How to Buy Litecoin

 

People have often described litecoin as silver to bitcoin's gold. It is the third largest cryptocurrency after bitcoin by market cap, with Ripple sitting in second place.

Litecoin was developed as a bitcoin alternative to address some of that cryptocurrency's perceived shortcomings. It was designed to be ‘lightweight’ and more abundant than bitcoin. In addition, it uses scrypt as its proof-of-work algorithm, which was aimed to make it impervious to ASIC mining, although several companies say they are planning to launch scrypt ASIC miners in the near future.A total of 84 million litecoins can be produced on the network (compared with 21 million BTC), which was designed to process blocks faster than bitcoin. If you would like to know a bit more about litecoin, then read this more detailed introduction on how to get started.Some points of note before you buy litecoin:

• Litecoin became an increasing magnet for speculators after bitcoin's price surge in November 2013, but prices have since dropped in parallel. You can expect the two cryptocurrencies prices to largely move in the same direction, although litecoin's value is by far the lower of the two.
• Seasoned bitcoin investors should have no trouble adapting to litecoin, but novice investors may not find it as easy, as the infrastructure is less established than that of bitcoin.
• An alternative way of gaining litecoins is by mining them using standard computing equipment.
• Always do your own research before investing funds, and do not risk amounts you cannot afford to lose.

If you are aware of the risks, if you’ve done a lot of research and you are still willing to enter the litecoin market, there are a number of potential pitfalls and issues that need to be addressed.

Cash for litecoins or bitcoins for litecoins?

Buying litecoins is not as straightforward as buying bitcoins, but this is hardly surprising given the lesser-developed litecoin infrastructure. One of the easiest ways of buying litecoins is to simply purchase them with bitcoins – this approach also happens to be the fastest, and for most users it will be the cheapest option.Anyone with a stash of bitcoins can easily use them to purchase litecoins on a number of exchanges:

• BTC-e
• Kraken
• Cryptsy
• Others are listed on the Litecoin Wiki.

At present, one of the biggest issues facing litecoin is the lack of exchanges willing to deal in it.There are roughly two dozen litecoin exchanges, but most of them only allow BTC/LTC conversions, making the buying process cumbersome.BTC-E, Bitfinex, Crypto-Trade and Kraken sell litecoins for euros, dollars and roubles, but availability depends on your location. For example, UK investors can buy litecoins directly from Bittyliciousand BitBargain with a domestic banking transfer, but this is not the case in most countries. Australians can convert to and from AUD at CoinSpot.You can buy litecoins for fiat on these exchanges:

• BTC-e
• Bitfinex
• Kraken
• BitBargain UK
• Bittlylicious UK

You may think the most straightforward way to purchase would be to buy litecoin via fiat wire transfer using an exchange, but this can be a tedious process for a number of reasons. Some major bitcoin exchanges like BTC China and Coinbase do not handle litecoin transactions at present.Speed is the most obvious advantage of using bitcoin to buy litecoin. In theory, it should take just minutes, whereas international wire transfers can take days to clear and potentially incur additional costs. The limited number of litecoin exchanges means that the vast majority of potential investors have to rely on international transfers.An alternative is to buy bitcoin locally, forgoing the hassle of wiring money abroad, and converting it into litecoin. The upside is that you will get your bitcoin sooner and possibly get a better price when you convert it, provided litecoin's value keeps going up. The downside? You are likely to pay more for bitcoin if you are limited to the local market.

Litecoin wallets can be problematic

A number of exchanges offer online litecoin wallets, but they are hardly elegant solutions. Many users will want something more secure, like cold offline wallets. Luckily, litecoin features built-in encryption that you can use to protect your wallet in just a few clicks.That said, the choice of litecoin wallets is rather limited compared to those available for bitcoin. Many users choose to use the official Litecoin-Qt desktop client, but it has its fair share of foibles, including reported syncing issues. Electrum also has an offering (OS X/Linux/Windows) using a 12-word security passphrase (or 'seed') to protect your account.A few online wallets charge users for transactions and even plain storage, so be sure to read the fine print.For longer-term cold storage, you may want to setup a litecoin paper wallet.It is also possible to get credit card-quality ‘paper wallet’ cards from Crypto Coin Wallet Cards, while a few smaller companies are already selling physical litecoins or coin holograms.You can keep up to date with the latest litecoin news here. Litecoin network data can be found here.