Is LiteCoin Worth Investing In? Here’s What We Know

Not too long ago, investing in cryptocurrency was a hyped, rabid act that could make you millions or make you go broke. Every coin had potential back then. These days, crypto investments are a lot more discerning and far more long-term than they ever were.

Is LiteCoin worth investing in? Though the cryptocurrency took a major plunge last year, most investing experts agree that the coin’s reputation means that it will regrow steadily. If you’re looking for a solid long-term investment, this might be an option. 

Cryptocurrency is a notoriously tricky investment vehicle that comes with exceptionally high risks. Investing in any form of crypto is considered to be an edgy move. But, is LiteCoin really worth it? Let’s look at the facts.

Is LiteCoin Worth Investing In?

It all depends on what you want in your portfolio. If you are looking for some form of stability or a predictable income, trying to get into cryptocurrency is not for you. This includes coins like LiteCoin, as well as more “stable” currencies like the now-notorious Bitcoin. 

If you’re willing to take a huge risk and delve into the world of crypto, then taking a look into LiteCoin as an investment vehicle is worth it. Whether it’s right for you, however, is something you need to determine on your own. 

Who Made LiteCoin?

One of the more important things to know if you want to invest in a cryptocurrency is the people behind the coin. Newbies to the crypto scene may not have the funding, knowledge, or team necessary to maintain a coin, promote it, and create partnerships that would make it a solid choice. 

LiteCoin is a project created by ex-Google employee Charlie Lee, a veteran of the cryptocurrency community. Known for having ties to the mysterious creator of Bitcoin, Satoshi Nakamoti, Lee created LiteCoin as a way to improve on blockchain coding and make a long-term solution to trading. 

This bodes well for both design and stability. 

How Do You Get LiteCoin?

LiteCoin can be either purchased or mined. You can purchase LiteCoin on all major cryptocurrency platforms, including Coinbase. In terms of mining, things get more complicated. 

If you have the proper equipment, you might be able to mine LiteCoin. 

How Is LiteCoin Mined?

LiteCoin can be mined using the Scrypt algorithm. While LiteCoin still uses the SHA-256 algorithm that Bitcoin uses, the Scrypt algorithm takes a lot of the energy usage out of the equation. 

Rather than running parallel equations like Bitcoin, LiteCoin uses a higher percentage of memory. So while you might not need a powerful graphics card, you will need to have more memory on your computer to mine LiteCoin. 

This is done in order to:

  • Reduce the amount of stress on graphics cards. Bitcoin mining has become a process that is only profitable on large-scale operations because of the amount of power required of graphics cards. 
  • Reduce the amount of energy used. Currently, the Bitcoin mining network consumes more energy than several countries. This is unsustainable and has led to serious stress on individual miners. 
  • Democratize mining. By opening up the mining method to individuals, LiteCoin made it possible for individuals to turn a profit. 

Most standard mining software platforms allow users to mine LiteCoin. In terms of accessibility and democracy, this is a good thing. 

Is LiteCoin Worth Mining? 

If you have a high-grade memory card and a dedicated computer, mining LiteCoin is a worthwhile investment. This could be the most low-cost way to get into cryptocurrency without spending too much money. 

The only drawback to mining LiteCoin is that the currency recently halved its mining rewards. This means you won’t make as much money as you would have been able to do so historically. 

Can You Invest In LiteCoin Without Mining Or Buying It?

You can. There are now several firms and platforms that offer cryptocurrency funds, similar to what you would see with funds involving gold or other precious materials. Some of the funds and platforms involving LiteCoin investment include:

  • Grayscale LiteCoin Trust. This fund is available for purchase on the TradeBlock index and acts like a traditional stock. 
  • Grayscale Large Cap Fund. Another Grayscale investment product, this, too, is available on the TradeBlock index. 
  • Abra. Abra is a trading platform that lets you invest in multiple currencies, similar to CoinBase. However, it acts more like a stock index than it does a wallet.
  • Robinhood.  If you use this stock trading platform for your traditional investments, you already know they offer funds and direct investments into cryptocurrency. Currently, Robinhood allows for trading and investing in Litecoin on its platform. 

How Established Is LiteCoin?

Getting a cryptocurrency established and known is the hardest struggle for most coins made today. Without establishing itself as a mainstay, a cryptocurrency will typically go into a “hype” phase during its IPO, followed by a spiral into obscurity. 

Can You Use LiteCoin In “Real” Places?

