Cryptocurrency Litecoin Is it copying bitcoin Is it profitable

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Cryptocurrency Litecoin: Is it copying bitcoin? Is it profitable?

Litecoin is one of the alternative virtual bitcoin-based cryptocurrencies. Litecoin is the first to have used a different algorithm for mining called Scrypt. What was the reason for creating litecoin? Is it worth investing in litecoin or is litecoin nothing more than bitcoin’s clone?

You will learn more in this article, so carry on!

Creation of Litecoin

Litecoin was created by a Google employee, Charles Lee, supported by the members of the Bitcoin community on 7 October 2020. The founder’s goal was to come up with a progressive coin offering plenty of advantages to its users and a totally different mining algorithm than other major cryptocurrencies.

Litecoin is the peer-to-peer internet currency with a number of enhancements. The main feature of scrypt is its proof-of-work algorithm. Scrypt was developed by Colin Percival (of Tarsnap Inc.) in 2009 and unlike bitcoin its sequential memory-hard function requires more memory than an algorithm which is not memory-hard.

Mining of litecoin is possible with less powerful devices than BTC mining.

A very important feature, compared to bitcoin, are: faster transaction confirmation. The processing of a transaction takes 2.5 minutes, which is 4x faster than with bitcoin. Hence, each litecoin end user can access his or her money much sooner than a bitcoin user. Litecoin’s production is also 4x higher, capped at 84 mil. coins.

Charles Lee, the founder of litecoin

In 2020, plenty of miners abandoned litecoin in the wake of Charles Lee’s claim of litecoin not being in need of any development (December 2020). In the following weeks, litecoin fell by more than by 60% to its historical minimum of 1.30 USD. Over the next three years, the price experienced repeated ups and downs. In late 2020, it seemed that litecoin would forever remain a minor currency with trading price ranging between 3 and 4 dollars. In January 2020, litecoin was resurrected.

Charles Lee published on Twitter his visions of SegWit and Lightning Networks for bitcoin and litecoin. He showed that SegWit was not just a tool to increase transaction capacity but primarily a means to fix what was known as transaction malleability.

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Litecoin’s ambition with SegWit was to come back into the frontline cryptocurencies. In early May 2020, SegWit was activated in the litecoin network and thanks to this achievement, the value grew to 38 dollars. Mining of litecoins can be done economically using graphical cards.

Litecoin is a handy currency for trading. You can make profit on both growth or fall of its exchange rate. With the help of leverage, you can make money also on minor price changes.

How to make money with litecoin

  1. Similarly to other cryptocurrencies, the easiest way to make money on litecoin is holding. This means that you buy one, two or more litecoins and do nothing. You can leave them on your account at an exchange (e.g. CoinBase) or send them to another wallet or trezor.

Ideally, the price of litecoin will grow at the same pace as so far. Therefore it is likely that the price at some point in the future might be higher than today. Given the current value of bitcoin (100x bigger than the one of litecoin), I believe that you will not do wrong if you buy 1, 2, 5 or 10 litecoins.

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Brief recap: Litecoin vs. Bitcoin

Litecoin was created using a very similar core to bitcoin. Nevertheless, the two currencies differ in numerous features. One of the major ones is the total amount of coins each cryptocurrency enables to mine. With bitcoin you must not exceed the level of 21 million, while Litecoin enables a quadruple i.e. 84 million coins. Bitcoin is facing a problem with quantity of transactions in its network seeing more and more people migrate to other currencies, one of which is Litecoin.

Litecoin, the same as Bitecoin, is a transaction system. Litecoin allows making transactions via a wallet. Bitcoin uses SHA-256 as an algorithm, unlike litecoin that uses the abovementioned Scrypt. Bitecoin was founded in 2009. As mentioned above, transactions with litecoin are much faster than those with bitcoin. Bitcoin generates blocks in 10-minute intervals while litecoin does the job in 2.5 minute. Litecoin’s improved algorithm allows producing coins on more powerful PCs much faster than Bitcoin.

Litecoin motivates miners to join with its loyalty program. The motivation is based on a quick reaction of the first miner validating a block who receives a reward worth 50 litecoins. Transaction charges paid for litecoin are, compared with bitcoin, a mere fraction. Litecoin is currently used for more transactions than bitcoin. If you want to buy a cup of coffee you can do so with litcoins in all major cities as well as various other purchases including in smaller towns.

Author

More about the author Step

I’ve wanted to build a business of some kind and earn money since I was in middle school. I wasn’t very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author

How to Start a Bitcoin ATM Business: Is It Profitable?

Interest per week

Interest per year

The number of Bitcoin ATMs is growing exponentially worldwide — from the US and Europe to inflation-stricken Latin American and African countries where many people remain unbanked. By 2023, the global ATM market is expected to reach $145 mln.

