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Litecoin’s popularity, design and purpose have many people asking how to buy Litecoin as it does have the potential to overtake Bitcoin in the near future. In this article, you’ll learn exactly what you need to get started in detail with Litecoin!
An Overview of How to Buy Litecoin
Create a wallet that can store Litecoin
Connect your bank account
Buy your Litecoin!
A Quick History of Litecoin
When learning how to buy Litecoin, it’s important to know a little but about it: Litecoin is a digital cryptocurrency that was created back in 2011 by Charles Lee. After observing Bitcoin’s launch, successes and drawbacks with creating online income, Litecoin was developed to improve and to build on Bitcoin’s technology.
In a lot of ways, Litecoin was designed to become its rival.
It also has a deflationary supply style where there is a maximum coin cap limit. This means that there will only ever be 84 million LTC in existence. Fiat currencies do not follow this standard and central agencies, like a government entity, can dictate the creation of more money which directly affects its value.
Another thing to note is how fast transaction times are. Litecoin harnesses a fast algorithm called Scrypt thus improving its transaction times. Like Bitcoin, Litecoin currently averages about 10 minutes to process and confirm transactions.
Do remember that learning how to buy Litecoin is just one method of getting your hands on some: you can also mine Litecoin.
Buying Litecoin Step-by-Step
Create a Litecoin Wallet
The first thing you need to do is to make a wallet. This will act as a storage space for Litecoins you purchase or want to sell.
You can read more in our article which details the step-by-step process for setting up a wallet and picking the best option.
The most common and easiest to use wallet is an online Wallet, such as Etoro and Coinbase. After you’ve set it up, you can use your LTC to purchase items and trade just like any other ‘regular ‘wallet. This is a perfect option for small, daily transactions.
Another option is a software wallet like Electrum. This is placed on your computer and be used offline, thus making it more secure and better to prevent possible threats from hacking. The third and safest possibility is a hardware wallet like Ledger Nano
Pick One of The 3 Options for Buying Litecoin
Litecoin, like most cryptocurrencies, can be purchased on almost all of the major crypto exchanges. This includes trading platforms, direct trading and cryptocurrency brokerage systems.
Here is a summary of each one and how they work:
The best way to describe a trading platform is like a marketplace connecting those who are interested in making money. Usually, trading platforms will have a live market chart where you can track how much people are buying and selling that day, hour or minute.
This is a great option for many who are wanting to get down and dirty with the cryptocurrency trading industry, as people who want to trade may find platforms to be more preferable in order to get the most bang for their buck. Moreover, you can see exactly how the market values Litecoin at that very moment.
When you want to buy or sell LTC, you can either set a specific price or a minimum and maximum range. When someone else matches the bid, the trade is made. From there, you just need to wait for your trade to be processed and confirmed. After confirmation, you will have access to your LTC.
Trading platforms like Etoro and Coinbase may offer a few options on how to buy Litecoin: Some will let you link your credit card, bank account, or PayPal account directly to the exchange so you can transfer a designated amount of your fiat currency to the exchange to buy Litecoin directly. You can also use other cryptocurrencies like Bitcoin and Ethereum to purchase Litecoin through your Litecoin wallet.
Keep in mind that most if not all trading platforms will also have a transaction fee that will be charged in cryptocurrency. When you look into what the transaction fee costs, be sure to convert the cryptocurrency fee into a fiat currency value so you know if it is or isn’t acceptable for you.
If, for example, the transaction fee is 1 LTC, it might sound cheap until you convert it into USD and realize its market value currently stands at something like $80!
If you aren’t as keen on following a live market and waiting for your bids to be matched, or creating your own investment strategy, a cryptocurrency broker may be an easier option for how to buy Litecoin. While it has many of the same features as a trading platform, a broker will provide a set exchange price for buying and selling Litecoin. There is no negotiating between multiple buyers and sellers.
Brokers will also charge a premium of between 5% to 15% depending on who you chose. So, if you are learning how to buy Litecoin and want to do so without feeling like an open marketplace is too overwhelming, a broker like Etoro may be the best fit for you, but it is obviously more expensive than doing it yourself.
Unlike the first two options, direct trading or peer-to-peer trading works with no middleman or exchange.
Usually, direct trading will happen between two people who may already be familiar with each other: One person will sell Litecoin at an exchange rate of their choosing, and the person buying must decide whether or not to accept. While there is more power given to the seller compared to the buyer, there are also no additional transaction fees or premiums to consider.
Your Final Steps for Buying Litecoin
Whether it’s a trading platform, cryptocurrency broker or direct trading, you must make sure you keep your transactions as safe and protected as possible. When learning how to buy Litecoin, here are a few things that all reputable exchanges will ask of you:
Verify Your Identity
Many reputable exchanges may have a free registration but won’t let you buy any cryptocurrency until you have verified your identity. Usually, this requires a photo ID and maybe a current photo. Once this is confirmed, then you will be allowed to use an exchange’s full features.
Exchanges require this to ensure that the people who are buying and selling are real and not a bot or even fake accounts designed to hack the exchange.
Set Up Additional Security
If an exchange offers 2-factor authentication, it’s recommended that you enable it. This way, you add another layer of security in case someone else tries to log in to your account.
Setup a Payment Method
Depending on where you want to buy Litecoin, you will be asked to choose a payment method. You may choose to buy directly with fiat currency or you can also purchase Litecoin with other cryptocurrencies like Bitoin.
There will be an option to link your exchange account with your credit card, PayPal, bank account or even Litecoin wallet.
Whatever payment method you choose, a reputable exchange should be able to offer most payment options. Note that some may not offer PayPal for security purposes. But, with a verified ID and added security measures, having clear options for method of payment should be evident when choosing a Litecoin exchange platform.
The Last Step: Buy Your Litecoin!
And that’s it! That’s how to buy Litecoin! Very easy, right?