With the vast majority of cryptocurrencies, finding real-life uses is something that doesn’t happen ofen. . LiteCoin doesn’t have this problem since it has significant partnerships with companies like:

  • WEG Bank AG. It is an accepted currency for a major bank, which is something exceedingly rare in today’s circuit. 
  • Gloryshop.com. This marketplace is one of many sites that dabbled in mainstream LiteCoin use.
  • TravelByBit.com. You can actually purchase travel tickets using the LiteCoin you mined. 
  • Travala.com. This is another site that lets you use LiteCoin for real-life travel purchases. 

The fact that LiteCoin has mainstream use says a lot about its potential as a long-term investment vehicle. 

Does LiteCoin’s Price Fluctuate Frequently?

Not too long ago, LiteCoin was priced at approximately $125 per coin. It has since plummeted to $40, but regained momentum and is now priced at about $60 at the time of this article. This may sound extreme to newbies, but the truth is that all cryptocurrency is bound to fluctuate heavily. 

Top cryptocurrency investment gurus believe that LiteCoin is a more stable coin than most others. Though there have been hiccups in the past, the coin is expected to continue value growth throughout 2020. 

Why Would This Prediction Be Made?

LiteCoin has long since departed from its ICO hype days. Since the majority of investors are seasoned cryptocurrency fans, the chances of it becoming unstable are far lower than newer coins on the market. 

What Is LiteCoin’s Market Cap?

At the time of this writing, LiteCoin has a market cap of $4.73 billion, making it the sixth-largest coin in the cryptosphere. Larger coin user bases equate to a more stable coin price. That being said, it used to be the third-largest coin in use, so there is some risk of dropping there.

Even so, a high market cap like LiteCoin demonstrates serious staying power that most other coins won’t have. You can check prices and market cap on CoinMarketCap all day every day.

Why Was LiteCoin’s Mining Reward Halved?

In January of 2020, Lee reached out to Twitter to tell the community that LiteCoin would be halving mining rewards as a way to avoid market problems later on. By reducing reward, LiteCoin keeps its coin numbers stable and helps promote itself as an established currency. 

Though miners may see smaller rewards, investors shouldn’t be too concerned. Bitcoin has halved its rewards multiple times, with little impact on the overall price of the coin. It’s considered to be a natural part of a coin’s evolution in the market.

How Long Does It Take For A LiteCoin Transaction To Happen?

Transaction time also plays a large role in a coin’s ability to get and keep interest. With LiteCoin, the transaction times can vary based on when the transaction occurred as well as the miner in question. 

The average transaction takes about 2.5 to 3 minutes to complete. However, during times of high trading, a LiteCoin transaction can take up to half an hour to take hold. Since transaction times are smaller, this can lead to better payouts for miners, which makes the matter more democratic. 

Are There Any Unique Security Features That Make LiteCoin Better?

Almost every single cryptocurrency that’s being created today has one or two features to make transactions more secure. LiteCoin is no different in that sense. Their security features include:

  • Immunity To Flood Attacks. In the past, entire coin markets have been victimized by spam transactions that clog trade markets. LiteCoin’s code prevents this through an immunity feature. 
  • Atomic Swaps. It used to be that having a coin exchange (say from Bitcoin to LiteCoin) would require a third party. Lee engineered a new method of transaction that takes the middle man out of currency exchanges and placed it into LiteCoin’s algorithm. This reduces the chance of fraud and hacking immensely while also reducing transaction cost.
  • In-Code Security. This is standard among cryptocurrencies, but it’s worth repeating here. Since there is no centralized coin exchange, it’s up to the coin’s code to be as secure as possible. LiteCoin accomplishes this well. 

Where Do You Store LiteCoin?

If you want to invest directly into LiteCoin without using a proxy (like a stock), then you are going to need to store the coins you buy or mine somewhere. Much like with other cryptocurrencies, you have several different ways of doing this. 

The most popular ways of storing LiteCoin include:

  • CoinBase. CoinBase acts as one of the largest cryptocurrency wallets in existence. It’s a go-to for safe storage, though there have been security issues in the past. That said, it’s an easy way to get access to the coins you bought. 
  • Hardware Wallet. The problem with internet wallets is that you can get coins stolen during a data breach. If you’re concerned about using internet wallets for storage, you can store your coins on a hardware wallet like Trezor One (official store). These are more secure than a typical wallet would be. 
  • Desktop Wallets. Desktop wallets are programs that are downloaded onto a single PC and are used to store LiteCoin. They don’t have much accessibility, and they can be difficult to recover if your laptop is stolen or crashes. However, they’re generally deemed secure.
  • Mobile Wallets. CoinBase is one of the more popular mobile wallets available, but there are others you can choose from as well. If you’re a fan of quick access, it’s an option to consider. 
  • Paper Wallets. If you are very old-school and into high-security levels, printing your keys on a piece of paper that can be scanned via QR codes is also a possibility. 
Trezor cryptocurrency hardware wallet for storing litecoin
Link to the official Trezor One Black Purchase page

LiteCoin Investment Strategies

When it comes to any form of investment, knowing how to invest in it wisely is just as important as knowing whether it’s a good investment vehicle at all. There are two main ways people invest in LiteCoin: long-term and short term.

