Is Litecoin (LTC) Safe?

Last Updated January 6th 2022
6 Min Read

If Bitcoin were the digital gold, Litecoin would be the silver. Created by ex-Google computer scientist Charlie Lee and launched on 13th October 2011, Litecoin has grown into one of Bitcoin’s earliest and most successful forks. The crypto was so successful that it has one of the longest streaks as a top 10 cryptocurrency by market cap and was at one time the third-largest digital currency.

A mix of poor management led by Charlie Lee’s abandoning ship in 2017 and selling most of his Litecoins, low adoption/acceptance even though it is faster and cheaper than Bitcoin, as well as stiff competition from newer and more radical altcoins have, however, seen its popularity fall drastically. It has also lost its position among the top 10 cryptocurrencies and is currently ranked 24th by CoinMarketCap, with a live market capitalization of $9 Billion.

There nevertheless is a level of optimism about Litecoin’s future, especially now that Charlie Lee is back to heading the Litecoin Foundation. But, like most other crypto investors/traders, you must be asking if this is enough. If Litecoin is a safe investment?

Well, we answer that by looking at the risks facing the cryptocurrency, how to keep your LTC investment safe, and everything you need to consider before buying LTC.

Read on.

What To Consider Before Buying Litecoin (LTC)

First, you need to appreciate that Litecoin is one of the more stable cryptocurrencies and will possibly outlast most altcoins its age.

Even with the soiled reputation and debilitated investor confidence, especially for its earliest investors, Litecoin still stands solidly as a top 20 cryptocurrency. Most crypto experts/investors are, therefore, banking on this resilience, and the fact that it has multiple real-world use cases interpret these as saying LTC will eventually rebound.

Drawing inspiration from both technical and fundamental analysis, most crypto experts are confident that Litecoin’s value will continue rising in the foreseeable future. The conclusion is informed by the relevance of its blockchain technology, an active development team, and a clear roadmap, which makes it a tad safer than such meme currencies as Dogecoin or Shiba Inu.

You will also need to consider the fact that the crypto industry is evolving fast, and some experts have frowned upon Litecoin’s blockchain and considered it outdated. They aren’t confident that it can keep up with the fast-paced environment where newer networks have more use cases (from DeFi to NFTs) and are on the verge of interoperability.

Read Also: Is Litecoin (LTC) A Good Buy?

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

What Are The Risks Of Associated With Buying Litecoin (LTC)

A soiled reputation has been Litecoin’s biggest undoing. It all started when Charlie Lee sold most of his LTC coins during the 2017 peak prices and abandoned the LTC project to work for Coinbase. The move led to a massive loss of investor confidence in cryptocurrency. A series of blunders, including the recent (now deleted) tweet about Litecoin network’s partnership with Walmart, which Walmart termed as fake news, has also sparked a debate about possible mismanagement of the Litecoin Foundation. If this continues, you can expect the coin’s value to drop further as more investors and traders lose interest in LTC.

Additionally, Litecoin is not immune to the threat of losing funds to hackers or that of price volatility. Investor wallets and crypto exchanges holdings Litecoins have come under serious attacks from hackers. It is also not uncommon to have Litecoin prices jump by double-digit percentages within a relatively short period. Such volatility, when down trending, is hurtful to both investors and traders and often leads to loss of significant funds, especially if you were margin trading.

Others Scams to Look out for

Fake websites and phishing

Kaspersky listed imposter websites, fake mining hardware, and fake crypto wallets among the most common ways of losing money in the crypto industry today. Criminals are using them to lure naive crypto investors into surrendering login credentials to their wallets and exchanges, unknowingly, to looters who use them to steal their crypto holdings from them. The antivirus company especially notes that most of these fake websites have a “higher than usual level of detail” aimed at making them as convincing as possible.

Online scams like Ponzi/pyramid schemes

The Federal Trade Commission (FTC), on the other hand, reported that crypto scams, in general, have increased tremendously over the past few years, and so has the median amount lost to these scammers. Between October 2020 and May 2021, for instance, it reported that Americans had lost more than $80 Million worth of crypto to scammers. During this period, the average investor lost around $1900, which represents a 1000% increase in median loss per reported case in 2019.

How To Keep Your Litecoins (LTC) Safe

All is not lost, and there are plenty of measures that you can take to keep your Litecoin safe.

For starters, invest in a reliable hardware wallet, which stores the private keys for your LTC tokens offline. This goes a long way in getting your investment out of reach of online hackers.

Secondly, you need to use strong and unique passwords for your crypto exchange and wallets, especially if you are an active trader. Such a move helps discourage and deter hackers.

Equally important, learn to whitelist the URLs for all your favourite crypto exchanges and digital wallets. Further, stop clicking on suspicious and unsolicited links, especially if they offer freebie crypto. Learn to spot fake websites and if suspicious of a website, use the WHOIS directory to view its registration/ownership details. Lastly, you will also want to invest in a proper antivirus for all your internet-enabled devices.

Don't miss: Pros and Cons of Investing in Litecoin, Will It Be a Millionaire Maker?

Litecoin (LTC) Security Vs Privacy

Even as you explore more ways to keep your digital assets safe, you will need to appreciate the fundamental differences between Litecoin security and privacy concepts.

Throughout this post, we have been discussing crypto security, which revolves around preventing illegal access and possible theft of your Litecoin private keys. In crypto security, you are looking at all the risks that threaten the safety of your Litecoins and identifying a sound solution for each. It also involves keeping abreast with the industry news and events to learn of the evolving ways that hackers and scammers use to steal from crypto investors and how you can avoid them.

Litecoin privacy, on the other hand, relates revolves around the handling of your personal data. If we were addressing Litecoin privacy here, we would have looked at the level of anonymity that the Litecoin network provides its users, vet entities with access to your personal information, how it is secured from unauthorized parties, and how it is shared.

As is the case with the Bitcoin blockchain, crypto experts will tell you that any of your personal data collected and stored within the Litecoin network isn’t anonymous. With access to the Litecoin ledger and basic cryptography skills, virtually anyone can easily identify parties to a particular transaction as well as the transaction amounts. Galen Moore, the director of data and Indexes CoinDesk, reminds you that “you’re really not anonymous (when interacting with the Litecoin network), more like pseudonymous”, thus the need to practice due diligence on the amount of personal information you share online.

Bottom Line? Is Litecoin (LTC) A Safe Investment?

Well, Litecoin has been rather successful, and this has not only helped it morph into a household name in the crypto industry but also post a net positive ROI exceeding 4100%. It has all the features of a good investment. But like all other digital currencies, a Litecoin investment is predisposed to multiple serious risks that you have limited or absolutely no control over, and this makes it an unsafe investment. The fact that the altcoin operates in one of the riskiest and nascent industries makes it even more unsafe as it compounds Litecoin’s investment risks.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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Why Is Litecoin So Cheap?