In this guide an answer to the question 'Should I Invest In Litecoin?'. Especially based upon research, fundamentals, and perspective of this cryptocurrency.
Litecoin (LTC) is one of the largest cryptocurrencies in the market and it has been expanding since it was created back in 2011. Considering this is one of the most useful cryptocurrencies in the world, many traders are searching for ways to invest in Litecoin and improve their portfolios.
In this Litecoin 101 guide, we will make a summary of the most important aspects related to LTC, including features, fees, scalability, security and more.
Disclaimer: All the information in this guide should be considered as educational content and not financial advice. We are not responsible for any action you make following this guide or the things written in it.
What’s the current price of Litecoin?
Below is the table that shares all actual data of the Litecoin cryptocurrency. First and foremost, it will give you the actual price(updated once every 24 hours), also it will give you some extra specifics about the network including total market cap and circulation supply of coins.
Actual Litecoin price(24 hours)
|Total market cap||$9,540,373,330|
|Circulating supply of coins||66,752,415 LTC|
|Maximum supply of coins||84,000,000 LTC|
*CMC ranking: Ranking of the Litecoin project on Coinmarketcap website
What is the idea behind Litecoin?
Litecoin was created by Charlie Lee in 2011 in order to offer users the possibility to send and receive money in a fast and easy way. Due to the fact that this virtual currency was released a few years after Bitcoin (BTC), it shares many similar features with it that we will be showing through the guide.
Compared to Bitcoin, Litecoin fees and transaction times are much more efficient. This is due to the way in which Litecoin was developed with the Scrypt algorithm.
Thus, the main idea behind Litecoin was to create a digital currency that can be used to make transactions. In particular, transactions in a cheaper and faster way than using the Bitcoin network. Over time, Litecoin expanded its use cases and it eventually became to be known as the silver to Bitcoin’s gold.
Furthermore, Litecoin supporters consider that Litecoin can be used as the daily digital currency to make purchases. Instead, Bitcoin can be used as a savings account where most of the funds are stored.
Is Litecoin dead?
Litecoin is one of those cryptocurrency projects within the current top 10 that mostly remains silent all the time. Therefore, many starting investors are wondering if Litecoin is dead and additionally “Should I invest in Litecoin?”.
First of all, Litecoin is being designed as a cheaper and faster alternative to Bitcoin and exists since 2011. Recent years have shown very little development in the protocol. Also, it has the same features as Bitcoin-based upon different fundamentals.
Therefore, “Is Litecoin Dead?” could be a valid question. Compared to other blockchain projects like Ethereum, EOS, or NEO the Litecoin project could be a little bit boring. Additionally, it’s only and foremost feature is being a digital currency or store of value.
Why would people think that Litecoin is dead? In my opinion, it’s mostly because the founder(Charly Lee) has left the project and also sold almost his entire position in Litecoin at the end of 2017.
All in all, despite that the main developer and owner Charly Lee has left, are there still developments going on on the Litecoin codebase? The answer is yes, mostly because the Litecoin Foundation is very busy to implement the Mimblewimble privacy update into the protocol.
Should I buy Litecoin: MimbleWimble?
First of all, MimbleWimble is a separate protocol that has its own functionality within decentralized blockchain networks. Also, it’s a protocol update that handles privacy, fungibility, and scalability. Since 2016, the Whitepaper of MimbleWimble was being shared among Bitcoin community members through IRC-chat.
Additionally, MimbleWimble references to Harry Potter movies and means ‘curse of the tongue’. Litecoin as the little brother of Bitcoin is often used as the testnet of Bitcoin. Therefore Bitcoin developers will watch it closely when MimbleWimble eventually is implemented in Litecoin.
Besides, Litecoin will be the only cryptocurrency within the top 10 that has implemented advanced privacy features that will protect your public transactions on chain. As a result, Litecoin can compete with other privacy coins like Monero(XMR) and Zcash(ZEC).
What is Litecoin used for?
Nowadays, there are many things that can be done with Litecoin. If you are asking “Should I buy Litecoin” then, the answer would depend on what you need Litecoin for.
As we have mentioned before, Litecoin can be used for a wide range of things. If you invest in Litecoin, then it will be possible for you to speculate with Litecoin. That means that traders consider it can be a good digital asset to have in their portfolios.
Litecoin can be used as a virtual currency to pay for goods and services. Indeed, Litecoin is now one of the most accepted virtual currencies in the world. This happened because Litecoin is one of the oldest, most liquid and most established cryptocurrencies in the market.
Should I invest in Litecoin? This will highly depend on your investment strategies and how they will fit into having this virtual currency.