With both strategies, there are several things to keep in mind, regardless of what you chose to do. Before you make the leap, remember these safety tips:

  • Don’t put all your eggs in one basket. LiteCoin may be great and all, but that doesn’t make it foolproof. Even if it has the potential to reach $200 a coin, it is still a cryptocurrency and has a high level of risk. 
  • Don’t make cryptocurrency your main investment vehicle. The cryptocurrency market is not stable, nor is it regulated. It’s crashed multiple times before, leaving many investors penniless. Even if you choose to invest in LiteCoin, it’s crucial to have solid, traditional investments alongside it. 
  • Know your strategy and stick with it. If you’re capitalizing on short-term fluctuations, stick to your plan. If you are going for the long term, plan to sit on your investment for months or years. 
  • Security is king. Because cryptocurrency isn’t centralized or regulated, there really isn’t any way to recover funds lost to fraud or hacking. If you aren’t storing your investments securely, you’re putting yourself at risk of serious loss. 
  • Cryptocurrency still needs to be reported to the IRS as an investment vehicle. If you win big with LiteCoin, you are still deemed to be liable for taxes paid on it. Make sure to keep your ledgers up to date with any trades you do.
  • Don’t panic. Major market drops and spikes happen on a regular basis in crypto. If you see LiteCoin dropping, don’t panic sell. 

Short-Term LiteCoin Investing

The best way to capitalize on LiteCoin in the short term is to focus on the day-to-day fluctuations–much like regular day traders would do on the stock market. Doing this means keeping a close eye on the price, buying low, and selling high as frequently as possible. 

This is a strategy best performed with large orders of LiteCoin. Even so, these trades can backfire if the timing is off. Some people program their bots to make the trades happen, but that still can carry a risk of its own. 

While short-term investments are often doable with LiteCoin, most investors prefer a cheaper cryptocoin for this method. Dogecoin, for example, is a huge fan favorite among volatility investors.

Long-Term LiteCoin Investing

If you ask cryptocurrency gurus, LiteCoin’s higher price makes it a better vehicle for long-term investment. Since the price of LiteCoin is expected to gradually increase over the year, investing in some coins and just sitting on it as the value increases is the best route to go.

The difficult part about LiteCoin investing for long-term goals is the fact that it’s challenging to figure out when you should sell. The best advice that can be given for this is to avoid trying to sell at “peak time.” If you’re making a profit and want to cash out, then do so. 

When Should You Avoid Investing In LiteCoin?

Crypto investing isn’t for everyone. If you aren’t sure whether it’s a bright idea, it’s a good idea to watch for these signs that you should avoid it:

  • You can’t afford to lose the money you invest. Investments are not something you should do with rent money, especially in a sphere where losing everything is relatively standard. 
  • You aren’t well-versed in tech. It’s unwise to invest in a sphere that you don’t know much about. Less knowledge about tech can leave you open to fraud. 
  • You are prone to panic selling. The crypto sphere is known for being extraordinarily high-pressure and emotionally charged. If you can’t handle the pressure of standard investing, trying to work with LiteCoin is not for you. 
  • You dislike risk. No investment is ever a done deal, but some investment vehicles are far more stable than others. Since there’s no regulation, the risk that you’re taking is far higher. 
  • You’re not a fan of high involvement. Make no mistake about it; investing in crypto is a highly involved ordeal. Traditionally, you’ll need to download software, read up on trading, learn how to do a transaction, and keep up with the news. If you’re looking for a “set and forget” option, ETFs are wiser.

There’s nothing wrong with avoiding cryptocurrency or choosing a different coin. If you change your mind, chances are high that LiteCoin will still be around, waiting for you to invest in it. 

tac

TC first began coding on TRS-80’s in high school in 1979. He has been around since the early days where you had to create a function if you wanted your computer to do something. From there to Atari, Commodore, Apple, and PC, he’s written code for them all. Trained in medicine rather than tech, he kept up with the tech world by writing the occasional utility to help with medical training. He also got involved in tech investing early, and managed to avoid the boom/bust cycle in the 90’s because he recognized that many companies didn’t serve a product that consumers needed. Now he applies this background, training and investing approach to cryptocurrency. He shares his thoughts here while providing educational resources for beginner to intermediate cryptocurrency investors and users.

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