A deeper look into Litecoin (LTC)

Cryptocurrencies have started 2021 with a significant increase in prices. They are once again attracting a lot of new traders who are always searching for promising cryptocurrencies.

Litecoin is one of the most prominent cryptocurrencies. Charlie Lee created Litecoin in 2011 with the intention to improve on Bitcoin’s weaknesses. You probably are thinking to buy or trade Litecoin, but yet are not sure which one to go with. Take a look below at some of the benefits of trading Litecoin, and find out why it is worth trying. k

One downside that still hasn’t quite reached a promising solution is the fact that Litecoin is still not the best when it comes to instant transactions, and it also boasts high fees at the current moment. Along with the process of mining this cryptocurrency still being less profitable, it’s not of use to rely on, for small-scale payments.

It’s very important for you to consider and know these Litecoin issues, as it serves as a ballpark of what to expect when also considering its advantages, and luckily, they’re not just a few.

Why are Litecoin’s Main Advantages?

The benefits of Litecoin trading include:

1. Litecoin offers more democratic mining
2. Transactions are faster and cheaper
3. You can buy a whole coin for a cheap price
4. It is listed on all major exchanges

Let’s break down these advantages one by one below:

1. Litecoin offers more democratic mining

Litecoin uses an algorithm known as Scrypt, contrary to Bitcoin that uses SHA-256. These algorithms both work on their supported blockchain to solve problems of mathematical nature, in order to be able to know the next transaction block, and then be able to reap the benefits accordingly.

The main difference relies on the fact that Litecoin’s Scrypt doesn’t use the graphic processing units (GPUs) for the mining process as Bitcoin does, but it uses central processing units (CPUs) for mining, which are known to be slower but have an advantage in affordability to graphic processing units (GPUs) that are used in Bitcoin mining. This has an impact in making Litecoin mining more accessible to people and in turn, it results in a more democratic process all along.

2. Transactions are faster and cheaper

Litecoin was one of the earliest altcoins in the cryptocurrency market, and this enabled it to experience a massive popularity spike, which had its rewarding benefits to a lot of investors and miners alike. And also the fact that for the time it possessed quite unique and interesting features was another reason for this rise in popularity. 

A Litecoin transaction on average takes only 2 to 5 minutes to process completely, which is the same time that is required to mine a block. On the other hand, it isn’t any surprise to know that transactions that are completed using Bitcoin can take 10 minutes even.

3. You can buy a whole coin for a cheap price

Due to the fact that buying whole or partial coins ultimately doesn’t impact the amount of gain percentage that investors can earn, many people might not think of cheap prices as a benefit.

Nevertheless, we need to consider the psychological benefits when buying whole coins, as this has an impact on new users being lured in by this option. If I can buy a whole Litecoin for the same price that I would spend if I bought only a small part of a Bitcoin, then why not go with the former? 

In contrast to cryptocurrencies with a higher cap, it’s more likely for Small-cap cryptocurrencies to experience value % gains. This stands true because new users who are interested in investing in cryptocurrencies are after instant gains and higher profit, without considering the risks that much. In this regard, in the next uptrend, we can see Litecoin becoming more profitable than Bitcoin, even though it is considered as much undervalued at the current moment.

4. It is listed on all major exchanges

Lucky for you, if you are interested in buying Litecoin by using your credit or debit card, then you can do so immediately as Litecoin is listed on all the platforms of all major exchanges.

There are a lot of benefits to this but the most important ones are the ability of new investors to easily purchase or acquire Litecoin, minus the process of complicated and tedious side-tasks that are associated with some transactions. All of this without even mentioning the long processes involved, as in this case, they don’t pose a problem.

This also means that higher liquidity is caused by a higher number of exchange listings, and this is a matter of crucial importance to cryptocurrencies. 

Litecoin has a positive reputation in the crypto world and this also helped with its establishment. Some of this is due to the fact it is one of the earliest coins in the market. While we cannot predict the future of cryptocurrencies, experience has taught us time and time again that top-ranking coins have a tendency to be chosen first by experienced investors during bull markets.

You might be interested in buying Litecoin if…

• You don’t have an issue with having to pay upfront for its full price
• You’re okay with paying capital gains tax on profits you make
• You can pay additional deposit or withdrawal fees
• You want to own Litecoin
• You want to gain direct exposure to one underlying exchange per account
• You don’t mind introductory limits or maximum deposits
• You believe in HODLing

You might be interested in trading cryptocurrencies if…

• You want to speculate on the price changes without owning Litecoin
• You want to increase your exposure to many exchanges from the same account
• You want to start trading straight away
• You want to leverage your position by only putting up a small fraction of the price upfront
• You don’t want a maximum deposit limit
• You don’t want to pay deposit or withdrawal fees

 

Takeaways

• Cryptos are once again attracting a lot of new investors who are always searching for coins that promise a lot to invest in.
• One of those coins which aim to give a solution to most problems that Bitcoin is facing at the moment is Litecoin.
• Litecoin is still not the best when it comes to instant transactions, and it also boasts high fees at the current moment.
• It’s very important for you to consider and know the issues of Litecoin, as it serves as a ballpark of what to expect when also considering its benefits.
• Litecoin uses an algorithm known as Scrypt, contrary to Bitcoin that uses SHA-256.
• The main difference relies on the fact that Litecoin’s Scrypt doesn’t use the graphic processing units (GPUs) for the mining process as Bitcoin does, but it uses central processing units (CPUs) for mining.
• Litecoin was one of the earliest altcoins in the cryptocurrency market, and this enabled it to experience a massive popularity spike, which had its rewarding benefits to a lot of investors and miners alike.
• Litecoin at 84.000.000 coins comes with 4 times bigger total supply than Bitcoin, and more transactions are processed on each block which ultimately leads to quicker transaction confirmations.
• In contrast to cryptocurrencies with a higher cap, it’s more likely for Small-cap cryptocurrencies to experience value % gains.