Buying Litecoin 101
Litecoin was founded as an alternative to Bitcoin and was developed to fix some of Bitcoin’s perceived shortcomings. Litecoin was essentially created to be a ‘lightweight’ alternative to Bitcoin. With the potential to be more plentiful and numerous than Bitcoin. Also, scrypt is its proof-of-work algorithm, guarding it against ASIC mining (even though a few companies have said they are going to shortly launch scrypt ASIC miners).
The Litecoin network processes its blocks faster than Bitcoin. The network can produce the total amount of 84 million Lite coins, as opposed to 21 million BTC on the Bitcoin network. If you want to learn more about Cryptocurrency, you can read this introduction covering the basics of Cryptocurrency.
How to Buy Litecoin
There are a few different options when it comes to buying litecoin. Here will go over a few of the most basic options so you can begin to understand how to trade, buy or sell litecoins.
Things to note before you buy Litecoin:
- Following Bitcoin’s price growth in November 2013, Litecoin became a lightning rod for speculators. But, since then, prices have fallen in parallel. The two cryptocurrencies’ prices will likely move largely in the same direction, even though the value of Litecoin is by far the lesser of the two.
- Bitcoin investors who are seasoned should not have any issues with getting used to Litecoin. However, new investors may struggle because the altcoins’ infrastructure is not as grounded than that of Bitcoin.
- You can also gain Litecoins by mining it with regular computing equipment.
- Make sure you do careful research prior to investing your money and don’t risk amounts of money that you can’t afford to lose.
Buy Bitcoins for Litecoins?
Purchasing Litecoins isn’t quite as simple as it is with Bitcoins, which is hardly a shock given the infrastructure of Litecoin, which is lesser-developed. One of the simplest ways to buy Litecoin is by purchasing them as CFDs (Contract for difference) – this also is the quickest and cheapest option for most users.
You might think the easiest way to buy Litecoin would be using a fiat wire transfer, in which you would use an exchange, yet this is an arduous process because some main Bitcoin exchanges, such as Coinbase, does not currently handle any Litecoin transactions.
One of the most apparent advantages of using Bitcoin to buy Litecoin is expediency. Theoretically, this exchange should take only a few minutes. However, international wire transfers can take a number of days to process and clear, meaning you will potentially incur some additional expenses. The limited amount of Litecoin exchanges ensures that a large segment of possible investors has to depend on international transfers to do business.
Alternative Methods for Buying Litecoin
An alternative to this process is to locally buy Litecoin and therefore, forego the inconvenience of having to wire money internationally and to convert it into Litecoin. The positive side is that you’ll receive your Litecoin sooner. It’s possible that you will get a great price when converting it, provided that the Litecoin price continues to increase. The downside to this process is that it’s likely that you will spend more on Litecoin if you’re limited to a local market.
Trading Litecoin CFDs
When you trade Litecoins as CFDs, there is no worry that your Litecoins will be stolen. CFDs are a derivative product. Any potential profits are based on the movement of the litecoin price. However, no actual Litecoins are purchased.
Litecoin trading can be extremely profitable for all level of traders. The Cryptocurrency market is fairly new, highly fragmented as well as having huge spreads. Therefore, arbitrage and margin trading are widely available.
Litecoin has become the leading competitor to Bitcoin, and now you can trade this impressive digital currency with some of the top online brokers.
When you buy Litecoins online as CFDs with a regulated broker, you can trade long or short and buy or sell instantly. This gives you the extra advantage of being able to act on your analysis of the future of digital currency.
Here at TopBrokers.Trade, we take pride in providing the best possible online trading broker comparison, reviews and ratings. These reviews enable you to select the best trading platform for your needs. We don’t just help you to pick a great place to trade, but also do everything that we can, to show you how to get started. For more information on Cryptocurrency trading please see our tutorial: The Basics of Cryptocurrency. If you are looking to trade Litecoin CFDs take a look above for our top recommendations.
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