What is Litecoin in a Nutshell?
Litecoin was created in 2011 by Charlie Lee, a former employee of Google, as a peer to peer currency for cheaper and faster transactions than Bitcoin. Litecoin is often described as silver to Bitcoin’s gold. It has taken the general idea behind Bitcoin, but has a few major advancements:
- The total number of Litecoins available is 84 million, while the total number of Bitcoins available to be mined is said to be limited to 21 million.
- It uses scrypt as its Proof-of-Work (PoW) algorithm, which was aimed to make it impervious to ASIC mining. (However, several companies said they are planning to launch scrypt ASIC miners in the near future).
- Litecoin was designed to process blocks faster than Bitcoin (the block time, is 2.5 minutes versus 10 minutes for Bitcoin).
How to Buy Litecoin? (Credit Card, PayPal Account, Bank Transfer)
Litecoin, Bitcoin’s younger brother, has recently taken off to new heights and it is the fifth largest cryptocurrency after Bitcoin by market cap, with Ripple, BCH and ETH sitting in ahead of it. Litecoin reached its first all time high on December 2013 of $38. However, it then plummeted and kept a steady exchange rate of around $3 for the last 3.5 years. But within the last few months, the price of Litecoin has started booming again. Many people say this is due to the fact the currency has adopted the Segwit and Lightning Network soft fork implementations.
At the time of writing this article, Litecoin is trading over $356 on most major exchanges. In this post, I will show you how you can purchase Litecoin using your PayPal account, a credit card or wire transfers. It’s important to note that using the first two methods to buy Litecoins will probably cost more than using the wire transfer. This is because of the fact that if you purchase Litecoin with a credit card or your PayPal account, the seller takes the risk of your requesting a chargeback on your transaction.
Step 1 – Get a Litecoin wallet
The number one step in using Litecoin is knowing how and where to store it. For that you need a wallet. Some of the most popular wallets available in the market today for Litecoin are Jaxx, Exodus, and Coinbase. You can also use offline hardware wallets, such as TREZOR or Ledger, if you are worried about security.
Step 2 – Choose a Litecoin exchange
One of the main problems it’s currently difficult to purchase Litecoins is because most exchanges trade it only for Bitcoins, and not for EUR or USD. So what you have to do is purchase Bitcoins first and then exchange them to Litecoins on exchanges like ShapeShift.io, BTC-e, or Poloniex.
However, there are some exchanges where you can purchase Litecoins directly.
Buy Litecoin on Coinbase
Started in 2012, Coinbase is one of the largest Bitcoin exchange in the world, and they have recently started supporting Litecoin along with Ethereum and Bitcoin. Coinbase allows you to purchase up to $500 worth of Litecoins using your credit card, and higher limits can be achieved once you verify your identity.
Coinbase accepts buyers from 33 countries around the world, so you need to check if it currently supports your country or not.
The fees on the exchange are relatively low when compared to other exchanges (mainly for ACH transfers inside the US).
Buy Litecoin on Bitstamp
Started in 2011, Bistamp is one of the oldest Bitcoin exchange. Bitstamp allows you to purchase Litecoin through a wire transfer of EUR or USD, and you can also exchange your Bitcoins to Litecoins as well.
Bitstamp supports all the major countries around the world. However, the exchange rates are a bit high – charge 0.25% for transaction under $20,000, 0.24% for transaction below $100,000 and similarly the fee drops to 0.10% for $20 million.
Moreover, Verification takes about 2-3 hours and you just need to submit your driver’s license, passport, or government ID.
Buy Litecoin on Bitpanda
Started in 2014, Bitpanda (formerly known as Coinimal) is another very quick way to buy Litecoin using your credit card, Skrill account, SEPA (Single EuroPayments Area) transfer or SOFORT transfer.
Bitpanda is a reputed Australian company that is well-known mostly in the EU. You can sell your coins from anywhere around the world, but you can purchase them via Bitpanda only from Europe.
It’s important to note that buying on Bitpanda requires verification. Also, buying limits are relatively low (600 Euros).
