What is Litecoin?
Litecoin is an internet currency that facilitates instant, almost zero transaction costs, peer-to-peer payments across the globe. Charlee Lee, the creator of this cryptocurrency, released it on Gift hub in the year 2011, through an open source client.
However, the currency went live for the first time in the year 2013 and at that time, it was using part of the Bitcoin’s code. Today, it is among the leading cryptocurrencies that use Blockchain as their public ledger in transactions.
Both businesses and individuals can buy Litecoin through banking or any other system of payments. One of the key reasons, Charlee Lee created the currency was to minimize mining centralization and to allow more people to benefit. Litecoin was inspired by Bitcoin and therefore most of its features are exactly like those of Bitcoin. However, below we will also list the key differences between the two. For example, Litecoin is affordable and faster.
What is Litecoin Trading and how does it work?
You can buy Litecoin from any part of the world and still incur lesser costs than you would incur when using credit cards or bank transfers. However, there are several key considerations in the trade of Litecoin. A quick example, you can buy the currency through cryptocurrency exchanges or speculate on it’s future price with TDS Capital. But depending on your goal or preferences, you can buy Litecoin in one of the following ways.
- Coinbase – This has been a choice of many traders mainly because it offers many currency pairs. The other reason people opt for the platform is that it allows the use of credit and debit cards when buying Litecoin. TDS Capital is a service provider that allows you to trade this way. However, to start trading, you will have to complete the registration. To prevent the use of Litecoin in criminal activities, such as money laundering, you will have to verify the registration details.
- Local Bitcoins The other option of Litecoin trading involves the purchase of bitcoin. After you have bought the bitcoins, you can trade them for Litecoin in other exchanges. To store your Litecoin safely, you will require a secure digital wallet. That ranges from the mobile, hard wallet for desktop computers and paper wallets. Keeping the money safe is a challenge and you will require a secure portfolio with very strong passwords.
Buying LItecoin Vs. Buying Bitcoin
If you found a list of the popular cryptocoins, both Bitcoin and Litecoin will not miss. However, depending on the functionalities and features, one is better than the other is. Charlee Lee created Litecoin to help solve some of the problems associated with Bitcoin. Here are some of the reasons Litecoin is better than Bitcoin.
- Bitcoin mining is expensive – You cannot use an ordinary computer to mine Bitcoin. Unfortunately, the powerful computers people use for mining consume a lot of energy and the mining process is slow because additions to the Blockchain take roughly 10 minutes. On the other hand, Litecoin use crypt algorithm or unique code that is advantageous due to its high speeds. The addition to Blockchain takes only 2.5 minutes. In reality, the speed is around four times that of Bitoin. As a result, each new transaction is fast and uses less energy. That is the main reason, Litecoin is an affordable alternative to Bitcoin.
- Higher coin limit – Currently, the limit for Bitcoin coins stands at 21 million. On the other hand, the limit for Litecoin is 84 million. When each of the two reaches the set limit, there will be no mining of more coins. Therefore, by just looking at the two limits, you will realize that that of Litecoin is more favourable. Its many coins will be in circulation for a longer time and will reach many traders. A large number of coins also provides a psychological benefit to the traders because of the smaller price per unit.
- A good store of value – For a long time, people have been using gold as a store of value. But today, cryptocoins are better. The number of Litecoin units is limited to 84 million. That should tell you that it would be inflation proof in the near future.
- You can use an ordinary computer to mine Litecoin – Unlike Bitcoin, you can use any computer to mine Litecoin. That allows the spread of coins among many users. Any currency with a large number of users, from all parts of the world, is a better choice. On the other hand, it becomes hard and hard to access Bitcoin after day after day. That is because of the complex mining system that uses the Application Specific Integrated Circuit (ASICS).
Some basic Litecoin trading rules for those who have just entered the filed
To succeed in Litecoin trading, you will need to observe the basic trading rules. Until you visit our Trader Guides Section Here are a few tips that will help you in the trading.
- Use analysis tools – To be successful in Litecoin trading, you have to watch volume graphs and charts. They will help you know the historical prices of Litecoin – you need them to make accurate predictions. The charts and graphs will show you the peak periods and dips accurately. The prices are likely to spike during consolidation.
- Beware of the risky periods – You have to make your entry during the risky periods. A quick example, the first months of the year come with low risks and the best entry times are usually between 9 pm and 11 pm GMT. The best time for selling your Litecoin is between 1 am and 7 am.
- Keep watching the trend of Bitcoin – Bitcoin significantly affects Litecoin and its nature of trading. Mostly, when the prices of Bitcoin increase, the Litecoin prices increase too. Therefore, the best time to buy Litecoin is when Bitcoin is stable or when its price is growing.
- Be patient – Finding a safe entry is important, but you will have to keep watching the specific pattern of cryptocurrency trading. At times, you will have to investigate the best positions. That will need patience.
- Spread your investment – Instead of putting all your eggs in one basket, diversify by spreading the investment in many cryptocurrency caps. That way, you will benefit from various coins.
- Do not be greedy – You can earn huge profits from Litecoin trading but an exit plan should remain in your mind. Instead of waiting for a very long time to leap all the predicted profits, you should have a habit of withdrawing the earnings and then starting afresh.
Unlike Bitcoin, Litecoin has great growth potential. The use and adoption of this coin are expanding rapidly. The reasons behind that are many but include, high speeds, high coin limit and the market capitalization. However, like with any other form of trading, you have to be cautious to avoid making losses.