Litecoin was created by Charlie Lee who is an ex-Google employee who had the idea to create a “lighter” version of bitcoin. If bitcoin was represented as gold then litecoin would be seen as silver with a means of transactions for cheaper and everyday things, but one of the main differences between Litecoin and Bitcoin is their mining procedures and capabilities.
The mining process consists of miners using their computational power in order to solve these extremely hard puzzles, which need to be difficult in the first place otherwise miners on the network will exhaust the supply to early. However what separates bitcoin from litecoin is the way these miners are conducting their roles, because bitcoin uses a SHA-256 hashing algorithm for mining and people realised that if they work together and share their computational power in the form of “mining pools” then they would cut the time in half. We now see hundreds of mining pools about all ready to share computing power in order to fight to the finish line and solve the puzzles first.
However, because of the rise of more powerful technology to help big companies become big players in the mining arena, it means that the average miner virtually has no chance of getting any rewards, due to the rise of ASIC plants (application-specific integrated circuits), which is specialised equipment to speed up and mining process and become more efficient.
Which is why litecoin is seen in a better light than bitcoin because of how miners are able to reap more rewards, because of the alternative algorithm called “scrypt” that is used. By utilizing the scrypt algorithm it means that the calculations performed by miners are carried out in a more serialized way, and because of this it means that parallelizing (mining pools) are not possible and so average miners will stand a far better chance to reap rewards. For this reason alone, is why litecoin is becoming increasingly popular and we are likely to see the surge of popularity continue.
Choose a Litecoin Wallet
At the start of the how to buy Litecoin process is choosing a digital wallet that accommodates Litecoin. Coinbase is one of the most popular digital wallets for Litecoin at the moment. It’s ease of use and broad compatibility make it one of the most preferred Litecoin digital wallets.
The original wallet for Litecoin is Litecoin Core. This can be installed on your desktop for free. However, this downloads the litecoin blockchain in its entirety, so you’ll need a lot of storage space and patience.
For better security, it is recommended to take a hardware wallet like Ledger or Trezor. The hardware wallets offer a much more secure storage option, although it is important not to the lose the USD stick.
Recommended Litecoin Wallets
There are many digital wallets to choose from. We recommend the following wallets when discussing how to buy Litecoin:
For further information and more in-depth digital wallet reviews, please visit our Crypto Wallets page.
Choose a Litecoin Exchange
Litecoin is actually one of the harder crypto coins to buy. The difficulty is because most exchanges trade Litecoin only for Bitcoins and not for fiat currencies. Most litecoin purchases are transacted with Bitcoin. The most popular liquid exchanges that enable a BTC/LTC transaction are Bitstamp, Coinbase and Krakken.
Choosing a Litecoin exchange may seem complicated but as always, by following a set of checks, it is possible to choose the right Litecoin exchange for you. When choosing a Litecoin exchange, it is important to consider the following five factors:
- Make sure that the exchange accepts customers from your country.
- Check what payment methods are available
- Make sure you know exactly what fees are involved. Deposit, Transaction and Withdrawals in particular.
- Check the exchange rates. Fees are often ‘hidden’ within the exchange rates so it is important to compare both the exchange rates and the fees.
- Check what is involved in the Know Your Customer (KYC) process. What ID is needed, proof of residence and whether or not proof of income will be requested.
Recommended Litecoin Exchanges
Once you have purchased Ripple (XRP) and you intend to hold your Litecoin for a while or have purchased a particularly large amount, it is highly recommended that you transfer the Ripple from your exchange wallet into a more secure personal wallet. Despite most established exchanges being well protected, moving your Ripple into a hardware wallet will help prevent against DDOS attacks, busy trading periods, and possible hacks.