Pros and Cons of Investing in Litecoin, Will It Be a Millionaire Maker?
Pros and Cons of Investing in Litecoin, Is it Good to Invest in LTC?
Learn more about the pros and cons of investing in Litecoin pushing you ahead to know if it is a good idea to invest in Litecoin.
Litecoin might be the missing piece in your portfolio. Here’s why you might consider investing in LTC, the pros and cons, and what exactly to look for.
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What are the pros and cons of investing in Litecoin (LTC)? Can the advantages of investing in Litecoin outweigh its potential drawbacks? Will LTC become a millionaire-maker? Keep on reading to find out if Litecoin is a worthy investment.
What Is Litecoin?
Before we explore the pros and cons of investing in Litecoin, let’s try to understand the nature of Litecoin. So, what is Litecoin?
Litecoin is one of the most popular altcoins in terms of market cap and one of the most prominent forks of Bitcoin, often referred to as the silver to Bitcoin’s gold.
For those who are new to the cryptocurrency sector and blockchain technology, we should mention that hard forks refer to any fundamental changes to a network’s protocol.
Litecoin is also one of the oldest cryptocurrencies, launched just two years after Bitcoin by former Google employee Charlie Lee. To be more precise, Litecoin was created in 2011 to serve as a lighter version of Bitcoin.
In fact, “Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open-source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. Litecoin features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. With substantial industry support, trade volume and liquidity, Litecoin is a proven medium of commerce complementary to Bitcoin.”
Well, with a four times higher supply and four times faster processing times, Litecoin is no doubt an appealing alternative to Bitcoin and a golden opportunity for investors.
Note that LTC is the ticker symbol of Litecoin.
While Bitcoin is still the most prominent crypto in terms of adoption and market cap, Litecoin is a preferred choice for many savvy investors. In fact, with a market cap of $5,788,862,331, LTC has cemented its spot in the crypto market.
Believe it or not, according to data, there are more than 283 Litecoin addresses with over $1 million LTC in each, which shows that many big investors turn to LTC investing.
Keep on reading to learn more about the pros of investing in Litecoin!
Would you consider investing in Litecoin?
Pros of Investing in Litecoin
What are the benefits of investing in Litecoin?
With low block generation times, improved Graphic User Interface (GUI), and impressive trading potential, Litecoin is one of the top 10 cryptos (currently ranking 5th in terms of market cap) for a reason.
That’s right! There are many reasons to invest in Litecoin, so let’s explore the factors that give LTC a competitive edge in the cryptocurrency sector. So here's a quick look at the pros of investing in Litecoin.
✅ Litecoin is an open-source network:
One of the main advantages of investing in Litecoin is the fact that Litecoin is an open-source system, which means that changes to its protocol can be implemented easily. Note that changes are usually implemented in order to respond to the crypto market and its needs. Being an open-source system also gives flexibility to Litecoin to implement tech innovations, such as SegWit and the Lightning Network protocol to make transactions faster and more convenient.
✅ Litecoin is decentralised:
Just like other cryptocurrencies, Litecoin is a peer-to-peer network and a decentralised alternative to fiat money, which means that users don’t have to rely on third parties, central banks, or authorities. Nodes are spread across the globe and the network is open to people from all walks of life. As a result, intermediary fees are eliminated and the risk for manipulation of prices reduced.
✅ Litecoin is fast:
Perhaps one of the most important pros of investing in Litecoin is its speed. Compared to Bitcoin, Litecoin is four times faster. Litecoin processes transactions within 2.5 minutes, while with Bitcoin, it takes up to 10 minutes to process payments. Some claim that faster processing times also mean that the risk of potential attacks is lower - simply because hackers would have less time to attempt double-spending attacks.
✅ Litecoin is scalable:
Another major advantage of Litecoin is its scalability. Litecoin can process 56 transactions per second. In comparison, Bitcoin can handle 7 transactions per second, while currently, Ethereum can process 15 transactions per second.
✅ Low transactions fees:
Litecoin has relatively low transaction fees, especially when compared to other cryptocurrencies or traditional payment systems. This is a major factor that can make LTC adoption wider and smoother.
✅ Litecoin has been improving regularly since it was launched:
As stated above, Litecoin is a flexible network that has embraced numerous improvements, such as SegWit and the Lightning Network protocol to make transactions faster and easier. Interestingly, Litecoin’s creator Lee once said, “Think of it being two highways: Today, Bitcoin is packed full of cars and Litecoin is empty. Even with Bitcoin packed, the cars are not coming to use the Litecoin highway today because it’s not connected and it’s inconvenient (centralized exchanges and slow on-chain transfers) to go across. Lightning Network will build bridges over the highways. But a side benefit is that these brides will connect both highways together. Maybe the bridges on Bitcoin are enough such that cars will stay on the Bitcoin highway. My bet is that the convenience and the cheaper tolls on Litecoin highway will convince cars to cross over and use Litecoin. But we won’t know until both are built.”
✅ Litecoin has an upper limit of total coins:
Litecoin has an upper limit of 84 million coins, which is four times bigger than Bitcoin. This means that the risk of inflation is eliminated, while investors will have plenty to invest in.
✅ Straightforward process of mining:
Just like Bitcoin, Litecoin uses a proof-of-work algorithm; Litecoin’s algorithm is known as scrypt. Compared to Bitcoin, however, Litecoin’s mining algorithm makes mining more energy-efficient and accessible to miners, which is also a major pro in environmental terms.