Obviously, many are trying to capitalize on this and start a Bitcoin ATM business. In this article, we are going to present you with a comprehensive guide on how to become a part of this competitive business niche in a snap. Most likely, you already know about the modus operandi of a Bitcoin ATM, therefore we will only focus on installing your own Bitcoin machine while shedding light on other tangible issues. After reading this article, you will find out how to start your own Bitcoin ATM business.

Regulatory compliance

Before we begin, it is vital to mention the importance of regulatory compliance. In most countries, cryptocurrencies remain in a legal grey zone, and operating without a legal permission puts your business in jeopardy. Case in point: Unocoin, an Indian crypto-oriented company whose cofounders were swiftly arrested by local authorities after installing the country’s first BTC machine. If you live in the US, pay attention all the necessary regulations (given that 60 percent of all ATMs in the world are operating specifically in the US, we decided to specifically focus on this market).

The first universal requirement is to register as a money services business (MSB) with FinCEN. The process of registration is a no-brainer, but it’s an absolute must for all Bitcoin ATM providers since operating an ATM without being a statutory MSB is a federal crime that leads to imprisonment or huge fines.

On top of that, those who own a Bitcoin ATM are obliged to comply with AML regulations by cooperating with a compliance officer and educating staff on possible ‘red flags’ that could indicate money laundering. There is also a place for KYC regulations — operators have to verify the identity of people who conduct the transaction, check whether a suspicious person is on a terrorist list, etc.

Complying with all these regulations may seem like a tedious and time-consuming task, but it is not that difficult: it won’t take more than an hour to cope with everything. Hence, young entrepreneurs aren’t supposed to be shooed away by such a long list of requirements.

NB! Apart from federal laws, US residents also have to comply with local laws that are determined by the state.

Finding a crypto-friendly bank

Dealing with banks, which represent the traditional sector of the financial industry, is yet another hindrance related to owning your own ATM. The truth is, not many banking institutions are willing to deal with crypto-oriented businesses, going as far as freezing the accounts of their owners. Case in point: Scott Snaith, CEO of 50cycles, whose private and business accounts were frozen after performing a sizeable transaction on a cryptocurrency exchange. This is hardly surprising since cryptocurrencies are supposed to replace centralized traditional banking institutions.

On the flip side, cooperating with cryptocurrency ATM operators is indeed deemed risky since it’s challenging to confirm the identity of the person who buys BTC with cash. That is why Bitcoin teller machines have a rather shady reputation since they are believed to be popular with unbanked people who have plenty of cash on their hands (thus, they are willing to shell out a sky-high fee).

Choosing your Bitcoin ATM

Now that we’ve covered legal issues, let’s focus on the stage where you have to purchase a Bitcoin ATM.

Remember that there are two kinds of Bitcoin ATMs: one-way machines and two-way machines. The former only allows customers to purchase Bitcoin. Statistically speaking, the lion’s share of such machines is one way (61.5 percent).

This is completely justified — only 10 percent of all Bitcoin ATM operations is attributed to selling crypto. However, the number of sell operations may grow exponentially during harsh market conditions, and it’s up to the operator to decide whether it’s reasonable to pay two times more to maximize the profit in the yo-yo market.

As Bitcoin was becoming more popular, Bitcoin ATM machines started popping around the globe just like Bitcoin ATM franchises (the obtaining of rights from a certain provider). Here are the top 5 cryptocurrency ATM manufacturers as of November.

Is Mining Cryptocurrency Profitable & Can You Make Money

I am asked these questions often so I decided to make a video about it, along with some other questions and answers.

I see the question often enough these days “Is mining cryptocurrency profitable”? And the answer fully depends on a lot of variables.

The value of cryptocurrency goes up and down with bitcoin and the stock market. Public opinion and the news affects the prices a lot too these days.

But the general answer is “yes”. You can make money mining cryptocurrency. Depending on your graphics card and the cost of electricity in your area, you can make some money mining cryptocurrency.

Back in winter of 2020-18 my entry level GTX1050 graphics cards were bringing in $30 – 45 a month – each. Your return on investment was about three – 6 months back then. These days I am lucky to see $7.50 each in a month, before electric costs.

I look at mining as an investment but with reduced risk. I buy computer parts which I can always sell or use if crypto tanks. So my risk is reduced overall as compared to direct investments.

I mine super cheap coins worth a fraction of a penny. I look for the most profitable coin where I can gain the most coins per day and have the least amount of people mining them.

Your earnings are affected by the market overall, the daily value of the coin you mine, the amount of coins you can mine and the number of people mining.

But if you look at it as a long term investment then it is very much worth it. If cryptocurrency goes mainstream one day then it all pays off in the end.

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