Buy Litecoin on eToro
Platforms like eToro don’t give you actual access to your coins. Also, you can’t send coins from eToro to other people. The only thing that can be done with the platform is to purchase and sell Litecoin for fiat currency (EUR, USD, etc.), which means that eToro is good if you only want to speculate on the price.
Step 3 – Purchase Litecoins and Move Them to Your Wallet
Once you decide on an exchange, the next step is to open an account and finally purchase Litecoins. Remember to move Litecoins from the exchange to your personal wallet. It is highly advisable not to leave your coins in an exchange because you risk losing them if the exchange shuts down or gets hacked.
How to Buy Litecoins with PayPal Account?
If you’re looking to purchase Litecoins with your PayPal account, you should know that there is no direct option. You’ll need to buy Bitcoin with PayPal through VirWox (the Virtual World of Exchange) and then exchange them to Litecoins on exchanges like Bittrex, Poloniex, etc.
VirWox is delaying new user transactions for up to 48 hours, which means that it can take you 2 days to complete this process. However, it is still faster than using a wire transfer, yet again, this might not be immediate as well (although in some cases it is relatively faster).
Before we begin, there are a few things that you should keep in mind. The first is that it’s really difficult to purchase Bitcoin with PayPal accounts due to the risk it poses to the seller. Secondly, since Bitcoin can’t be bought with PayPal directly, we will purchase it using a workaround. This workaround causes the transaction fees to be higher, but is still worthy for the Bitcoin’s volatility.
One more thing worth noting is that the minimum amount to buy in this process is 0.002BTC, so if you want to buy less than that, you shouldn’t use this process.
Register with VirWox
The first thing you’ll need to do is to go to VirWox and open a new account. Look for the “Not registered yet” link as shown in the image below:
Now, enter all your personal information. If it asks you about your avatar name just leave your avatar name as “no avatar” and click “Register.” Once this step is done, you’ll receive a confirmation email with your password.
Important Note: Don’t forget to change your password after creating the account.
In the email from VirWox you will get a password, with which you can log into VirWox. You will be transferring money through this account, so I strongly recommend you change the password once inside. You can change it under “change settings” as shown in the image below:
Now, fund your account through your PayPal account.
Now, click on “Deposit” and choose the “PayPal express” method. The next step is to enter the amount of EUR/USD you want to deposit and click the PayPal checkout button. There is a maximum limit of $99 for the first time, however, this limit will be removed as you make further transactions and you will be able to deposit more and more.
Once you have money on your account, it’s time to purchase some SLL (Second Life Lindens) and exchange them into Bitcoins. Start off by purchasing SLL in the SLL/USD exchange as shown in the image below:
After you see the SLL in the top left corner of your account, you will now need to exchange them to Bitcoins. Go to the SLL/BTC exchange and exchange you Lindens to Bitcoins as shown in the image below:
Withdraw Your Bitcoins
Now comes the final step where you need to go back to VirWox and transfer your funds into this Bitcoin address:
Just click on the ‘Withdraw’ on the left side of the dashboard, enter you BTC wallet address and you will soon receive BTC in your wallet. However, for every withdrawal you will be charged a transaction fee of 0.004BTC.
Once you get Bitcoin on your wallet address, you can use Changelly or Shapeshift to exchange your Bitcoins to Litecoins.
Buy Litecoins with Bitcoin
Changelly was started in 2016 and within a year, they increased their userbase to more than 1M.
They charge a minimal fee of 0.25% for every conversion. This fee is quite low when compared to other exchanges.
You need to create an account and get it verified with your photo ID in order to buy Litecoin on Changelly.
Once your account is verified, you can instantly convert your Bitcoin to Litecoin, and the whole process will not take more than 2-3 hours to complete. One more great thing about Changelly is that they provide a dashboard where you can keep track of all your transactions.
Headquartered in Switzerland, Shapeshift is another instant cryptocurrency exchange that works similar to Changelly.
It started in 2013 and was the first instant crypto exchange.
Shapeshift does not require any verification or account creation. This means that it is much faster than Changelly. But on the other hand, past transactions cannot be checked in Shapeshift.
Shapeshift is perfect for those who want to make an anonymous transaction.
So these were some of the best ways to buy Litecoin (LTC) using a credit card, a PayPal account, and a bank transfer.