What is Litecoin?
Litecoin is a peer-to-peer (P2P) currency. Charlie Lee created it, releasing it via an open source client on Gift hub in 2011. The digital currency first went live in 2013 while using some of Bitcoins code. It’s part of the cryptocurrency family which uses Blockchain as its public ledger in its transactions.
Its currency can be transacted between individuals and businesses without the need to transact through the banking or any other payment system. The reason it was created was to reduce the centralization of mining and allow many users to access it.
Litecoin is inspired more by bitcoin, as most of its functions are closely similar to those of the bitcoin. In most cryptocurrency circles, it’s often referred to as itcoin’s little brother’. However, there are also useful differences between the two, which then sets Litecoin apart in terms of its extra amount of speed, as well as its affordability.
What is Litecoin Trading?
Litecoin can be traded anywhere on the global currency platform, with much lower fees than those of bank transfers, and credit cards. There are a few considerations in Litecoin trading. For example, you can purchase the currency through a cryptocurrency exchange or trading company like Atecs Capital. Depending on your priorities, you can buy your Litecoin in the following ways:
- Coinbase: It is suitable for the majority of traders because it comprises quite a large number of currency pairs. Another reason is that you can purchase the Litecoin with your credit card. Atecs Capital Offers this service. Registration requires providing your identity and address, which is a standard procedure in many exchanges. Verification is critical to prevent money exchange from being used for criminal activities, including money laundering.
- Local Bitcoins: You can purchase your currency by first buying bitcoin, which allows you to buy with any currency. Then, you can trade the bitcoins for Litecoin in another exchange. Once you have bought your Litecoin, you need to create and secure a digital wallet for storage purposes. These can range from hard wallets to desktop, mobile, and paper wallets. It’s always quite challenging to keep your money safe, and so you need a secure type of portfolio with strong passwords.
Litecoin VS Bitcoin
Both Litecoin and Bitcoin are immensely popular, yet one has to have the upper hand, based on certain features and functionalities. The reason why Litecoin came into existence is that there are a few things that needed to change, for the better.
Let’s break it all down to see why Litecoin is, in fact, a much better option.
- Mining for Bitcoin Is Much More Expensive: The powerful computers that are used during the process always require significant sources of energy, but the process is also quite slow as it takes about 10 minutes for an addition to the Blockchain. On the other hand, Litecoin uses a unique code, crypt algorithm,’ which is distinguished for high speeds. Its rapid addition to the Blockchain takes a quick 2.5 minutes.
- In a real sense, this speed is four times faster than that of the Bitcoin, making each new transaction quite fast, but also utilizing less energy. It’s for this reason, Litecoin comes along as quite affordable, and what most traders are looking for.
- Coin Limits: Bitcoin’s limit stands at 21 million, while that of Litecoin is at 84million. It means that once each of them reaches the limit, no other coins can be mined. It’s more favorable for the Litecoin, as more its coins, can be in circulation for much longer, reaching more traders. The maximum number of coins also offers a more psychological advantage over bitcoin, mostly because of its smaller price for a single unit.
- Promise for Store of Value: Just like gold is a good store of value, cryptocurrencies such the Litecoin promise to be a store of value. This is because there is only a limited amount of it, at 84million, meaning that it can be inflation-proof at some point in the future.
- Litecoin, unlike bitcoin, can be mined using ordinary and straightforward computers: This allows new coins to be spread among a larger group of users. The more people access the Litecoin, the better, for the currency on the global money market. Bitcoin, on the other hand, becomes harder and harder to access for other users because of its complex mining system which uses Application-Specific Integrated Circuits (ASICs)
What are Some Basic Trading Rules for Those Who Have Just Started buying Litecoin?
Just like any other cryptocurrency, some excellent tips can help in your Litecoin trading journey. Make sure you visit our Education center for further info
- Utilization of Analysis Tools: These include price charts and volume graphs which can help you to know the historical prices of the currency, and accurately make your prediction. You can easily see its peak periods, as well as its dips. One of the entire periods in which prices for most cryptocurrencies spike is during times of consolidation; you can find that the Litecoin trades within a tight price range.
- Beware Of Risky Periods: This includes the best times and months for making your entry. For example, the early months of the year come with low risks, and good entry positions are usually around 10 am, sometimes between 9 pm and 11 pm GMT. Then, the highest point to sell is between 1 am, and 7 am.
- Pay Close Attention to The Bitcoin: Litecoin, including its nature of trading, is closely associated with the behavior of bitcoin on the money market. Often-times when bitcoin prices slump, prices for Litecoin tend to go the same way. The best prices are therefore related to growth in prices for bitcoin, or when the bitcoin is relatively stable.
- Be patient: It’s essential to find a safer entry within a short time frame, but you must also identify a specific pattern to back your entry position while trading. Sometimes you need proper breaks as you investigate your best position to make a breakthrough, so be quite patient as you wait to make a big move.
- Do Not Put All Eggs In One Basket: Instead, you can diversify by spreading your investment in various cryptocurrency caps. This allows you to reap the benefits from multiple coins of the digital money market.
- Avoid Greediness: In as much as there is plenty of profit to be earned from your Litecoin investment, you also need to have an exit plan in mind. You should, therefore, not wait too long to reap all the profits that you predict, but embrace a habit of getting your earnings, then start scouting for a fresh re-entry if you feel that is your main earning point.
Litecoin has excellent potential for growth. Its uses, as well as adoption, keep expanding each waking moment. Reasons are quite many, including the fact that it features high speeds, a more upper coin limit, and overall market capitalization.
Like any other money market, you need to take precautionary measures to avoid volatility and the potential for plummeting prices.