In sum, Litecoin can be used by traders to exchange in the market, by consumers to buy and sell goods and services, and by investors to speculate, among other things.
Should I invest in Litecoin: Is Litecoin a good investment?
Whether to understand if Litecoin is or not a good investment, you would have to analyze the moment in which you enter the market and in the one you sell. Buyers that in the past were able to acquire Litecoin at low prices and sold them later at higher levels were able to get juicy profits on them.
Moreover, before asking whether or not to invest in Litecoin, it is important to understand whether our portfolio needs to add a new digital asset. If we have a crypto portfolio, it is always good to have to some extent some of the top virtual currencies. This provides “stability” compared to other non-established altcoins.
Meanwhile, if we want to reduce volatility in our portfolio, then Litecoin or any other virtual currency would not provide us with this peace of mind of having a stable portfolio.
Litecoin transactions are processed in a similar way as Bitcoin. When a user sends LTC to another person, a network of miners is going to be processing and confirming these transactions including them in a block.
Once the transactions are confirmed by the miners and included in the next block, the funds will be processed. Bitcoin has currently 2.5 minutes blocks and 12.5 LTC rewards per block.
The fees and the transactions times are going to be lower than on the Bitcoin network, as we have previously mentioned. This is due to the fact that Litecoin was designed in order to be faster and make it easier for people to use digital assets on a daily basis.
Despite being very useful, fast, and cheap, LTC transactions didn’t skyrocket as it happened with Ethereum or with Bitcoin.
Litecoin fees are one of the main features of this virtual currency. LTC fees for processing a transfer are usually between $0.01 and $0.03 compared to $0.50 to $6.5 in the Bitcoin network or between $0.05 and $0.50 for the Ethereum network.
As you can see in the following charts, Litecoin fees are usually more stable than those in other networks and they would definitely be very useful for users that use LTC as a means of payment.
If you are a person that really needs the spare change and that cannot afford to pay higher transaction costs, then Litecoin is going to be a great virtual currency to hold and use. It is worth taking into account that Bitcoin and Ethereum are currently being used for other purposes rather than just performing transactions, this is also why we can see higher fees in for these two digital assets.
Litecoin is a much more scalable virtual currency than Bitcoin, for example. The main reason behind this feature is related to its 2.5 minutes blocks that are processed 4 times faster than on the Bitcoin network – which takes ten minutes to process a block.
That means that transactions will be performed faster than on the BTC network. Furthermore, the fees are lower and even during peak times, LTC transactions were much lower than on the BTC network.
For example, during the 2017 bull market, when Ethereum was spammed by decentralized applications (dApps) and Bitcoin transactions were taking days to be processed, Litecoin was the favourite virtual currency to make transfers.
Ethereum fees skyrocketed at that time, and some exchanges had to suspend deposits and withdrawals. Meanwhile, Litecoin proved to be a very reliable option to perform transactions using blockchain technology and digital assets.
In addition to it, Bitcoin and Ethereum are searching for new ways to scale. Bitcoin developers are working on the Lightning Network (LN) and other off-chain scaling solutions, and Ethereum experts and enthusiasts are getting ready to see a Proof-of-Stake (PoS) blockchain in the future.
Litecoin developers are currently working on privacy features that will certainly have an impact on the size of each transaction, but the network is certainly prepared to process more information, data and transfers. This shows how Litecoin is a very scalable cryptocurrency. Furthermore, Litecoin can perform almost 56 transactions per second, which is much more than the 12 to 15 transactions per second supported by the Ethereum network or 7 transactions per second on Bitcoin.
As a proof-of-work (PoW) cryptocurrency, Litecoin works with a network of miners that are currently offering LTC users with one of the most secure virtual currencies in the world. Bitcoin and Ethereum are also PoW network and work in a similar way to LTC.
Miners are entities, individuals, or companies that provide hashing power in order to solve mathematical puzzles required in order to verify the transactions processed by users. For the electricity they consume – they need to use ASIC miners – and the costs they incur for doing these operations, miners receive a reward of 12.5 LTC per block.
It is worth pointing out that miners will also be rewarded with the fees paid by users in the network.
This reward is reduced every almost four years after 840.000 blocks are processed by the network. This makes of Litecoin a digital asset with a decreasing new issuance of coins, similar to what happens to Bitcoin.
Once miners get their rewards, they will be able to sell the funds in the market and cover the costs of running and protecting the network.
Should I invest in Litecoin: How secure is Litecoin?
Considering that Litecoin is the largest cryptocurrency using the Scrypt algorithm by miners, the network is considered to be very secure.
