What is Litecoin?
Litecoin (LTC) is a cryptocurrency that was designed to provide fast, secure and low-cost payments by leveraging the unique properties of blockchain technology.
The cryptocurrency was created based on the Bitcoin (BTC) protocol, but it differs in terms of the hashing algorithm used, hard cap, block transaction times and a few other factors. Litecoin has a block time of just 2.5 minutes and extremely low transaction fees, making it suitable for micro-transactions and point-of-sale payments.
Litecoin was released via an open-source client on GitHub on Oct. 7, 2011, and the Litecoin Network went live five days later on Oct. 13, 2011. Since then, it has exploded in both usage and acceptance among merchants and has counted among the top ten cryptocurrencies by market capitalization for most of its existence.
The cryptocurrency was created by Charlie Lee, a former Google employee, who intended Litecoin to be a "lite version of Bitcoin," in that it features many of the same properties as Bitcoin—albeit lighter in weight.
Litecoin is a non-profit blockchain project that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a "smart economy" with a distributed network. On the Litecoin blockchain, users are able to register, trade, and circulate multiple types of assets. Proving the connection between digital and physical assets is possible through digital identity. Assets registered through a validated digital identity are protected by law.
1. Create accounts
In order to buy Litecoin in Canada we will first need to create an account on a local exchange to buy Ethereum or Bitcoin. Then you will need to create an account on a global exchange to trade the Ethereum or Bitcoin for Litecoin.
Create Local Exchange Account
If you want to buy Litecoin right now (with a verification delay), and if you want to buy only a small amount ($375 CAD or less) use Coinbase.
For a more comprehensive guide and comparison of the various exchanges, see the Exchanges Guide. We offer a pretty good pro and con list of each exchange.
Create Global Exchange Account
Next, you will need to create an account on a global exchange. This will allow you to trade the Bitcoin or Ethereum for Litecoin. Unfortunately, it's not possible yet to do it all on the same exchange. Which is why you need to use multiple exchanges.
We recommend using Binance
For a more comprehensive guide and comparison of the various exchanges, see the Exchanges Guide.
Verify and Fund
In order to fund your local exchange accounts you will need to verify your identity. This often involves sending in copies of your drivers license, a utility bill, and in many cases a selfie of you holding your ID. This is normal ask for verification on exchanges.
As for verification on global exchanges, the verification is usually faster and less intense. For example on Binance you do not need to verify if you are withdrawing 2 BTC or less.
2. Buy your cryptocurrencies
Now that you have both a local exchange account and a global exchange account it's time to make your purchases. You need to buy XRP or ETH, transfer it to the Global exchange, and then place an order to trade it for Litecoin.
Buy a Cryptocurrency
If you are not using Binance, it is a important to verify that your global exchange will trade the cryptocurrency you are buying in this step, for Litecoin.
Login to your local exchange and buy your desired amount of Litecoin in XRP or ETH. We currently recommend buying with XRP as it provides a faster and cheaper transaction than Bitcoin/Ethereum, as long as your exchange supports it. Ethereum is ok if you are using Shakepay as they will cover the network fees to transfer to Binance or another exchange.
Transfer Cryptocurrency to a Global Exchange
This involves getting the funding wallet address from Binance account and withdrawing to it from your Shakepay account.
You will need to wait for the transaction to complete. Once you see the funds appear in your global exchange account you are ready to proceed to the next step.
Trade for Litecoin
The next step is to actually buy Litecoin. On your global exchange place an order to trade the crypto currency for Litecoin. You will most likely need to buy USDT or BTC so you have the correct currency for the trading pair offered.
The fastest way is to place a market order which buys Litecoin for the current market price on the exchange. However, consider using a limit order to get a better price, but remember if the market price does not hit your limit price your order will not be filled.
3. Storing your Litecoin
If you just bought some Litecoin you are currently storing it on the exchange you bought it on. This is OK if the value is small. However, if you own a significant amount it is best practice to transfer your cryptocurrencies to a wallet that is not an exchange.
If you are just getting started you will probably want to use a software wallet. They are typically free and are considered more secure than leaving Litecoin on a exchange.
Feel free to do a google search to research what wallets are available and know what the options are.
Once you have decided on a wallet, follow the instructions to get it setup then withdraw your Litecoin from your exchange account. It is common for a small fee to be associted with the withdrawal.
The safest way to store Litecoin, or any cryptocurrency, is with a hardware wallet that is not connected to the internet. This is to prevent it being stolen or hacked from a exchange or a wallet connected to the internet.
Consider looking at the Ledger line of hardware wallets. They have been in the industry a number of years and offer one of the widest selections of devices.
Leaving it on an Exchange
This is generally not recommended. However, you might want to do this if you are actively trading Litecoin. Be aware you are taking an extra risk. Exchanges have been known to get hacked or disappear, search QuadrigaCX scandal.
The main advantage of doing this is instant access to your Litecoin, and saving the fees associated with transactions and withdrawing.
Always consider the reputation and size of the exchange if you are storing a cryptocurrency asset on it.
Generally speaking, I do not keep a balance on any of the local exchanges. If I am going to hold a balance of a cryptocurrency coin/asset on an exchange it will be Binance as they have the most robust platform. However, use this information at your own risk. The safest place for your crypto assets is a hardware wallet like Ledger.
Regardless of the exchange, if you are holding assets on the exchange, make sure you enable two factor authentication and use a separete secure password on the account.
- Create an account on a local exchange.
- Create an account on a global exchange.
- First buy ETH or BTC on the local exchange.
- Next trade that ETH or BTC for Litecoin on the global exchange.
- Store your Litecoin, consider getting a software or hardware wallet.