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Litecoin (LTC) is considered to be the very first successful altcoin (alternative cryptocurrency). It was created by modifying the Bitcoin source code; that's why in terms of its working mechanism, both cryptocurrencies are pretty similar. It's important to note that it's not the first altcoin that copied the Bitcoin source code. However, historically it's the first most successful and significant altcoins that currently flaunts the status of one of the best cryptocurrencies in the whole world.
While the working mechanism of Litecoin is similar to Bitcoin, it also offers some revolutionary ideas and features such as Segregated Witness and the Lightning Network. Because of its innovative features, Litecoin, over the years, has positioned itself as a separate entity and a friendly altcoin that focuses on achieving different goals. In this article, we’ll discuss in detail “what is Litecoin” and whether it’s worth buying or not.
What is Litecoin (LTC)?
Litecoin (LTC) is a cryptographic currency that, just like other mainstream cryptocurrencies, allows users to perform P2P (Peer-to-Peer) transactions in a decentralized environment. The native token to the Litecoin network is known as LTC, and it's used to perform trade and perform all the transactions on Litecoin. The developers of Litecoin say if Bitcoin is gold, then Litecoin is silver. It means that it's a less complicated version because of its light hashing algorithm. That's why it can process each transaction within 2.5 minutes, which is a lot faster than Bitcoin's initial version.
History of Litecoin
As mentioned, it was created by Charlie Lee, who used to observe Bitcoin closely. According to him, he found some areas of Bitcoin that could be improved, such as transaction time and cost. So, he published a whitepaper introducing Litecoin (LTC) in October 2011. The rise of Litecoin (LTC) to fame initiated right after its creation, and Litecoin only took two years to reach the market capitalization of 1 billion US dollars. With time Litecoin gradually increased its value; although being a volatile asset, it experienced some drastic surges and dips.
One of the most significant events in the history of Litecoin took place when its creator Charlie Lee sold all of his assets. He said that people started accusing him of manipulating the news regarding Litecoin for his personal benefits. Moreover, he also said that his growing influence on the platform also is a concern, especially for decentralization. So, in order to avoid conflicts, in December 2017, he sold all of his LTC holdings.
What Problems Does Litecoin Fix?
As mentioned, Litecoin (LTC) was created by modifying the Bitcoin source code with the aim to offer crypto users a better experience. The following are some of the most significant problems that Litecoin aims to address.
One of the biggest problems that Bitcoin users faced was low transaction speed. Litecoin offers quicker transaction processing and confirmation. Moreover, it also offers lower transaction fees.
The total number of Litecoin (LTC) tokens is 84 billion, which is four times as compared to Bitcoin (BTC). It means that it offers a better and easy mining experience for crypto enthusiasts to earn more profit.
Litecoin network comes with the Scrypt proof of work algorithm, which is considered to be safer as compared to the hashing algorithms that other cryptocurrencies use. This algorithm also offers better processing power than the SHA-256 algorithm.
You can buy Litecoin (LTC) easily by using your other cryptocurrencies on all the famous crypto exchanges such as Binance, Coinbase, and Huobi Global.
If you’re wondering “how does Litecoin work” and what does its Scrypt Proof of Work mean, then it's discussed below for your convenience.
Scrypt Proof-of-Work Algorithm
The right pronunciation of Scrypt is “Ess-Crypt," which (just like Bitcoin's SHA-256) is a hash function or algorithm for mining. It works with the POW (Proof of Work) consensus mechanism where a miner selects a variable known as nonce value. The miner does it by solving a complex mathematical problem, and the resulting output must be lower or equal to the defined target. If the target value is lower than the valid block, generation will be more difficult for the miner and vice versa as the block generation time of Litecoin is 2.5 minutes, so the system automatically adjusts the target value in order to ensure that a new block is generated by the miner after every 2.5 minutes.
For instance, if the variable that a miner selects or the nonce value is "45678," then the system will place it in the header of the new block that is to be hashed. With this value, the system will try to solve the mathematical problem, and if the resulting output is greater than the target value, the miner will need to try again with a different nonce value. All the miners trying to generate the new block do the same. The platform rewards only that miner who solves the problem with the resulting hash value lower than the target before anyone else.
