While Bitcoin has been making headlines throughout 2017, other cryptocurrencies have been carving out their own share in the marketplace. One of the most promising of the bunch, which also happens to be one of the largest cryptocurrencies on the market today, is Litecoin.
What is Litecoin?
Litecoin was founded in October 2011 by former Google employee Charlie Lee. Like many other cryptocurrencies, it provides a peer-to-peer transaction system that is not managed by any central authority.
“I wanted Litecoin to complement Bitcoin—not compete”, Fortune quotes Lee as saying. “Bitcoin can be used for moving millions of dollars between banks, buying houses, buying cars. (…) Litecoin can be used for cheaper things.”
In other words, if Bitcoin was like gold — a store of value — Litecoin is like silver: a currency created to be more suitable for daily transactions.
Similarities Between Litecoin and Bitcoin
Both Bitcoin and Litecoin’s supply is finite. Bitcoin’s circulation will be capped at 21 million and Litecoin’s at 84 million. This doesn’t mean that once all of the supply is in circulation, you won’t be able to have access to the currency. In fact, based on the supply-and-demand principle, the value of Bitcoin and Litecoin will go up if more people buy into it.
In addition to their supply cap, the two currencies also share the same production process, which is called “mining.” In order to release new cryptocurrency into circulation, the so-called “miners” must take a set of transactions and complete an algorithmic challenge to find a hash of their content.
This hash, which is a long string of numbers, acts like a unique code identifying and verifying this set of transactions, also known as “block”. Once it’s found, the proof-of-work mechanism regulates which valid block is added to the blockchain.
To generate new hashes with the same content, the miners add an integer, called a nonce (“number used once”).
Finding and creating this code is so complex that miners — who could also be considered auditors — are forced to use custom hardware and mining software. Also, only the first miner who solves the nonce challenge will be rewarded with cryptocurrency, which in turn goes back into the system.
The block is then recorded in Bitcoin’s or Litecoin’s “blockchain,” which is the public ledger. As a result of this block creation, more currency is being produced.
Both of the currencies’ blockchain records are transparent and publicly available, which adds an important layer of security as anyone can audit transactions at any time.
Why Buy Litecoin?
There are three core factors that differentiate Litecoin from Bitcoin and they are transaction speed, mining ease, and numeric appeal.
1. Transaction Speed
It takes Bitcoin roughly 10 minutes to create a block and complete a transaction. Litecoin, on the other hand, produces blocks in only 2.5 minutes.
In 2017, Litecoin introduced an even faster way to process transactions called “SegWit,” which stands for Segregated Witness. SegWit essentially introduces blocks that can accommodate more transactions with them. The first SegWit payment was made on May 11th and successfully completed a transaction from Zurich to San Francisco in less than a second.
The speed of transaction definitely secures Litecoin’s status as more of a utility when compared to Bitcoin, and it will likely get the attention of merchants who strongly prefer fast transactions over slower, more complicated ones.
2. Clear Leadership
Litecoin was created by Charlie Lee, who has supervised the development and evolution of Litecoin. Charlie Lee promotes LTC as a complementary cryptocurrency to Bitcoin and not a competitor. More importantly, Charlie Lee has been able to be the face of Litecoin in a way that Bitcoin has never had. As the Managing Director of the Litecoin Foundation, he oversees the development of the Litecoin cryptocurrency which shows a very clear leadership structure for those investing.
3. Merchant Appeal
Bitcoin will cap its circulation at 21 million and Litecoin at 84 million. This means that with more and more people investing in the currencies, at some point goods with smaller price tags will be charged at decimals. A book, for example, ends up costing 0.00009 BTC (Bitcoin).
That’s not a very consumer-friendly number, and it will only become more difficult to distinguish or even understand these decimal price tags. With a significantly larger circulation cap — four times that of Bitcoin — Litecoin prevents this decimal effect from happening anytime soon.
When is the Best Time to Buy Litecoin?
Litecoin has the potential to grow exponentially. In fact, “with a couple of exceptions, Litecoin’s price has toed the line with Bitcoin’s price,” says Investopedia’s Rakesh Sharma. And so far, only 64% of Litecoin’s 84 million coins have been released into circulation, with roughly 30 million to go.
Judging by Litecoin’s growth in 2017 with gains of over 7,000 percent according to Fortune, the time to buy Litecoin, or to start diversifying your cryptocurrency wallet, might be now.
“No one can say how many tokens and coins and blockchain protocols will eventually win out, but the experts seem to think there’s room for a multitude,” Robert Hackett of Yahoo! Finance concludes.
How to Buy Litecoin
Uphold is one of the easiest and fastest platforms to use to purchase litecoin. The user-friendly interface makes it simple and secure to buy, send, and hold litecoin.
Here is a step by step walkthrough to buy litecoin using Uphold:
1. Registration: Go to Uphold.com, click on the “Sign Up” button, and fill out the registration form that appears. After receiving an email from Uphold and clicking on the confirmation link, you’ll be asked to verify your account with a phone number. Once email and phone verification have been completed, you’ll be able to log in to your Uphold account.
2. Get Verified. You’ll need to become a verified member in order to exceed a cumulative value of lifetime transactions of $1,000 US dollars. Getting verified is simple.
To initiate the verification process, we ask that you submit the following:
- Your current residential address
- A clear photo of your face
- Your Social Security Number (U.S. residents only)
- Upload one of the following valid government-issued IDs: Passport, National ID Card, or Driver’s License. (To upload, you can either submit a file or use your computer’s camera to create an image of the document.)
3. Create a Litecoin card. On your main dashboard click on the card that displays the Litecoin logo, or add a new card. This will open an overview of your Litecoin wallet.
4. Now, select the “Add Funds” tab at the top right of the screen.
5. Choose Your Funding Option. Here, you’ll see different purchasing options, including bank account and credit card. Click on your preferred option, fill out the information on the next page and specify what amount you would like to invest. That’s it!
If you want to buy litecoin, Uphold is the perfect option to get on board. Litecoin has a few advantages over other cryptocurrencies, so it just may be the right cryptocurrency for you. If not, you can always sell your litecoin through Uphold or check out other altcoins that may be better for you. It’s that easy.
This article should not be used as or considered investment advice. If you have questions regarding any financial investments please consult your financial advisor.