Should i invest in Litecoin?

Litecoin was originally created in 2011 after it forked an updated version of the Bitcoin client. This is why it’s sometimes called Bitcoin-Lite! Don’t worry, this will all be explained!

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Should I Buy Litecoin: What Is Litecoin?

Litecoin, also known by its currency code LTC, was created by Charlie Lee in 2011. Lee wanted to change the Bitcoin blockchain to make it “lighter”, meaning that it can process transactions quicker and cheaper. 

Mining

Mining Bitcoin has now become very difficult for people who do not own expensive hardware. When people mine Bitcoin, they use their computing power to help verify transactions on the network and receive extra Bitcoin as a reward.

Although you never actually see what is happening, this extra power solves really difficult mathematical problems. These problems are so difficult that no human could solve it, that’s why we use supercomputers! This is what makes blockchain technology so secure and decentralized.

However, as more and more people use Bitcoin, the network becomes larger. There are more computers trying to mine Bitcoin, which means more competition. So, the hardware needed to be a successful miner becomes more and more expensive and requires more electricity.

Litecoin solved this problem by changing how the blockchain verifies transactions. Instead of using expensive ASICS (application-specific integrated circuit), it uses GPUs (graphics processing units). GPUs are much cheaper and use less energy, meaning that anyone can mine Litecoin!

If you’re not quite sure what that jargon means — basically, ASICS and GPUs are different types of computer hardware.

Transaction Speeds and Fees

The time it takes for a Bitcoin transaction to be confirmed is around 10 minutes. In the real world, this is quite slow. As Litecoin is a lighter version of Bitcoin, it is able to average transaction speed of around 2 ½ minutes!

By allowing people to use GPUs to mine, this speeds up the network for everyone. Quicker transaction fees aren’t the only benefit over Bitcoin that Litecoin has. The average cost to send a Litecoin transaction is $0.23, whilst the average Bitcoin transaction costs $2.83.

So, as you can see, there’s quite a difference, right?

No Threats of a Flood Attack

In 2015, the Bitcoin client experienced a flood attack, where hundreds of thousands of spam transactions were sent to the network! The purpose of a flood attack is like a virus — bad people try to damage a system.

Imagine if somebody sent you 200,000 emails at the same time. The network would not be able to process so many transactions (emails) and it would cause the server to break!

Charlie Lee noticed the threats of flood attacks when he was building Litecoin in 2011 and set out to make sure this would not happen to his blockchain! Litecoin aims to resolve the scalability issues that Bitcoin has — which means to allow more transactions to happen at a single time on the network.

So, now you know some background information about Litecoin, let’s have a look at whether Litecoin is a good or bad short-term investment.

Should I Buy Litecoin as a Short Term Investment?

When people invest money in cryptocurrency, they should decide whether they want to hold their coins for the short term or the long term. When we describe an investment as a short term, we generally mean between 1-12 months. However, more experienced traders might see a short-term investment of days, hours or even minutes!

This could be because investors are expecting an event to happen that will increase the value of the coin, but then they expect the price to decrease after. For example, if you made a short-term investment in Unikoin Gold (UKG) between November 2017 and February 2018, you would have made over 600% profit! That is an example of a good short-term investment.

However, if you held on to it for much longer, the value would have gone down to its original price! So, now that you know what a short-term investment is, let’s have a look at some advantages and disadvantages of short-term investing in Litecoin.

Advantages

• High trading volume: Litecoin has been trading since 2011 and is an established top 10 coin. Meaning that it is a popular choice for investors. If a cryptocurrency has a high trading volume, it means you will have no problems finding buyers to sell to. If there are low trading volumes, it means you could find it difficult to find a buyer!
• Listed on Coinbase: Coinbase process more cryptocurrency transactions than any other exchange, even though they only have four coins listed! One of these is Litecoin, meaning that you can easily buy and sell your coins. Even better, you can deposit and withdraw in real-world money! This is a huge advantage Litecoin has over other coins.

Should I Buy Litecoin as a Long-Term Investment?

When people invest in a cryptocurrency long term, they expect their value to increase slowly. This generally means that they do not expect a lot of market volatility and that the coin is low risk. For less experienced traders who can’t handle large price movements, long-term investing is more suitable! A long-term investment is normally for 1 year or more.

Advantages

• Full-time leadership: Charlie Lee, the creator of Litecoin, now works on the project full time. Lee also has a team of highly experienced blockchain experts that are helping the company to grow.
• Established: Litecoin is one of the most established cryptocurrencies, with more than 7 years of trading. In fact, it was the first ever alt-coin! This makes Litecoin investing less of a risk compared to some of the newer coins.
• Small Investments: If you are looking to make a long-term Litecoin investment, you can invest small amounts on a regular basis. This will allow you to protect yourself from any short-term price movements.

You should consider investing in litecoin today.