Everything You Need To Know About Litecoin Before Investing

Introduction

Litecoin was introduced with the aim to make a version of Bitcoin that is more scalable and can be used for making small payments. With its fast transaction speed and low transaction cost, it became popular, giving serious competition to Bitcoin with its scrypt algorithm. Although Litecoin remains a risky investment with its price fluctuating every now and then, several people are investing in Litecoin and buying it from crypto exchanges. 

Price History of Litecoin

Litecoin, a digital currency, first came into the market in 2011 and was created by Charlie Lee. Since then there have been fluctuations in the price of Litecoin. The price of Litecoin depends upon the demand of the altcoin. The price of Litecoin was the highest in December 2017 and its price at that time was $375. Litecoin saw a downfall in its price in December 2018, and its value went down to $24. Recently there has been a surge in its price again and its price was $195 on 25th October 2021. Litecoin has seen competition over the past years with the emergence of many new cryptocurrencies with fast transaction speeds and minimum fees on transactions. 

What Is Litecoin And How Does Litecoin Work?

Litecoin is the first alternative to Bitcoin and it employs the same technology as Bitcoin. It is among the top 20 cryptocurrency lists around the globe in market capitalization. Litecoin became a rival to Bitcoin because of its fast transaction speed and low transaction cost. Litecoin utilizes the proof of work system for verifying transactions and uses the scrypt algorithm for fast transactions with one transaction taking an average of 2.5 minutes. There are 84 million Litecoins in the market that can be mined. 

Litecoin miners use high-powered computers to securely mine Litecoin and attach it to the blockchain. Verification is done thereafter and miners get rewarded with Litecoins which are halved at regular intervals, that is after every 4 years on an average. Transactions on the blockchain are made anonymously. 

Where to Invest in Litecoin

One can invest in Litecoin by registering with a crypto exchange and opening an account with them. The crypto exchange will allow users to access trading platforms where one can buy and sell cryptocurrencies by simply placing orders. Thousands of exchanges are there which allow you to access cryptocurrencies. Before choosing a crypto exchange make sure that it provides the coins that you want to buy or sell other than Litecoin. The ordering process is simple in some exchanges and complex steps and analysis tools are provided to investors in others. One should choose an exchange depending upon one’s choice. Exchanges also charge fees for buying and selling crypto. Thus, you should check the rates of several exchanges before selecting one for trading.  

Etoro

Etoro offers users real-time tracking of data and a top-notch security system. It also allows users to have access to the major cryptocurrencies of the world like Bitcoin, Ethereum, Litecoin, and others. eToro offers an option of virtual trading with a fake amount of $100000 and you can sharpen your skills at trading before trading in the real market. eToro has a spread-based commission schedule and users only pay once and can buy and sell multiple times. 

Coinbase

Coinbase is one of the largest and favored crypto exchanges with a user-base of 35 million within 100 countries. Investors can buy and sell 39 different cryptocurrencies like Uniswap, Aave, OMG Coin, Cosmos. Coinbase is user-friendly and has a simple layout and thus it appeals to beginners who can easily set up their account. Users can buy cryptocurrency with a credit card and track their crypto holdings. 

Gemini

Gemini is a crypto exchange that offers users the option to buy and sell 26 cryptocurrencies Bitcoin, Ethereum, Orchid, Ox. Gemini operates in the US, Europe, and Asia. Gemini offers users multiple platforms with an interesting interface based on their skills. Gemini also provides a wallet to store the assets. Gemini also notifies users when a cryptocurrency you are interested in reaches a predefined target. 

Advantages of Litecoin Investments

Litecoin has a better value than other altcoins with low market capitalizations. Litecoin offers low transaction fees. Whenever there is a transaction in Bitcoin, a certain amount of it is lost for verification purposes. Litecoin operates more effectively and users lose less money on transactions. Litecoin has a faster transaction speed as compared to bitcoin and processes a single transaction within 2.5 minutes. Litecoin is built on the Bitcoin original network which makes it easier to integrate new features and security patches for keeping up with the latest trends. Litecoin remains the most popular altcoin among other coins also as per the Litecoin price prediction by experts it is a good investment if you are investing for the long term. 

Disadvantages of Litecoin Investments

Apart from having advantages, Litecoin also has a few disadvantages. Litecoin was the earliest altcoin that developed on Bitcoin’s network, but with years several affordable cryptocurrencies with similar efficiency and transaction speeds have come into existence and increased the competition. Litecoin has lesser hash power than Bitcoin and thereby has less security. The coin’s future had been compromised when Charles Lee sold all of his stake in the cryptocurrency in 2017.

Conclusion

Litecoin despite its current technological irrelevance continues to be the 17th largest cryptocurrency in market capitalization with fast transaction speeds and low cost for transactions. If you plan on investing in Litecoin you should choose a reliable crypto exchange and never invest more than you can afford to lose since the price of cryptocurrencies is subject to volatility and crashes.