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Most people would say Litecoin is the “silver to Bitcoin’s gold.” By market cap, it is ranked as the third largest digital currency after Bitcoin, with Ripple taking the second place.
Litecoin was founded to act as a Bitcoin alternative to make up for its perceived shortcomings—it was developed to be “lightweight” and be more plentiful than Bitcoin. Moreover, its proof-of-work algorithm is Scrypt which was incorporated to make it immune to ASIC mining. However, a few companies have voiced their plan to launch Scrypt ASIC miners soon.
Processing blocks on Litecoin’s network is fast, a maximum of 84 million coins can be produced, as opposed to Bitcoin where the maximum is 21 million.
What you should know before buying Litecoin;
• Litecoin captured the attention of more speculators in November 2013 after Bitcoin’s price surged, but since then prices have been dropping in parallel. The prices of these two digital currencies are likely to move towards the same direction, even if Litecoin value is much lower compared to Bitcoin.
• Veteran Bitcoin investors should find it easier adapting to Litecoin as opposed to amateurs who might have a hard time because the infrastructure is not as established as in Bitcoin.
• You can alternatively gain Litecoin by using standard computing equipment to mine them.
• Research extensively before you invest and risk only the amount that you can afford to lose.
If after your research you have decided to invest in the Litecoin market, you need to be aware of several potential issues and pitfalls.
Buying Bitcoins is straightforward, not so with Litecoin. This, of course, is not surprising because Litecoin infrastructure is less developed. Buying Litecoin with Bitcoins is one of the simplest ways of purchasing Litecoin; it is also the fastest and the cheapest.
If you have Bitcoin, you buy Litecoin with them easily on several exchanges;
• BTC-e
• Kraken
• Cryptsy
• And several others that you can find on the Litecoin Wiki
Currently, exchanges are not willing to deal in Litecoin which is one of its biggest issues right now. Most of them allow BTC/LTC conversions only. Bitfinex, BTC-E, Kraken, and Crypto-Trade sell Litecoin for dollars, rubles, and euros but again, their availability will depend on where you are.
Purchase Litecoin for fiat on the following exchanges;
• BTC-e
• Bitfinex
• Kraken
• BitBargain UK
• Bittylicious UK
Even buying Litecoin through money wire transfer via an exchange is not so straightforward, since it can be strenuous. For example, Coinbase and BTC China do not deal with Litecoin yet they are major Bitcoin exchanges. And also, the transaction is not as fast.
To make it easier, purchase Bitcoin locally and save yourself the trouble of wiring money abroad to convert it to Litecoin.
Although several exchanges have online Litecoin wallets, they are rarely helpful. Many investors prefer to have secure cold offline wallets. Luckily, Litecoin has a built-in encryption feature that can help you keep your wallet safe in a few clicks.
There are not many Litecoin wallets for you to choose from as Bitcoin. The two primary ones are Litecoin-Qt and Electrum. Carefully read the fine print when selecting a wallet since most of them charge for almost everything including storage.