompt to address it.
The founder is a known personality that users can associate with
When people work on investments, they want to be sure beyond reasonable doubt that the direction they are taking is okay. This can only be possible if the lead team in the target investment entity is well known. At Bitcoin, the founder is a mystery. This has created suspicion and even made some investors hold back. But the Litecoin inventor, Charlie Lee is a known personality who even mingles with users freely on social media. This is the connection that has created more confidence and trust in the Litecoin network.
History of Litecoin
Charlie Lee entry into the crypto world
The history of Litecoin can be traced back to 2011 when Charlie Lee (Litecoin Founder) developed an interest in Bitcoin. At that point, another altcoin referred as IXcoin was launched. Lee was motivated by the IXcoin and went ahead to create a new altcoin, Fairbrix. However, Fairbrix performed poorly because of mismanagement.
Fairbrix can be considered the first most important step of Lee’s flirtation with Scrypt as a proof or work algorithm (a major deviation from Bitcoin by 2011). Unlike Bitcoin that uses the SHA-256 hashing function, Litecoin was built on the Scrypt algorithm which at the time made it difficult for ASIC miners to take greater control of mining. This meant that Litecoin could initially be mined using CPUs (although this changed as the value of Litecoin grew). It turned out using Fairbrix code proved difficult because of multiple bugs that prevented the creation of new blocks and coins.
Litecoin launch with a different hashing algorithm
In October 2011, Lee launched Litecoin that used the Bitcoin core code to address the bug problem that arose from Fairbrix. However, Lee created 84 million coins compared to Bitcoin that only created 21 million. At this early stage, Lee and his development team incorporated the scrypt proof-of-work algorithm that was used at Fairbrix to help make mining more democratic.
The main objective of launching Litecoin was that all coins would be released through mining. Besides, the cryptocurrency was designed to have a specific number of coins to help control inflation. The focus was to create a product that was stronger than Bitcoin and define a roadmap for faster growth.
Lee points that he targeted a situation where Litecoin would look complimentary to Bitcoin and not a competitor. By 2013, this relationship came out clearly. Since Bitcoin team was very worried about hard forks in early years, it would reach out to Litecoin for testing because the latter was willing to take risks.
The early upgrades that put Litecoin on the map to becoming the biggest coin
In 2013, the first version 0.8.5.1 Litecoin was released. This version included fixes for vulnerabilities as well as enhancing the network’s security. In November of 2013, Litecoin value experienced rapid growth with a 100% leap which made its market cap hit $1billion.
A month later, December 2013, the lead team released the 0.8.6.1 Litecoin version that targeted reducing the transaction fees and enhancing the system’s performance. This update and another one that was implemented in April of 2014 were considered the ultimate bedrock for Litecoin’s great performance in the years.
In May of 2015, Litecoin had grown to become among the top five cryptocurrencies based on market capitalization. By the onset of October, its value was trading at over $130/LTC. The cryptocurrency is seen as one of the main rivals to Bitcoin because of its close similarity.
Who Created Litecoin?
Litecoin was created by Charlie Lee, a computing engineer who previously worked at Google. But who exactly is Lee?
Lee is a computing engineer born in Ivory Coast, West Africa. He immigrated to the US when he was only thirteen and studied software engineering. After reading one of the Wired articles about the Silk Road black market in 2011, he started developing a special interest in digital currencies. At this point, Bitcoin was in its infancy years.
His interest in Bitcoin grew so much when working as a software engineer at Google. This made him look for one of his friends, Mike Hearn, who worked as a Bitcoin Core developer. Mike also sold him the first Bitcoin. Within no time, Lee was an ardent Bitcoin miner when Bitcoin value was $30.
Speaking to International Business Times, Lee explained that he was fascinated by the idea of blockchain technology. He also started toying with the idea of having his own blockchain cryptocurrency.
Lee wanted to come up with another cryptocurrency that could supplement the benefits of Bitcoin. With time he started grasping the core tenets of operating a cryptocurrency. He even identified key flaws that were making Bitcoin ineffective. For example, he decided to go for scrypt hashing algorithm as opposed to SHA-256 that was used by Bitcoin.
SHA-256 hashing model in Bitcoin required more power and specialized equipment for miners. However, scrypt allows people in the network to use standard computers to mine Litecoin. Since the adoption of Scrypt, Lee and the entire Litecoin team started working on a process of progressive improvement that saw them release regular Litecoin core code updates.
In every aspect, Lee appears to leverage anything that appears difficult for Bitcoin so that users are always flowing from the biggest cryptocurrency to Litecoin. For example, the high value of Bitcoin means that payments which are made as a percentage are still very high compared to Litecoin. Therefore, more people opt to convert their Bitcoins to Litecoins before making purchases.
One crucial contrast between Lee and Satoshi Nakamoto of Bitcoin is that Lee is not an anonymous party. While Satoshi is a mystery, Lee is free even to mingle and even offer interviews on various platforms. It is not uncommon to find Lee chatting with Twitter fans about the network and even having a joke or two. However, apart from agreeing that he opened the network, the Litecoin system belongs to users, and he does not have ultimate control. Everything is done via consensus.