How to Buy Litecoin - The Ultimate Guide

While all the other cryptocurrencies want to distance themselves from Bitcoin, Litecoin (LTC) accepts the brotherhood. It is not even trying to outdo Bitcoin, instead it is just trying to live outside the shadows of its gigantic sibling. Nonetheless, this did not keep the value of LTC from increasing by over 7000% when Bitcoin only had a 1700% increase between January and November 2017. But what makes Litecoin such an interesting proposition? While Bitcoin has always been revered as the top cryptocurrency, Litecoin wanted to create a means of transacting digitally in a cheaper and everyday way. This caused huge adoption amongst the public, which in turn, saw the prices skyrocket over the last few years.

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The Difference Between Trading and Buying

1

Ownership:

To buy cryptocurrency, you must create a wallet for yourself to hold the tokens. Trading does not require this.

2

Different Goals:

If you wish to support the ethos of the cryptocurrency, buying is better. If you are looking to profit on investment, trading offers more options.

3

Regulation:

Trading through a CFD is much more likely to provide more regulation to protect investment. Buying does typically offer this added security.

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Should You Invest in Litecoin?

Litecoin took the market by storm. Most cryptocurrencies have done the same before, but eventually falling back to their initial price. Therefore, the price is not the best way to consider the investment profitability of a coin. Obviously, the cryptocurrency industry is anything but stable, and Litecoin is no exception. Consequently, a knowledge of the coin’s intrinsic value is the only way to prove if it is worth putting in your money. Litecoin has publicly called itself a clone of Bitcoin, but there is much more depth to this – as a clone (or a fork, as it is known in the cryptocurrency world) isn’t a simple copy and paste. It is therefore essential to have a look at the differences between them and what has been changed from the Bitcoin core to form Litecoin.

Litecoin vs. Bitcoin

There are actually quite a few fundamental differences between Litecoin and Bitcoin. We’ve outlined a few below;
  • Mining: Bitcoin uses an SHA 256 hashing algorithm that allows parallel processing. That is, different parts of the instructions can be run simultaneously on different processors. It takes a lot of processing power. Litecoin, on the hand, uses Scrypt and serial processing. It takes little memory, hence not energy intensive.
  • Transaction speed: Mining a Litecoin block takes only 2.5 minutes. It means the network can process two transactions in five minutes. Processing a single transaction in Bitcoin takes over 10 minutes.
  • Price and value correlation: The cost of a cryptocurrency is made up of its intrinsic value and speculative value. The former is a measure of how valuable the coin is in real life. Bitcoin’s price is mostly speculative, which quickly leads to overvaluing it. The market price of Litecoin, however, is mainly a result of the users’ view of its value.
  • Technology: Litecoin has implemented several techniques to make its services better and more reliable than its competitors. Some of these improvements include Segregated Witness (SegWit), Atomic Swaps, and MimbleWimble.SegWit reduced the strain of transactions on the blockchain. Atomic Swap allows a direct exchange of Litecoin for another coin without using an exchange. MimbleWimble is a nascent project that aims at increasing privacy in the use of Litecoin.

What Makes Litecoin Different to Bitcoin?

Most experts in the industry consider Bitcoin as the gold of cryptocurrencies, useful for value storage, whereas they see Litecoin as the silver, for daily use. The high cost of Bitcoin leaves Litecoin as the best payment option for the daily transactions. As the adoption of Litecoin increase, so will the market value. In light of the above, it is only rational to conclude that Litecoin is worth investing in. However, as its CEO and founder once pointed out, if you cannot handle the volatility of the industry, do not buy. Cryptocurrency prices are highly volatile, which can lead to huge gains or devastating losses. Be ready for it.

Pros and Cons of Buying Litecoin

Litecoin has several advantages over Bitcoin as well as other cryptocurrencies. However, it also has a modest share of drawbacks. We’ve outlined some here;

Pros

  • Established: Litecoin was the first true Bitcoin altcoin and has been around long enough to become dependable. The fact that it has survived this far makes it a low-risk investment when compared to upcoming coins.
  • High trade volume: Litecoin is among the oldest cryptocurrencies in the market and one of the top favourite among investors. As a result, it is easy to find someone who is either selling or buying LTC.
  • Listed on exchanges: It is impossible to find an exchange worth the name that does not have Litecoin as one of the main currencies. It is available on all the major exchanges, from Coinbase to Poloniex.
  • Purchase using fiat currency: Being able to buy an altcoin directly using fiat currency makes investment easy and cheap. You can do so when purchasing Litecoin on nearly all exchanges.
  • Dedicated leadership: Unlike Bitcoin and other coins, the team behind Litecoin are not only vocal but also committed to the improvement of the currency. Charlie Lee keeps an active social media account where he posts updates on the problems cryptocurrencies are facing and the solutions the team is working on.