✅ Litecoin has a trustworthy developer team:
Because Litecoin was created by a former Google employee, that brings a sense of reliability. And as stated above, Charlie Lee and his team are developing LTC on a regular basis, including wallet improvements, confidential transactions, and partnerships. To provide an example, Alba is one of the companies that are planning to use Litecoin for its smart contracts. As the company announced, “We went with Litecoin as the second asset class, after bitcoin, for our smart contract investing solution for 3 primary reasons: 1. Commitment to Bitcoin compatibility: core roadmap, p2sh support, lightning support, etc; 2. Slightly better scalability than bitcoin in short term (block size and block times); 3. Mining fees which are primarily a function of #2 although this is more of a short term benefit as mining fees would likely sky rocket if we’re successful anyway.”
✅ Litecoin is easy to trade:
We should note that it’s easy to trade LTC. Many exchanges support Litecoin, with eToro being one of the most reliable platforms that allow investors to buy LTC and trade CFDs of over 90 crypto pairs. All hardware wallets also support Litecoin and there are atomic swaps between LTC/BTC. On top of that, because of its lower price compared to other top coins - with almost zero transaction fees and lower volatility levels - LTC is an attractive option for beginners looking to invest in the cryptocurrency sector.
Cons of Investing in Litecoin
Despite its pros, investing in Litecoin has some drawbacks. Investors should be familiar with the cons of investing in Litecoin in order to make an informed decision and decide for themselves if it is a good idea to invest in LTC.
So here's what you should know about the risks of investing in Litecoin.
❌ Litecoin has some branding issues:
Being a fork of Bitcoin, many people think that Litecoin is the same as Bitcoin, which is one of the major cons of investing in LTC. On top of that, though Litecoin revolutionised the crypto sector by improving Bitcoin, its uniqueness is kind of declining. To provide an example, Bitcoin has also embraced the SegWit protocol, chipping away at Litecoin’s advancements and prestige.
❌ Litecoin has lost its credibility over time:
Although Litecoin has a trustworthy developer team, LTC has lost some of its credibility. To be more precise, Charlie Lee sold his holdings near the all-time high of Litecoin in 2017, which made people question his faith in the coin. Furthermore, the withdrawal of the defunct Litepay service also caused controversial reactions among crypto enthusiasts. Here we should note that although the initial announcement of the Litepay service caused a surge in the price of LTC, the LTC team announced: “We are greatly disheartened that this saga has ended this way and we apologize for not doing enough due diligence that could have uncovered some of these issues earlier. We are currently working hard to tighten our due diligence practices and ensure that this does not happen again.”
❌ Litecoin is one of the most popular coins on the Dark Web:
A study published in 2018 announced that Litecoin is the second-most used on the Dark Web, with 30% of underground vendors accepting Litecoin. This can be a major drawback for big investors and ordinary users, especially since the Silk Road muddied the image of cryptocurrency.
Is Litecoin a Good Investment?
Before you invest in LTC, do not forget that it all comes down to the risk-reward factor. So, knowing the pros and cons of investing in Litecoin, it’s time to answer another question “Do potential rewards outweigh risks?”
Litecoin certainly has some risk factors; Charlie Lee sold his holdings in 2017, many people still associate LTC with BTC, and Litecoin is becoming more obsolete in terms of technology when compared to Ethereum and other blockchain projects.
At the same time, Litecoin is one of the oldest cryptocurrencies that has proven time and time again that it is one of the most desired assets among crypto investors - an asset that is ranking 5th in terms of market cap.
Plus, the current price of LTC acts as a low barrier of entry for crypto newcomers and also as a great way to diversify one’s portfolio, which may facilitate its adoption worldwide.
So, if you are willing to invest the time and energy and do your own research, Litecoin investing could really work for you too.
Just remember an important trading rule: one should never invest more than they can afford to lose. Always invest in risk management and listen to the big fish who suggest avoiding risking more than 1% of your account on a single trade.
Put simply, Litecoin is low-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding LTC to your portfolio.
Will Litecoin Be a Millionaire Maker?
Yes, Litecoin can be a millionaire maker. In a sense, Litecoin is already a millionaire-maker - LTC has a market cap of $5,788,862,331 as of December 2nd, 2020.
The value of LTC - trading at $87.71 - is likely to increase further, as usually, crypto scarcity tends to promote growth in prices. Let’s not forget that Litecoin has a limited supply of 84 coins.
Given its advantages over other cryptocurrencies, experts believe that Litecoin is here to stay. According to DigitalCoinPrice, the price of Litecoin could continue to enjoy a bullish trend throughout 2021 and 2022, with prices staying above $80.
Of course, price predictions remain speculative, depending on different factors, such as demand and supply principles, technology advancements in the crypto space, and market sentiment. Please remember that Litecoin LTC and any other crypto include some risk!
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- Litecoin is one of the most popular forks of Bitcoin that was created in 2011 - just two years after the launch of BTC.
- Litecoin has numerous pros over Bitcoin and other cryptocurrencies, including better scalability, fast processing times, a novel mining algorithm, and low transaction fees.
- Investing in LTC, however, comes with several cons, such as branding issues and high use on the Dark Web.
- Many experts believe that Litecoin - “the silver to Bitcoin’s gold” - will have a bright future and may hit a staggering price of $10,000 in the next few years.
If you decide to invest in LTC, do not forget that crypto investing can be risky, so analyse the risk-reward profile of Litecoin and do your research before you get started.
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Disclaimer: Cryptocurrencies are highly volatile.