Litecoin Uses
There are many projects out there built on the Litecoin platform, such as Miningcore, Simcoin, Crypto Bar, Cryptex, etcetera. The main purpose of all of these projects is to help the crypto community and to make blockchain easy to use.
One of the biggest use cases of Litecoin (LTC) is its PayPal support. If you're a US citizen, then you can use PayPal to buy, sell, pay, and hold your LTC coins.
Other than that, Litecoin (LTC) has also managed to undergo partnerships with different companies where you can actually use your LTC tokens to buy products and services. Here we have only mentioned the renowned companies that allow you to buy digital services as well as physical products
Travala
Travala is an online platform that offers services to make your traveling easy and comfortable. On this platform, you can utilize your Litecoin (LTC) tokens to book flight tickets and reserve hotel rooms. The best thing about this platform is that it supports over 2 million hotels and several major airlines.
RE/MAX
On this platform, you can actually rent or even buy properties by using your LTC coins. The company has listed Litecoin (LTC) as its valid payment address and even offers luxurious properties.
Snel
It's yet another platform where you can use your LTC coins to buy VPS services, dedicated hosting, cloud hosting, web hosting, and domain names. This platform supports more than 20 different types of payment methods, including cryptocurrencies such as Litecoin (LTC), Bitcoin (BTC), and more.
Litecoin Performance
Litecoin Performance
Later in November 2013, the Litecoin value surged dramatically, and on 29th November 2013, it reached 44.37 US dollars. At that time, the market capitalization of Litecoin was well over 885 million US dollars.
Litecoin Performance
It’s also important to note that because of the bear market and some incidents such as the Mt. Gox exchange scandal, the Litecoin price dropped dramatically. On 16th January 2015, the value of one LTC barely managed to touch 1.28 US dollars, and the market capitalization was only about 50 million US dollars.
Litecoin Performance
In December 2017, Litecoin took advantage of the global cryptocurrency bubble, and its value increased by 500 percent within a matter of a couple of months. So, on 19th December 2017, the cryptocurrency experienced its all-time high price, which was more than 359 US dollars. At that time, the market capitalization of the cryptocurrency was about 19 billion US dollars.
Litecoin Performance
But because of high volatility, it dropped again until January 2023, when almost all the cryptocurrencies in the world experienced the most prominent surge. Litecoin (LTC) managed to reach a value of a whopping 377 US dollars with a market capitalization of more than 20 billion us dollars.
Litecoin Performance
Later on, because of another dip, the current price of the cryptocurrency is about 134 US dollars with 8 billion US dollars of market cap.
Litecoin Performance
So, in simple words, it's critical to keep in mind that being a cryptocurrency, Litecoin (LTC) is highly volatile. It also signifies that investing in Litecoin (LTC) isn't risk-free. In fact, the risk factor is higher as compared to other assets. The following chart shows the entire performance of Litecoin, which also explains high volatility.
There are actually three different ways that you can use to mine Litecoin (LTC). It’s important to analyze the pros and cons of each method before choosing one. That’s why we have compiled a step-by-step guide for all the methods below.
Solo Mining
Set up wallet: The very first step to start Litecoin (LTC) mining is to set up a Litecoin wallet that will allow you to secure your LTC coins securely.
Choose suitable hardware: The next step is to have suitable hardware that you’ll use to mine Litecoin (LTC). Keep in mind that it can cost you thousands of dollars. You can opt for the most popular ASIC miners.
Install necessary software: The third step is to install the necessary software. Most mining software is free, and if you opt for an ASIC miner, then the software will also be pre-installed.
Start Mining: the third and last step is to start mining/ First, you’ll need to carefully read and understand the instructions of the mining software. In order to keep your mining profitable, you’ll need to store your earned LTC coins in a crypto wallet. Moreover, you’ll also need to monitor the performance of your hardware for efficient mining.
Mining Pool
All the initial steps for mining Litecoin (LTC) in the pool are similar to solo mining. But after the installation of the desired mining software, you’ll need to choose the mining pool. You can find tons of Litecoin mining pools online, and you'll need to choose the one that offers better rewards and a suitable fee structure. It’s also important to note that some mining pools require you to install a specific software solution.
Cloud Mining
Choose the cloud mining provider: In order to perform cloud mining, you'll need to work with a cloud mining company. So, you'll first need to choose a legit and reputable cloud mining provider that offers a suitable fee structure.
