What is Litecoin and how to buy it?

Bitcoin (BTC) was the first cryptocurrency to be launched, and it was developed as an open-source software. This means anyone can take a copy of Bitcoin’s original codebase and modify it to create a completely new and independent cryptocurrency, also called a ‘source code fork’ of Bitcoin. The creators of the new crypto can incorporate any features they want and the price of the new digital currency is determined by the community that adopts it.

Litecoin is one such fork of Bitcoin that was launched in 2011, just two years after Bitcoin, by ex-Google employee Charlie Lee. It is one of the first altcoins (‘alternate coin’ to Bitcoin) to be launched. 

Charlie Lee wanted Litecoin to be faster in both transactions and mining, making it a great alternative to Bitcoin for both users and miners. He achieved this by swapping the resource-heavy cryptography protocol used by Bitcoin for a lighter and faster cryptography protocol.

Litecoin (or LTC) is a decentralised digital currency just like Bitcoin. It can be used to buy goods and services and for cross-border money transfers. All transactions involving Litecoin are recorded on a secure blockchain (a public digital ledger) called the Litecoin Network. 

Just like Bitcoin, Litecoin uses the Proof of Work (PoW) consensus mechanism to validate transactions and for mining new coins. However, Litecoin transactions are much faster than Bitcoin. It’s also easier and less energy intensive to mine Litecoin than Bitcoin because miners do not have to rely on powerful and expensive GPUs. Litecoin achieves this by replacing the processor-intensive mining mechanism used by Bitcoin with a memory-intensive mechanism. In technical terms, Litecoin uses the memory-intensive scrypt function instead of the processor intensive SHA-256 hashing function used by Bitcoin.

This allows Litecoin transactions to be confirmed in only two and a half minutes, four times faster than Bitcoin’s confirmation time of 10 minutes. Litecoin is thus able to process transactions faster and at higher volumes. However, the speed of processing transactions does come at a cost. The scrypt function uses fewer rounds of verification (making it faster), which means security and authenticity are not as high as that of Bitcoin.

Litecoin is a widely traded cryptocurrency and can be purchased through many different cryptocurrency exchanges. You can sign up with any exchange you choose and invest an amount you are comfortable with into Litecoin.

To buy, sell or trade Litecoin:

• Make sure to compare crypto exchanges to analyse their fees, features and benefits to pick an exchange that suits your investment style. Consider checking if an exchange is registered with AUSTRAC to ensure it complies with local laws and regulations.
• Create an account on your chosen platform and complete the KYC process, which is a legal requirement in Australia
• Once your account is active, transfer funds using supported payment methods (credit card, PayPal, etc.)

With funds in your crypto wallet, you can buy and trade Litecoin or any other supported cryptocurrency.