This guide will explain to you the safest way to buy Litecoin(LTC) by using a hardware wallet in three simple steps.
Cryptocurrencies like Litecoin are quite new and witnessed a bumpy ride during the past decade. Besides Bitcoin, Litecoin is one of the oldest crypto coins out there and therefore survived multiple bear markets in this young industry. In fact, being highly volatile, this asset class is loved and hated by many crypto investors at the same time. A famous property of cryptocurrencies like Litecoin is its limited supply. Additionally, this interesting property continuously keeps the attention of new investors who are willing to take a risk. Fast forward today, Litecoin is still one of the biggest cryptocurrency projects out there ranking 7th on Coinmarketcap estimated at 4.5 billion USD.
In the first place, if you are a starting investor or trader in this industry it is good to know that buying Litecoin comes with risk. In addition, the entire industry is full of growth and innovation, however, lack of regulation and being in its infancy could easily turn a freshly started project into failure. So far, the Litecoin project did very well and many insiders see this cryptocurrency as one of the most matured out there.
A quick summary: What is Litecoin
Litecoin is a cryptocurrency that has a limited supply. Not more than 84 million coins will be ever mined or created in existence. When talking about Litecoin you can’t deny it’s big brother Bitcoin upon which Litecoin is created. Litecoin was released back in 2011 via an open-source client on Github. Litecoin was the first fork out of the Bitcoin source-code and was released under its own unique properties.
Furthermore, Litecoin is a typical peer-to-peer cryptocurrency that uses LTC as a token or digital currency. The founder of this project is Charlie Lee, a computer scientist from the USA. In addition, he is currently the CEO of Litecoin and in the past, he has worked for Google and Coinbase. When Litecoin was launched by Lee back in 2011, he stated that Litecoin was based upon Bitcoin however, it differs in type of hashing algorithm. In detail, Litecoin uses Scrypt hashing algorithm that is memory intensive and based upon PoW consensus mechanism.
Bitcoin as gold, Litecoin as silver
While Bitcoin was seen as “gold” and a store of value for long-term purposes, Litecoin was seen as the “silver” and a means of a transaction for cheaper and everyday purposes. In other words, Bitcoin has a limited supply of 21 million coins and Litecoin has a limited supply of 84 million. This is a ratio of 1:4 and should make Litecoin much cheaper on a daily basis.
Bitcoin vs Litecoin: The stats
|Coin limit||21 million||84 million|
|Mean block time||10 minutes||2.5 minutes|
|Difficulty retarget||2016 block||2016 blocks|
|Block reward details||Halved every 210000 blocks||Halved every 840000 blocks|
|Initial reward||50 BTC||50 LTC|
|Current block reward||12.5 BTC||25 LTC|
|Created by||Satoshi Nakamoto||Charlie Lee|
|Creation date||Januari 3rd, 2009||October 7th, 2011|
|Market cap||$143 Billion||$7 Billion|
Litecoin Video: Future, Price development(2020) and Bitcoin halving
What does the Litecoin blockchain store?
Like other blockchains, Litecoin has a native cryptocurrency called LTC. Moreover, LTC is called digital money just like Bitcoin(BTC). Also, the Litecoin blockchain is capable of handling higher transaction volume than it’s big-brother – Bitcoin. In general, the Litecoin blockchain has a higher block generation and doesn’t need to update its protocol in the near future. As a result, merchants are able to get faster transaction times for smaller transactions. Also, if users want to send larger transactions they have the ability to wait for more confirmations compared to the Bitcoin network.
Safest way to buy Litecoin in three Steps
To purchase Litecoin cryptocurrency which is called LTC you can do it at several cryptocurrency exchanges all over the world nowadays. However, as explained above, the industry still in its infancy and that also goes for several cryptocurrency exchanges out there. A good example is the sudden death of the owner of a Canadian exchange called Quadriga. Additionally, more than 100.000 cryptocurrency investors lost all their funds overnight because they didn’t own their private keys.
In fact, the Quadriga example is no exception. Similarly, in the past 10 years, almost 100 centralized cryptocurrency exchanges suffered from hacks leaving their clients in the dust. Is there a way to avoid this risk? The answer is yes. Next in this article, I’ll show you the steps to take to be as safe as possible and still don’t have to miss out on possible double-digit gains of Litecoin(LTC) cryptocurrency.