Cons

  • Scalability: Even though Litecoin is eight times faster than Bitcoin, 56 transactions per second will not be sufficient when more people start using the platform.
  • Volatility: It is more of an industry limitation than Litecoin’s. Prices fluctuate fast and take deep dives or spikes, making short term investments in these coins a high-risk undertaking. However, this has not kept traders out, has it?

What are the Best Payment Methods to Buy Litecoin?

  • Buying with PayPal: Until 2019, you could buy LTC using your PayPal through Virtual World Exchange, Virwox. However, PayPal seems to have gotten wind that the platform uses it for crypto trading and terminated their contract. Buying Litecoin using PayPal will not be possible until PayPal changes its policies on cryptocurrency, which might take some time.
  • Buying using cash: With Litecoin’s reputation, do not be surprised if even your neighbour has a few coins to exchange for cash. The other way is to buy BTC in cash through a peer-to-peer exchange such as Paxful or LocalBitcoins and then exchange them for LTC on an exchange.
  • Buying with a credit card: It is the most popular way of buying Litecoin. Nearly all exchanges that accept payment through credit cards sell LTC directly. Create an account in a credit card accepting exchange, deposit your EUR or USD from your credit card then purchase LTC. Make sure to double check with your bank first.
  • Other payment methods: Several exchanges accept more than one payment method. Some of the acceptable alternatives include debit cards, wire transfers, SEPA, and e-wallets such as Skrill, Neteller, and Payeer. Conduct in-depth research on these payment options before using them.

Storing Your Litecoin

Most exchanges do not provide a place to store your coins. Even if they did, it is still not advisable to leave your coins lying around in the exchanger’s wallet. Safeguard your investment by having a coin wallet from secure cryptocurrency wallet providers. Here are the types of Litecoin wallets you can use:
  • Hardware wallet: They are physical devices, usually USB sticks, that you can use to store your coins. It is safer to buy these from the manufacturer instead of a retailer for you never know if the seller is logging your private keys. Reliable options are the Nano Ledger S and Trezor wallets.
  • Desktop wallet: They are wallets you download to a computer. You can only use them on the PC where you installed. It has its inconveniences but is still a better option than the exchange wallet. A good example is the Exodus wallet.
  • Mobile wallets: They are mobile app-based cryptocurrency wallets. Once you have the app, you can access your coins anywhere anytime.
  • Paper wallet: If you are worried about the vulnerabilities of the hardware or the mobile wallets, and the inconveniences of the desktop option, you can opt to do without them. Print out your public and private keys on a piece of paper and then keep the paper safely.

Buying Litecoin in Your Country

In spite of its growing publicity, cryptocurrency still has not reached a universal acceptance. It is banned in several countries and limited in others. That is, some countries do not prohibit the buying and selling of cryptocurrencies, but ban their usage as legal tender. Unfortunately, other issues may limit your access to Litecoin. Besides, a country or state’s regulations, exchanges also determine where you can buy or sell from. BitPanda, for example, is limited to Europe, Coinbase is only available in about 33 countries, Coinmama is not available in individual states in the US, and the list goes on. Financial institutions may also stand on your way to buying Litecoin. There are countries where banks prohibit transfers to cryptocurrency website or accounts in a different state or country. Therefore, if you plan to invest in Litecoin, check your bank’s policies on cryptocurrency.

Buying Litecoin in the UK

Buying Litecoin in the UK is not much different than buying Litecoin anywhere else in the developed world, at least in 2019. Modern crypto exchanges are increasingly international in their scope, and updates to the standard method of ownership based investment is increasingly crypto’s accessibility to newcomers. Even so, because not everyone understands how crypto exchanges operate, and because there are some Litecoin sources which favour UK residents over anyone else, we’ll give you a quick guide about how to invest in Litecoin. Follow these methods, and you’ll be able to make profits on the next Litecoin price upswing! UK residents will find that eToro is the easiest investment channel for Litecoin. See our review here —> eToro Review.

Is There a Difference Between Buying and Trading Litecoin?

Yes, though the line may be blurry the first time. Buying Litecoin implies that you intend to own the coins. It means you want to have coins at your disposal and then use them to do whatever you wish, wherever you feel. As an investor, you are probably thinking of keeping them for a long time. Trading, on the other hand, is where you buy low and sell high on a trading platform. You may buy Litecoin on the platform, but you cannot transfer them to your wallet. All you can do is use them to leverage your prediction on the future prices of other cryptocurrencies. Buying focuses on the long term prospects of the coin. For example, a person who bought Bitcoin in 2009 when the price was less than 30cents and waited for nine years made considerable gains in 2018 when the price rose to over £10,000. The goal of the person who buys for the long term is to have as many coins as possible and then sell years later. The objective of the trading is to exploit the brief spikes in prices. For example, the person who bought Bitcoin in January 2017 at £900 and kept it for a few months, made a profit of almost 2000% at the close of the year. Though Bitcoin is used here as a case-in-point, the same applies to Litecoin. If you are not sure whether to buy or trade, try both. Once you have a feeling of the industry, then you can choose one. However, in spite of the path you opt for, speculation still plays a significant part. Remember, financial authorities regulate and licence the operations of reputable brokers. The same cannot be said for cryptocurrency exchanges since they offer limited protection to the security of your funds. It is why some do not even provide wallets for you to keep your coins.