Choose your package: Most cloud mining companies offer different packages with different fee structures and rules. You’ll need to choose the one that suits your unique LTC mining needs.
Choose the mining pool: Once you have selected the cloud mining provider and the desired package, the next step is to choose the mining pool. You’ll need to compare all the available options depending upon payouts, pool size, and fees.
Start mining: the next step is to start mining, and again, don't forget to store your earned LTC coins in your secure crypto wallet to keep them safe.
It’s important to note that solo mining can be very expensive, and the chances of completing the new LTC block are also low if your mining power is not sufficient. Moreover, your electricity bills will also increase. On the other hand, in pool mining and cloud mining, the chances of block completion are high. But in pool mining, the reward will be shared among all the participants of the pool, and in cloud mining, you’ll need to pay the provider’s fee.
Is Litecoin (LTC) Mining Profitable?
Whether Litecoin (LTC) mining is profitable or not depends upon its price fluctuation and your initial investment. The reason why Litecoin (LTC) mining is still happening is its profitability. According to Statista, it’s possible to earn more than 5 US dollars every day with just one Gigahash/s power.
Litecoin Criticism
One of the biggest criticisms that Litecoin (LTC) still faces is the decision of its creator to sell all of his LTC coins. That’s because when Charlie Lee sold his holdings, the LTC coin was experiencing its all-time high value. Moreover, Litecoin is no longer a unique cryptocurrency platform because some other crypto platforms are now offering even better transaction speed and cost. It means that both of the advantages that the Scrypt algorithm brought have disappeared.
Another important factor that many crypto experts and critics state about Litecoin is that it’s no longer possible to mine Litecoin (LTC) and earn profit from your home. That’s because of the industrialization of Litecoin (LTC) mining. The big organizations have created massive mining farms with literally thousands of GPUs operating in series. Therefore, an individual miner with a small mining system can’t possibly compete with those mining farms.
Should You Buy Litecoin?
The total supply of Litecoin (LTC) coins is 84 million, and currently, 79 percent of them are already in circulation. Because of its limited supply, it's considered to be a safe harbor, and many people consider it a store of value. If cryptocurrency actually becomes the currency of the future and replaces the current traditional government-issued currency, then undoubtedly Litecoin (LTC) coins will be of great value. Despite the criticism and losing the status of a unique cryptocurrency, Litecoin is still known to be one of the most significant digital currencies out there.
On the flip side, it’s important to note that multiple cryptocurrencies are performing better than Litecoin but were created after years of Litecoin's inception. But because of its rapid price fluctuation and overall high volatility in the crypto market, Litecoin can generate great ROI (return of investment. In any case, it’s critical to perform your due diligence in order to make sure whether buying Litecoin (LTC) is the right option according to your financial goals or not.
If you're interested in buying Litecoin (LTC), then the first step is to find the right online platform (crypto exchange) which is both trustable and reputable. Binance is the best available option because it's the largest crypto exchange in the whole world, with more than 13.5 million active users. Moreover, you can buy, sell, and trade Litecoin on this platform along with 150 other cryptocurrencies.
One of the best features of the Binance platform is its fee structure. The platform only charges a flat fee when you actually perform trade and depending upon your country; the fee varies from 0.1 to 0.2 percent. It's an easy-to-use, fast, and reliable crypto trading platform with great trading conditions.
How to Buy Litecoin (LTC): 3 Steps Algorithm
It’s important to follow the right procedure not only to buy Litecoin but also any other cryptocurrency. You can use the following three-step algorithm if you’re wondering how to buy Litecoin.
Step One: Market Analysis
The first step is to make sure whether buying Litecoin is in your interest or not. For that, you’ll need to study the crypto market comprehensively. The best way to perform the market analysis is to go to any reputable price tracking website such as CoinMarketCap. Not only does it provide you with the current performance and price charts regarding your selected cryptocurrency, but it also allows you to study the historical data.
Analyzing and studying the market will allow you to determine if buying Litecoin (LTC) is the right option for you or not, depending upon your unique financial goals and needs.