Litecoin is currently offering services to users, including the possibility for them to send and receive transactions. When we talk about financial issues, LTC must be very secure to protect users and investors holding or transacting LTC.
Litecoin does not compete with miners on the Bitcoin network because it uses a different algorithm where ASIC miners developed for Bitcoin do not have an advantage over LTC miners. A massive hashing power would be needed in order to attack the Litecoin network and produce any harm to users in some way.
Is it safe to invest in Litecoin?
Cryptocurrencies are a totally new asset class and a new technology being in its infancy attracts a lot of hackers to this industry. Especially in the early days, hacks and exit-scams were dominating the news in the cryptocurrency space.
Maybe you have heard of the big hack of Mt Gox back in 2014, where 850.000(!) Bitcoins were stolen. Additionally, this hack of 850.000 Bitcoins in total is still the biggest hack of all time in the cryptocurrency space. Also, at current prices, these 850.000 BTC would be worth $7.9 billion which is an insanely huge amount.
Not long after that, Ethereum entered the cryptocurrency space with an entirely new blockchain project. Initially, their first ICO called the DAO was a great success and raised a total of $150 million at that time. Unfortunately, a hacker found a “loophole” in the smart contract code and was able to drain funds from the DAO. All in all, Ethereum had to submit a hard-fork on its protocol to save the hacked funds.
And Litecoin, did something bad happened on the protocol since the start in 2011? Surprisingly, the answer is no. All this time, the project manages to stay off the radar which is quite impressive for being around that long. So if you asking yourself the question “Should I invest in Litecoin and is it safe” then know that Litecoin has proven to be very reliable.
Should I buy Litecoin: Cryptocurrency wallets
As explained above, Litecoin as a network is considerred reliable and secure, however, it’s wise to take some additional measures to protect yourself. For instance, when your consider buying Litecoin on an cryptocurrency exchange don’t leave it there. Instead, withdraw the funds to your local wallet on mobile or desktop or even better on a hardware device that can be taken offline immediately. How does this work?
The safest way to invest in 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.
Invest in Litecoin: Buy Litecoin with credit card
Finally, if you have decided to make a Litecoin investment, the next step would be actually buying Litecoin with a credit card. At the time of writing acquiring Litecoin with fiat currency is a lot easier compared with the early days of Bitcoin. Also, it totally depends on what kind of investor you are, but in general, there are two options.
Option 1: Buy Litecoin at a cryptocurrency exchange
This is the most common option in the process of buying new Litecoin as an investment. Moreover, with this option, you don’t need to own a cryptocurrency wallet, because this platform will generate one for you. At first glance, this sounds very tempting because you don’t have to set-up your own wallet and store your private keys(explained above).
However, most cryptocurrency enthusiasts don’t like this option because you don’t really own the Litecoin as the private keys are managed at the platform. This is a very fundamental issue and therefore many crypto investors favor the option to lock down their own private keys. Of course, if you are a trader and want to buy and sell, a centralized platform offers value. In fact, to be safe from hackers I would advise you to use Coinbase(US residents!) because of their trust and liquidity. Also, if you are not from the US and still favor an exchange above setting up your hardware wallet, Binance cryptocurrency exchange will do fine as well.
|If you want to know more about the options you have in cryptocurrency exchanges to buy Litecoin. Please, read this article we wrote about buying Litecoin at exchanges.|
Option 2: Buy Litecoin without centralized exchange
Another option in buying Litecoin is at a platform that doesn’t store your private keys after the purchase. In other words, buying at these platforms is only possible if you already own a cryptocurrency wallet. As explained above there are a lot of crypto investors that favor this option to be in full control over their assets. Besides, buying at centralized cryptocurrency exchange could be limited to certain countries.
However, if you want to invest in Litecoin at platforms like Coinmama or Changelly you can do it from anywhere in the world. Additionally, this doesn’t only go for buying Litecoin or any other crypto. For instance, it’s also possible to sell Litecoin and receive money by SEPA or SWIFT. Also, to know more about these kinds of platforms, we wrote an extensive Coinmama review to introduce this platform.
To enumerate, now that we have given you an answer in the question “Should I invest in Litecoin”, you are maybe the proud owner of some Litecoin, so what’s next?
As a ‘Bitcoin veteran’ in this new and growing industry, we would advise you to never sell for fiat-currency(if possible). Moreover, over the years Bitcoin and also Litecoin have witnessed many boom-bust cycles but overall the trend has always been upwards. Also, in the future, it’s a big chance that cryptocurrencies are a way to acquire goods and services online. Therefore, the need to sell(or convert back) to fiat currencies like USD and EUR will become less necessary.
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