What are the Fees Involved in Buying Litecoin?

The cryptocurrency exchange is a booming business, and for a good reason; there are so many people coming into the industry, and new coins appear every day. The platforms make money through the fees they charge, both hidden and apparent. Each exchange, trading platform, or broker provides a fee system. Unfortunately, most people do not check these terms and end up spending more than they should on a given transaction. Here is a quick highlight of the general costs you will likely face when buying Litecoin;
  • Transaction fees: It is the charges you pay for the transactions you conduct on the exchange. The usual cause of these fees is when you exchange, say Ethereum, for LTC. The more exchanges you have to go through to receive a coin, the more prices you pay. It is why being able to buy Litecoin directly is the coin’s primary advantage.
  • Deposit fees: Depending on the exchange or the payment method, you may have to pay some charges for depositing fiat or cryptocurrency to the exchange’s wallet. The amount varies from exchange to exchange with others charging a fixed price. Some change their fees based on market conditions. Some, such as Binance does not charge any deposit fees.
  • Withdrawal fees: Many exchanges and platforms charge a fee for withdrawing LTC from their wallet to yours. Like deposit fees, it varies from one exchange to another with some charging fixed rates while others vary it.
It is crucial to note that you should not judge an exchange based only on the fees it charges. Some exchange and broker platforms that charge low or almost zero transaction and deposit fees make up for the same in high withdrawal charges and vice versa. The important factors to consider are reliability and safety. You would rather pay more for a safe and reliable service than try to save a few cents only to end up losing all your money.

Broker Fees vs. Exchange Fees

Brokers are platforms that focus on bringing together sellers and buyers. They only get a commission from the deal. The main difference between a broker and an exchange is the amount of Litecoin they can sell per transaction. Brokers are in for the big deals, which would take many operations on the exchange. As a result, you make significant savings if you buy in bulk through a broker than the exchange. For small deals, stick to the latter since the fees will be low.

Alternative Cryptocurrencies

FAQs

  1. Litecoin is cheaper and faster than Bitcoin. Even though Bitcoin is the king of the hill, Litecoin still has its unique value.

  2. Litecoin has bigger blocks that Bitcoin, allowing it to be faster and cheaper in most circumstances. It also introduced blockchain improvements like Segregated Witness long before Bitcoin did the same. Litecoin isn't nearly as widely used as Bitcoin, and it's controversial whether or not its advantages would last if it was subject to the same stresses that the Bitcoin network is every single day. But for now, it's a leaner blockchain that's of value to people who need to spend digital currency, or who believe that its long term prospects are better than its parent blockchain's.

  3. Actually, it depends on the selected platform and your region. If you invest from an exchange, odds are that you won't need a lot of money to start investing in Litecoin, e.g., Coinbase accepts deposit from as little as 5 $/€/£. If you use a broker, the minimum deposit tends to be higher (around 100-500 USD).

  4. Actually, it depends on the selected platform and your region. If you invest from an exchange, odds are that you won't need a lot of money to start investing in Litecoin, e.g., Coinbase accepts deposit from as little as 5 $/€/£. If you use a broker, the minimum deposit tends to be higher (around 100-500 USD). Besides the methods above, you'll be able to invest in Litecoin with credit card using: AVA Trade: Brokers like AVA Trade allow you to use top of the range platforms such as MT4, and once you have signed up, depositing with a credit card is very simple. Changelly: this popular exchange is probably one of the most simple to use. All you need to create an account if your email address and a password. You need to set up a litecoin wallet somewhere before you can buy litecoins, click here for the best litecoin options. Your bitcoins will be found in the Coinbase account you set up. Follow the guided steps and you'll get LTC very quickly; however, price tends to be much higher when compared to other exchanges Poloniex: this old platform is one of the largest cryptocurrency exchanges, and it was huge in the past. They offer a huge number of different cryptocurrencies and often are one of the first to offer new coins after their ICOs have closed. To buy Litecoin with a credit card at Poloniex, you first need to sign up. There are some pretty stringent verification processes to get an account with Poloniex. You must take a photo of yourself holding up your identification, but is pretty straightforward once everything is set up.

  5. You can buy through an exchange, but it might take many transactions. Such will attract higher transaction fees. The other way is to find a reputable broker that deals in Litecoin and buy from it. If you have to buy directly from the seller, then ensure you trust them, or the platform has a proper Know Your Customer policy.