Step 1: Purchase a hardware wallet
Before starting to buy Litecoin(LTC) at a cryptocurrency exchange, you have to take a step back. If you really want to own your cryptocurrency then you need to have full control over your private keys. Meaning, if you buy a cryptocurrency at an exchange and leave it there you don’t really own it, because the exchange will control your private keys. Also, one of the main reasons cryptocurrencies came into existence is the fact that you are in full control over your digital money. For example, a famous slogan Bitcoin fanatics use is ‘be your own bank’ and refers to be in full control over your money.
Cryptocurrency wallet, private key, and public keys
How to be in full control over your private keys? The answer is very simple. You can use a cryptocurrency wallet which is very easy to setup. In fact, setting up a wallet is no different from getting a new e-mail address and requires no extra identification. Also, sending and receiving crypto is very straightforward and one can use a public key for that. In general, a public key is a long string of characters that cryptocurrency users share with each other to send cryptocurrency.
Finally, it is very important to know that your private keys should be kept secret and you should never share it online! Additionally, you only share your public key to send or receive cryptocurrency.
|If you don’t know the concept of a private key yet, I’ll advise you to read our article we wrote about Bitcoin seed phrase. Additionally, it will go into further detail about the concept of the private key and why it is important.|
What is a hardware wallet?
The safest way to buy Litecoin is to store your crypto on a hardware wallet. So why do you need a hardware wallet? First, let me explain what a hardware wallet exactly is. To keep your private key safe, there are currently two options: software wallets and hardware wallets. The definition of a hardware wallet :
A hardware wallet is a special type of cryptocurrency wallet which stores the user’s private keys in a secure hardware device. They have major advantages over standard software wallets: private keys are often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext.
In other words, a hardware wallet stores your private keys offline on a device that is disconnected from the internet.
To keep your Litecoin private keys safe I’ll advise you to use the Ledger Nano hardware devices. Below an example of Ledger Nano X.
Step 2: Buy Litecoin at Coinbase
The safest way to purchase Litecoin is at Coinbase. Why Coinbase? Coinbase is one of the biggest and most popular exchanges in the world based upon daily trading volumes which makes them very reliable. Furthermore, it’s a US-based cryptocurrency exchange but they deliver services to anybody in the world. They also support buying of Litecoin(LTC) via Visa/MasterCard credit and debit card or with Bitcoin.
For buying Litecoin instantly, your credit/debit card should support ‘3D Secure’. To find out if your card supports this, you can just try adding your card to Coinbase and it will give you an error if it doesn’t.
Furthermore, you can instantly purchase Litecoin through Coinbase, provided that they serve your country. At present, they serve more than 100 countries, but unfortunately, not all countries are able to buy and sell.
You can check if their service is available in your country here.
How does it all work?
Signing up at Coinbase is pretty straightforward. First, you give your e-mail account and password and confirm the sign-up in your e-mail account. After that, you have to do an ID verification which requires a valid ID document and a recent photo. Also, you can add a credit card during this sign-up process, but that totally depends on you.
Steps into buying Litecoin safe at Coinbase
- Go to the dashboard/home page
- Hit the blue trade button on the upper right
- Select Litecoin as cryptocurrency
- Select buy/sell tab and enter the requested amount
- Select your credit card which is available as buy method
- Hit preview purchase and confirm
Step 3: Transfer your Litecoin to your hardware wallet
The final step in purchasing Litecoin safe is to withdraw the newly bought Litecoin(LTC) from your Coinbase account. Also, this is a very straightforward thing to do.
- Login to your Coinbase account
- At the Dashboard page, scroll down until you see ‘Your Portfolio’
- Click on Litecoin in your Portfolio
- A new screen opens and you choose to click the blue ‘Send button’ at the upper right
- Now connect to your Ledger Nano device (USB port/Bluetooth)
- Select your public key from the Nano Device and put it in the Recipient field
- Give the amount and write in the memo field if needed(optional message)
- Continue and confirm the withdrawal from Coinbase
If everything went well, within a few minutes you will receive the newly acquired LTC on your hardware wallet and you are the proud owner of some real LTC coins!
Finally, I want to mention that the entire procedure in this article seems a little bit overdone. However, it’s always better to ‘be safe than sorry’, especially in this wild west which is the cryptocurrency industry at this time.
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