What Is Litecoin? Should I Buy Litecoin? How to Buy Litecoin?
Litecoin (LTC) is still one of the top 5 cryptocurrencies. It is no longer the “silver” to Bitcoin’s “gold” but it still trades very well and still has lots of development around it. Many say Litecoin is worth investing and it is a good long-term cryptocurrency investment. Should you buy Litecoin? First, you need to know what is Litecoin and how to buy it. Read to find out.
Disclaimer: The content below should not be taken and viewed as investment advice, but only information and opinions. This article is for information and illustrative purposes only.
What Is Litecoin?
Litecoin is one of the first altcoins in existence after Bitcoin. It was introduced 2011 (BTC in 2009) and it is almost identical to Bitcoin. So any trust and adoption rate of Bitcoin should bleed over to Litecoin.
Litecoin has a solid team with Charlie Lee (head of engineering at Coinbase) as a founder of the project, who still works on it.
Litecoin is A peer-to-peer network similar to bitcoin’s handles Litecoin’s transactions, balances, and issuance through Scrypt algorithm, the proof-of-work scheme (Litecoins are issued when a small enough hash value is found, at which point a block is created, the process of finding these hashes and creating blocks is called mining).
The Scrypt algorithm used by Litecoin was intended to be ASIC (Application Specific Integrated Circuit) resistant, but ASICs are being developed for it now, eliminating the one quality that differentiated Scrypt from SHA256.
Litecoin is very similar to Bitcoin, but through tweaking to the settings, it is technically a superior algorithm. Although both Litecoin and Bitcoin are quite similar, there are some differences that differentiate both of them.
Litecoin was introduced after miners started using GPUs (graphics cards) to mine Bitcoin. The purpose was to create a coin for CPU mining because GPU mining was seen as a problem by some.
Fans of Litecoin like to call it as “Silver to Bitcoin’s Gold,” as one of the best advantages of Litecoin over Bitcoin is the fast speed of block creation which makes transactions efficient and faster. The miners foresee far more Litecoins will be mined and its blocks are generated 4x faster, making it easier and faster for day-to-day transactions.
Difference Between Litecoin and Bitcoin
One of the main differences between Bitcoin and Litecoin concerns the total number of coins which each cryptocurrency can produce. The Bitcoin network can never exceed 21 million coins, whereas Litecoin can accommodate up to 84 million coins.
Litecoin’s greater number of maximum coins might offer a psychological advantage over Bitcoin.
Although technically transactions occur instantaneously on both the Bitcoin and Litecoin networks, time is required in order for those transactions to be confirmed by other network participants.
Bitcoin makes use of the longstanding SHA-256 algorithm, whereas Litecoin makes use of a comparatively new algorithm known as Scrypt. SHA-256 is generally considered to be a more complex algorithm than Scrypt, while at the same time allowing a greater degree of parallel processing.
Scrypt, by contrast, was deliberately designed to be less susceptible to the kinds of custom hardware solutions employed in ASIC-based mining. This has led many commentators to view Scrypt-based cryptocurrencies, such as Litecoin as being more accessible for users who also wish to participate in the network as miners.
Many new improvements are made to Litecoin. Recently Segwit was activated, which makes transactions even faster. A lightning network is going to be implemented. It seems Litecoin plays a nice guinea pig to improvements about to be made to Bitcoin.
Why Has Litecoin Price Been Flat for Awhile?
In 2015, Litecoin was up 8 times within a month through a Chinese LTC Ponzi scheme that told its investors to buy Litecoin, send to their address and receive “mining returns” through their high yield investment program.
Over $76 million worth of Litecoin has been sent to their Litecoin address. $68 million worth of Litecoin has been spent from the address.
They managed to accumulate at least 20% (nine million Litecoin) of the entire supply. It is obvious now how the price shot up from $1 to $8 in a month. As investors felt “richer” because their “invested” Litecoin was skyrocketing in value, they invested more sums into the scheme.
What happened next was most of that supply was instantly dumped and the LTC/BTC markets have been on a long bear trend since. That is partly why the price of Litecoin has been stable over the year of 2016 and took a relatively long time to go through the consolidation phase, Litecoin lost its correlation to Bitcoin after the summer pump and was left behind during most of the year long BTC bull trend.
Why Litecoin Price Went Up Recently?
Litecoin increased by +500% since the start of the year, this was down to a few factors.
#1 More Trading with Litecoin in China
Due to the recent crackdown by the People’s Bank of China on major crypto exchanges, all margin trading has been stopped and zero fees model has been eliminated. That simply means the only way to make a profit on the spot markets is to buy low and sell high. Traders can no longer short by selling coins they don’t have. If they want to be a participant in the crypto markets they need to own some coins.
Chinese whales will have to devise entirely new trading strategies revolved around the spot markets. Without margin, traders in China can no longer borrow Bitcoin to sell coins they don’t have. This means that the only way to profit off of bull runs is to actually buy and own Bitcoin.
The larger bitcoin bull trend is still intact but likely due for several months of consolidation. Given the choice between Bitcoin and Litecoin, the percentage gains for moving a smaller cap market like LTC can be much higher. Since then, Litecoin has been traded more volume in fiat than again Bitcoin.
#2 Implementation of Segwit
The implementation of Segwit made Litecoin the digital currency with the best technology (in the proof of workspace). It enables much faster and secured transactions.
Most advocates are excited about the new technologies that can now be built on top of a network with SegWit. For example, the Lightning Network, which could boost Litecoin transactions by as much as a million times, can now hypothetically be used to move real money.
Litecoin is the first major currency to do so. In this regard, the silver to Bitcoin’s gold has a competitive edge over its big brother.
As a result of this successful activation, it has reignited excitement altcoins, especially Litecoin. That is why we observed the price started to grow exponentially. Many people feel this “pump” should not have taken place, as we all knew SegWit was going to activate within a specific timeframe.
#3 Availability to Buy Litecoin
LTC was just onboard on many major exchanges such as Coinbase, and other exchanges in Japan & Korea.
With Litecoin (LTC) interest perking back up breaking out of its long-time consolidation slumber, Japanese Exchange Bitbank has officially announced the listing of the digital currency in late April.
Other than that, Bitstamp has just announced that Litecoin fans can now also buy Litecoin on their exchange. The launch was partly the reason why the price went up and got over the resistance levels on all exchanges.
Should I Buy Litecoin?
Litecoin is still one of the top 5 cryptocurrencies I recommend everyone to look at it. It is no longer the “silver” to Bitcoin’s “gold” but it still trades very well and still has lots of development around it.
The acceptance of cryptocurrencies has been extended to governments. Let’s take Japan for instance, a market highly accepting of innovative technologies, recognized Bitcoin on April 1st, 2017. It is also set to standardize blockchain technology.
There is a clear uptrend for the four largest cryptocurrencies (Bitcoin, Litecoin, Ethereum, Ripple) around the time of recognition. Russia is also attempting to legitimize, as it would help the government crack down on money laundering.
The greatest barrier to widespread adoption is acceptance. If you can’t use it to buy a coffee at your local shop or a train ticket at the station, no one will use it. However, Litecoin is going to (being) be adopted by large companies.
Since Litecoin is relatively cheaper than Ethereum and Bitcoin, why not buy “low” now and hold on to it?
There is one golden rule of investing that you should always follow: Never invest money you cannot afford to lose. Investing is not saving. Your first goal is to avoid major losses. Don’t get greedy. Be patient.