Litecoin has been around for quite some time now, but it’s never too late to learn a little more about the bitcoin alternatives out there. Litecoin has often been described as the silver to bitcoins gold in terms of their relationship to each other, so what better alternative cryptocurrency to look at first. Let it be known though, that most of the information available explaining what bitcoin is and why use bitcoin apply to Litecoin too.
The Ins and Outs of Litecoin and Mining
Litecoin was originally developed by Charles Lee in 2011, to address some of the shortcomings of bitcoin. Based on the Bitcoin protocol, Litecoin has been tweaked to allow for it to be mined efficiently using regular consumer-grade hardware. No specialized ASICs mining hardware is required, and bitcoin miners using advanced ASIC rigs cannot exploit them to mine litecoins. Although, Manufacturers are currently in a race to develop scrypt ASIC miners for litecoin mining, but this has yet to be released.
The proof of work algorithms solved in litecoin mining differs to that of bitcoin as it is scrypt based, meaning regular computers containing GPU chips are more than capable of effectively mining litecoin, for now. Not only is mining easier compared to bitcoin, but transaction confirmations are much quicker, averaging at 2.5 minutes each. In this sense litecoin is considered lighter than bitcoin, hence the name. In terms of scarcity, 84 million litecoin limit has been set, meaning it is far more abundant and each coin is worth a fraction of the price of bitcoin. These factors and additional macro demands mean that bitcoin and litecoin have traditionally traded with high correlation, maintaining banded ratio patterns to each other, much like silver and gold. While the minimum transaction fee for bitcoin is 0.0001 BTC, the transaction fee for litecoin is proportionately higher, at 0.02 LTC. This is understandable as one LTC is currently valued at 0.024BTC.
Getting Your Hands on, and Holding Litecoins
This part is pretty simple and there are several options. LTC is currently second only to bitcoin in terms of popularity and is generally available for purchase or trade on all major exchange markets. Like bitcoin, litecoins are also traded face to face, using sites like Localbitcoin to set up exchange meetings. However, it is more common to find investors buying litecoin with bitcoin, or other alternative cryptocurrencies. Those with a wallet full of bitcoins often hedge against the swing in bitcoin using litecoin.
Buying litecoin using bitcoin is the quickest and easiest way of getting your hands on some, and the only way in some countries. For those who have no bitcoin or want to buy litecoin with fiat currency, check out:
On a side note, you could also get paid in litecoins for some jobs. It is possible to work for litecoins, with freelance job posts added to Jobs for Litecoins quite regularly.
When it comes to litecoin addresses, they differ from those for bitcoin only for the fact that the first letter in litecoin address is always “L“. This is just a handy way to avoid confusion.
And of course, you will also need a litecoin wallet, which can easily be download from We Use Litecoin.
Buying with litecoin
The infrastructure for litecoin is still underdeveloped. The digital currency developers community is still in the process of building up the bitcoin network so this is hardly a huge surprise. However, there are few places that will accept litecoin as payment. You can check these out in uselitecoin.com and We Use Litecoin. The lists are growing, but until the flagship cryptocurrency, bitcoin, is accepted more widely, it is not likely that the litecoin infrastucture will receive heavy investments.
The future for Litecoin
The future is uncertain for litecoin, and will remain so until it, and its big brother gains wider acceptance. Litecoin will not grow unless used, and will not be used unless accepted. It’s acceptance is largely hinging on the acceptance of bitcoin by the wider global community, as the primary purpose of litecoin is to serve as a lighter option to bitcoin. Bitcoin, in theory, will be used for larger transactions, while litecoin will most likely fall into the microtransaction niche.
Let us know how you feel about Litecoin in the comment section.
Disclaimer: Any investment should be done with due diligence and you are responsible for your own decisions. This article should only be used for informative purposes.