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Litecoin, along with its metaphorical cousins Ethereum, Bitcoin, Ripple etc. has been earning major reputation over the past few years, both good and bad. All of these different kinds of “money” are sometimes collectively referred to as “altcoins”.
They are based on the principles of blockchain technology, and through this system of “alternative finances” you can store and trade these coins, as well as use them for actual payments in the offline world. You can find a comprehensive explanation of how blockchain technology works at this link. For now, here ae some things you have to know if you are considering investing in Litecoin.
What is Litecoin to begin with?
According to its own official definition, Litecoin is a decentralized payment network on a global scale, kept secure by mathematics. The name of the payment network is also applied to the internet currency which is its primary asset of value and its chief medium of payment.
This value system is peer-to-peer based, and due to the fact that it is being kept open-source, it offers its users a lot of power over how they manage their finances on their own.
Alongside Bitcoin, it is one of the most popular digital currencies out there. That said, Ripple is steadily raising in fame and basically taking some of that away, and Ethereum has also always been among the top choices. Also, there is a sort of “offshoot” to consider, a cryptocurrency called Dash which had split from the primary blockchain and is now competing with Litecoin. If you would like to find out more about Dash, feel free to check out this web page: https://www.investopedia.com/tech/what-dash-cryptocurrency/
How is Litecoin different from other cryptocurrencies?
As we mentioned a bit earlier, Litecoin is right up there with Bitcoin, Ethereum, Ripple, and Dash, but there are a few crucial things that make it different from all of them. For the sake of clearer understanding, we can generalize these into three main characteristics.
The first is the method of mining for it. This currency, unlike Ethereum and Bitcoin, relies on Scrypt, a software algorithm, for the purpose of mining coin units. This place a certain level of restriction on people who mine for it, so that they are not able to use custom-built powerful computers (appropriately known as rigs) for the specific purpose of excessive Litecoin mining.
The second thing is the transaction time. When it comes to how long it takes to execute a transaction in Litecoin, it is hands-down among the fastest cryptocurrencies out there. On average, a transaction in Litecoin will take two and a half minutes to complete, as opposed to the ten minutes that you would have to wait when you are trading in Bitcoin. These both seem like fairly short time spans overall, but when it comes to trading currency, every second counts.
Finally, the third characteristic is the very thing that makes it so popular in the first place: among the major crypto, it is the cheapest one. Its price in US Dollars tend to stay in double digits, whereas Ethereum trades in the hundreds, and Bitcoin will easily cost you several thousand.
Okay, so how do you start investing in Litecoin?
Before you can really start anything, you need a digital wallet with a reliable provider, such as Rubix, for example. Keep in mind, at every step of your venture, that this is a risky path to profit.
The important thing is to always remember that altcoins are a form of currency. They behave differently from stocks and bonds. You are not buying shares of anything, but directly trading one kind of money for another. The basic principle is, you buy some amount of Litecoin, wait for its value in comparison to the US Dollar to increase, and then sell it back for more Dollars than you spent buying them.
As we mentioned, you need a digital wallet – your stockbroker has no business here. Use a digital wallet like a regular one – send and receive (crypto)money, make payments for goods and services, buy or sell your Litecoin, and trade in other alt-currencies if you want.
This is a collaborative post.