Cryptocurrency, at least in the public eye, has largely been seen as risky and uncertain over the past several years due to its volatility. Basics of Litecoin and Why It’s a Better Choice Than Bitcoin will be discussed in this article.
However, that doesn’t mean it isn’t a worthwhile investment opportunity. It just means you have to be smart about how you approach it and make sure your strategy takes into account risk and reward.
What is Litecoin?
Litecoin is one of many altcoins that can be traded on exchanges. The first time it was introduced, it was considered as silver in comparison to bitcoin’s gold status. Due to its open source protocol, it allows for faster transaction confirmations (2.5 minutes on average) and uses a memory-hard, scrypt-based mining proof-of-work algorithm to target the regular computers and GPUs most people already have for mining coins like bitcoin instead of requiring specialized hardware.
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To start with, it’s helpful to understand how cryptocurrencies like bitcoin work. Unlike traditional currency, cryptocurrency doesn’t exist in physical form. Instead, all transactions are recorded in an online ledger that is called a blockchain.
Transactions made using cryptocurrency allow for anonymity. If you make transaction using regular currency, your name and other details are attached to that transaction on record at your bank or financial institution.
How To Buy Or Sell Litecoins
Getting started with litecoins is easy. You can purchase them on any major cryptocurrency exchange, or you can use a number of different wallets to manage your litecoins. Exchanges like Bittrex, Bitstamp, and Kraken all offer excellent options for managing your litecoins, although for security purposes we suggest using an official wallet. For more information on where to buy or sell litecoins, see our in-depth guide here.
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What to look for in an litecoin wallet: Your litecoins are stored in your wallet, which is just an address on the blockchain. With most wallets, you can use private keys or seeds to access your account and perform transactions. Some wallets will even let you purchase additional litecoins directly from their interface.
How to Store Litecoins?
Once you’ve received your litecoins, you’ll need to move them into storage. This can be done in one of two ways: storing them on an exchange or in a wallet. The first option is best for people who want to keep up with changes to their cryptocurrency, because it allows people to trade coins almost instantly. The second option is better for people who want more security and control over their funds.
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That being said, keeping your coins on an exchange means you don’t control your private keys, so it’s important to move them into a wallet as soon as possible.
How are Transactions Confirmed On The Blockchain?
Blocks are collections of transactions, typically represented by hashes. Blockchains confirm these transactions by including them in their blocks. As long as more than 50% of nodes on a network agree that a block is valid, it will be added to consensus to become part of the blockchain. So what does mining do?
Mining is how transactions are confirmed on a blockchain. All proof-of-work blockchains require miners to solve difficult problems before adding new blocks to consensus.
How can I spend my litecoins online?
While litecoins are gaining popularity, they are still relatively unknown to many online merchants. As they become more popular, you can expect online merchants to accept them, but as with any form of payment, you should proceed with caution when using them.
Always read reviews or check ratings before purchasing anything online with your litecoins. You can also find ways to spend your litecoins offline by visiting local businesses and asking if they accept them as payment.
Should I invest in litecoins?
Like other cryptocurrencies, litecoins are bought, sold, traded, and mined. You can think of it as something like gold or silver—instead of buying litecoins with money, you’re trading your goods or services for them.
However, litecoins have their unique features that set them apart from others in their field. If you’re looking to invest in cryptocurrencies but aren’t sure where to start, it’s worthwhile to look into what makes litecoins so special.