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Cryptocurrency

How To Make Money With Litecoin

By David Krug 6 minute read

Are you considering investing in cryptocurrency? Determine whether investing in Litecoin is the best choice for you. Cryptocurrencies are rapidly gaining popularity as an investment vehicle. Although the majority of people are familiar with Bitcoin and Dogecoin, there are dozens of other cryptocurrencies. Litecoin is one of these cryptocurrencies, occasionally referred to as “digital silver” in contrast to Bitcoin’s “digital gold.”

If you’re searching for a more affordable cryptocurrency, Litecoin may be a good option. Here’s all you need to know about investing in Litecoin.

About Litecoin

An alternative currency is Litecoin. A fork of Bitcoin is a digital currency based on blockchain technology. Due to the open-source nature of the Litecoin network and its worldwide reach, users may send payments to anybody on the planet in only a few minutes. Litecoin is a type of cryptocurrency that’s considered an alternative to traditional fiat money.

Litecoin was created by computer scientist Charlie Lee as a rival to Bitcoin. “Lighter” than Bitcoin was his objective, something that could be mined by the ordinary user and complete transactions faster than Bitcoin. Litecoin is anticipated to issue four times as many coins like Bitcoin.

Litecoin was invented by Lee because he wanted to use the Scrypt method to prove the network’s existence. The most popular Scrypt currency is Litecoin. Scrypt is designed to reduce the risk of mining being overly concentrated. Anyone with a computer may participate in the Litecoin Scrypt mining pool by donating the processing power needed to complete the transactions. Coins are given out after a block is completed. When mining Litecoin, like with Bitcoin, the payout steadily decreases over time, which is termed halving.

Even if “fiat money” issued by central banks and governments can be exchanged for cryptocurrencies like Litecoin, they are separate from cryptocurrencies. In other words, there is no central authority behind Litecoin or any other cryptocurrency. As opposed to that, a cryptocurrency can only be used by those who choose to accept it as payment.
Before investing in Litecoin or any other cryptocurrency, have a look at our introduction to cryptocurrencies for beginners.

Should you invest in Litecoin?

When considering how to invest your money, you have a number of options, one of which is figuring out the best way to acquire cryptocurrencies. Litecoin is gaining popularity as a Bitcoin alternative, particularly among those who believe the digital currency is overpriced. 

There are a few investors who aren’t happy with the thought that Bitcoin is nearing a peak, even though it is feasible to acquire fractions of a cryptocurrency. Litecoin, on the other hand, isn’t a great investment for everyone. Due to the volatility of the cryptocurrency market, it may be wise to limit your investments in Litecoin and other cryptocurrencies.

Diversifying your bitcoin assets is a good idea since it’s similar to diversifying your stock portfolio. Because cryptocurrencies are a new asset class, there is a lot of uncertainty about which coins (if any) will catch on with the general population.

Litecoin (LTC) is in my portfolio, but I also have Bitcoin (BTC), Monero (XMR), Ethereum (ETH), and a few other lesser cryptocurrencies, such as Dogecoin (DOGE). However, many of these lesser cryptocurrencies like DOGE are only experiments.

When I acquire cryptocurrencies, I only spend money that I can afford to lose. With the recent volatility and gains in bitcoin, my overall exposure to alternative assets is approaching 10% of my investing portfolio.

Pros and Cons

Pros

  • Faster than the Bitcoin transaction speed
  • As many transactions per second as Bitcoin or Ethereum can handle.
  • Reduced transaction costs
  • Easy-to-follow mining procedure

Cons

  • Not as well-known or commonly used as Bitcoin.
  • On the dark web, Litecoin is a popular currency.
  • Litepay’s collapse has raised doubts about the company’s integrity.

How to invest in Litecoin

In order to invest in Litecoin, all you have to do is follow these simple steps. Litecoin may be purchased and sold using a variety of applications and other means.

Investing apps

Robinhood and Webull are applications that allow you to trade cryptocurrency. When you invest through these trading sites, you don’t truly own the coins involved. IOUs are used instead. Wallets and the ability to move Litecoin straight into and out of these brokerages are therefore not available.

Neither Robinhood nor Webull charges any fees for trading. Even if you don’t pay a charge, it’s crucial to know that there are restrictions to the ways in which you can trade. Limit orders are used by Robinhood for crypto trading because of the volatility of the price. When a crypto transaction is made, Webull uses a spread on both sides of the deal to function. The brokers can still profit from your transactions, even though you aren’t paying any fees directly.

Cryptocurrency exchange

The use of a cryptocurrency exchange is another option for purchasing Litecoin. You may buy coins using a bank transfer, credit card, or debit card at these exchanges, as well as trade-in your old coins for new ones.

Coinbase, Kraken, Gemini, BlockFi, and Binance are some of the finest cryptocurrency exchanges. If you’re looking for the best cryptocurrency exchange for your needs, you’ll need a lot of studies. To get started, take a look at our comparison of Kraken, Coinbase, and Gemini.

Depending on the coin you’re dealing with, several crypto exchanges impose fixed fees for every trade. Trade Litecoin with an eye on fees so you know how much each trade costs.

PayPal

Paying using PayPal is another option for purchasing Litecoin. Litecoin, as well as Bitcoin, Ethereum, and Bitcoin Cash may be purchased with a PayPal Cash or Cash Plus account. You can buy a coin with your account and keep it for as long as you wish, or you may sell it later.

A brief discussion on digital wallets.

Having a digital wallet is essential if you plan to trade cryptocurrencies. The digital information about your Litecoins or other currencies is stored in this wallet. Coinbase, for example, provides a crypto wallet that you may use. In addition to receiving and exchanging Litecoins, you may also purchase and sell the currency.

You may also purchase a wallet on its own. To prevent unauthorized access, these wallets use their own private keys that cannot be accessed via the internet. You plug them into your computer just when you need to complete a transaction, making them a lot like a USB flash drive.

Wallets that make sense for your scenario should be sought out. When it comes to Litecoin, I store the majority of my investment in a physical cold wallet. My water- and fire-resistant document safe is where I keep that wallet. The cryptocurrency I’m most likely to trade regularly is stored in a Coinbase digital wallet.

Your coins must first be sent to an exchange, where they may be exchanged for fiat currency like the US dollar before you can cash out. After that, you’ll be able to use your linked bank account to make withdrawals. Let’s say I sent some Bitcoin from my cold wallet to my Coinbase account in late 2020. I was able to convert part of my Bitcoin into US dollars and then transfer it to my bank account when I was ready to do so.

Bottom line

If you are looking to diversify your investment portfolio, Litecoin may provide a lower-cost option to Bitcoin. The cryptocurrency market, on the other hand, has a higher level of risk than traditional forms of investment. Investing in Litecoin should only be done with money you can afford to lose, and diversifying your portfolio should be done in accordance with your risk tolerance and financial objectives if you decide to get started.

David Krug

Author