Step Two: Funding Account
Once you've determined that investing in Litecoin is the right choice, the next step is to choose the crypto exchange. As mentioned, Binance is the biggest and most trustable online platform to buy, sell, and trade cryptocurrency. If you choose this platform, then first, you'll need to open your Binance trading account, which is actually a piece of cake. All you need to do is to open the Binance website and click on the "Register Now" button that will be available on the main page.
Funding Binance Account
After that, you’ll need to enter the email account that you want to use and write down the desired password. The system then will send an activation link to the email account that you entered. You’ll need to go to your email inbox, open the Binance email and click on the activation link.
Once your account has been created successfully, you’ll need to fund your account so that you can buy Litecoin (LTC). For that, you’ll need to log in to your Binance account and hover your cursor over the “Wallet” button. The system will show a dropdown menu with multiple options, and you'll need to choose "Fiat and Spot," as shown below.
Funding Binance Account
From the next page, you’ll only need to click on the yellow button with the “Deposit” label.
Funding Binance Account
Now the system will provide you with two different options listed below.
Deposit Crypto
Deposit Fiat Currency
If you want to fund your account by using cryptocurrency, then you'll need to click on the "Deposit Crypto" button.
Funding Binance Account
On the next page, you’ll need to attach the crypto wallet you’re using to fund your account with crypto.
If you want to add fiat currency to your account, then you'll need to click on the "Continue" button instead of "Deposit Crypto" after selecting the currency and bank. The system will lead you to another page, where you'll need to select the amount and enter your bank account information. The selected amount will be added to your account.
Step Three: Buying Litecoin (LTC)
Binance also offers a smartphone app that offers easy navigation and a user-friendly interface. You can use the app to perform the following method to buy Litecoin (LTC).
First, you'll need to open your Binance app and click on the yellow button with double arrows, as shown in the image below.
Buying Litecoin
Now you’ll need to select the “Buy” option from the available list because you want to buy Litecoin (LTC).
Buying Litecoin
The next page will have the list of all the cryptocurrencies that the platform supports, and you'll need to choose "LTC." After that, you'll need to select "Binance Cash" as your payment option, and that's about it.
Top 10 Best Cryptocurrencies to Invest In
Having a diverse portfolio is always good for your trading account. Moreover, putting all your eggs in a single basket is never advisable, especially while investing. For that matter, we have created a list of the top 10 cryptocurrencies with the highest probability of generating a great return on investments. Keep in mind that each cryptocurrency mentioned in this list is selected after detailed market analysis and research work. Our experts have only chosen the options with exceptional current market performance and positive future indications.
The risk factor can never be eliminated when it comes to investing in volatile assets, especially cryptocurrencies. So, one of your most important considerations must be the identification of the amount of money that you can easily afford to lose. We recommend you buy a few LTC coins first in order to analyze their behavior and market performance. It'll allow you to thoroughly understand whether investing in this cryptocurrency suits your investment objectives or not. We hope this detailed guide about Litecoin (LTC) will help you to understand how this cryptocurrency works and how you can use it to grow your capital.
FAQs
Is Litecoin a Legit cryptocurrency?
Yes, Litecoin (LTC) is one of the most popular and widely accepted cryptocurrencies that you can use to buy services and products. Out of 7,000+ cryptocurrencies, Litecoin currently ranks at 13th position.
IWhat is the Block generation time of Litecoin (LTC)?
Litecoin offers the Scrypt proof of work algorithm that can generate a new block after every 2.5 minutes.
IWhat are the biggest benefits of Litecoin?
Litecoin offers faster transaction speed and charges near-zero transaction fees. These are two of the most significant advantages of using Litecoin.
IIs investing in Litecoin a good idea?
According to the current market analysis, investing in Litecoin can be profitable. But you must research deeper in order to have a clearer idea before investing.
Jason Law is a freelance writer and journalist and a Traders Union website contributor. While his main areas of expertise are currently finance and investing, he’s also a generalist writer covering news, current events, and travel.
Jason’s experience includes being an editor for South24 News and writing for the Vietnam Times newspaper. He is also an avid investor and an active stock and cryptocurrency trader with several years of experience.
Winnifred Emmanuel is a freelance financial analyst and writer with years of experience in working with financial websites and businesses. Her expertise spans various areas, including commodities, Forex, stocks, and cryptocurrency. Winnifred tailors her writing to various audiences, including beginners, while also providing useful insights for those who are already familiar with financial markets.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.
