Beginner’s guide to buying and storing Litecoin

The authors, TM Lee and Bobby Ong, are the founders of CoinGecko, a site that ranks the potential of altcoin.

If you are new towards cryptocurrency, you might just have heard about Bitcoin. However, you might be surprised to know that there are actually many more cryptocurrencies around the world. Known as alternative cryptocurrencies, or simply altcoins, they are less developed compared to Bitcoin. With each altcoin claiming to change the financial industry in the coming years, it is hard to evaluate which of those is worthy of an investment. One of the stronger altcoins in the market currently is Litecoin.

Bitcoin emerged as the world’s first cryptocurrency after its launch by Satoshi Nakamoto in 2009. The code is open source, allowing anyone to freely modify and use it for other projects. Due to the popularity and success of Bitcoin, many other cryptocurrencies were launched with a modified version of the code.

Litecoin was a fork off the Bitcoin source code by ex-Googler, Charlie Lee. Lee, who now works at Coinbase, tweaked Bitcoin’s code by changing the hashing algorithm from SHA-256 to Scrypt. Charlie also gave Litecoin 84 million coins, four times more than Bitcoin’s 21 million. He also made some changes by giving Litecoin a mining reward of 50 coins per block, a block time of 2.5 minutes and halved the reward every 840,000 blocks.

Litecoin’s potential

Using Scrypt instead of SHA-256 allowed for fairer mining as the Scrypt algorithm is more memory intensive and allowed for lower barrier to entry for the hobbyist miner. Litecoin was initially created to be ASIC-resistant. ASIC, which stands for Application-Specific Integrated Circuit, is a customized integrated circuit that serves only one purpose – cryptocurrency mining. This requires intensive investment in purchasing and upgrading of the ASIC miners over time. It was not long before Scrypt ASICs became profitable to be produced and these ASIC miners started hitting the market in May 2014.

The shorter transaction time of Litecoin allows for transactions to be confirmed much faster than Bitcoin’s. Litecoin was launched in 2011 and differentiates itself by claiming to be the “silver” to bitcoin’s “gold”. Litecoin has proved its capability with the third-largest market capitalization of approximately $128 million, placing it just behind Ripple and Bitcoin.

Quick facts

Buying and trading Litecoin

Litecoin wallets

Securing your wallet

Closing thoughts