Litecoin (LTC)

Litecoin: what it is and how people use it

Litecoin (LTC) has been around since 2011, created by Charlie Lee, who once worked at Google. He started with Bitcoin’s public code, changed a handful of details so transactions would be both cheaper and quicker, and described Litecoin as 'silver' compared to Bitcoin’s 'gold', the phrase caught on. Right now, you’ll find Litecoin trading at 55.04 USD, and if you scroll up, that table lists where you can purchase it at the lowest total cost available.

People mostly use Litecoin to move money affordably and with some speed. Often, traders send it between exchanges because it usually arrives within minutes and you pay very little to move it. A number of online merchants and payment processors take Litecoin too, for the same reasons. Since it’s been part of the crypto scene for a long time, most of the major exchanges and wallets support it, making it straightforward to acquire and transfer.

If you’re familiar with Bitcoin, you’ll recognize a similar approach. Litecoin doesn’t aim to be a platform for applications like Ethereum. Instead, it remains focused on its main job: serving as a fast, uncomplicated coin for making payments or storing value, no matter where you are.

The mechanics behind Litecoin

Litecoin runs on a proof of work system, not unlike Bitcoin. Here, miners compete for the right to add blocks to the blockchain, rewarded each time with newly minted coins and, of course, any transaction fees in the same block. The distinction is in the cryptographic algorithm it uses: Scrypt instead of Bitcoin’s SHA-256. That tweak means new Litecoin blocks are found about every two and a half minutes, compared to Bitcoin’s ten. If you’d like the technical rundown, have a look at our guide on proof of work and proof of stake.

The supply is limited at 84 million LTC, four times what Bitcoin allows. New coins come in as mining rewards, but that reward is halved after every 840,000 blocks, which happens roughly every four years. You’ll find the mechanism detailed in our article on the Bitcoin halving. Each halving pushes fewer new coins to the market.

There are other features that make Litecoin stand out. One is that miners can simultaneously mine Dogecoin through a process called merged mining. That joint effort increases the security of both networks. Since 2022 Litecoin also has an option, MWEB, that allows users to hide the transaction amount. Most people stick with standard transfers, which stay open on the blockchain by default.

What drives the price of Litecoin

Litecoin doesn’t usually carve out its own path price-wise. Instead, it tends to track along with Bitcoin and the rest of the crypto market, sometimes moving even more sharply up or down. If you want to put Litecoin’s moves into perspective, always review Bitcoin too.

In the last year, LTC went -44.22%, hitting a low of 40.87 USD and climbing as high as 110.18 USD. The 30 day chart reads -17.61%, while the 7 day moves were -6.37%. Stretch that field out to five years and the result is -41.02%. The distance between the yearly low and high is a reminder that LTC is anything but stable over a typical twelve-month stretch.

There are some Litecoin-specific factors as well. The halving event, for example, slices new supply every few years and can have a short-term impact on miner rewards. Events like new exchange listings or removals can temporarily push demand up or down. Upgrades to the network itself don’t seem to move the price significantly, since major changes are rare. Nothing here offers certainty, though, and we don’t publish any forecasts for future prices.

How to buy Litecoin and what it will really cost you

Here’s how the process usually unfolds. First, you set up an account at an exchange and take care of their identity checks. After that, you move your own funds in, using either a bank transfer or a card. Next, you place an order to buy some LTC. Finally, you decide whether to keep your coins on the exchange or move them elsewhere. Market orders fill instantly at the next available price. A limit order sits there until the price you selected comes along, and bear in mind that sometimes it won’t.

Don’t be misled by the sticker price. You’ll pay a trading fee, but you’ll also pay for the spread, the gap between the buy and sell quotes. Some platforms appear to charge no fees, then collect their profit by widening the spread instead, so the total cost can be hard to spot at a glance. Card deposits bring extra charges for most people. If you move your coins off the platform, add in the withdrawal fee too. You’ll find more on how these charges work in our exchange fees and buy-sell spread guides.

If you’re comparing exchanges, Kraken, Coinbase, and Bitvavo are worth checking out. Kraken and Coinbase are active across a wide range of countries, and Bitvavo is designed for people using euros and based in Europe. Remember, a small purchase can face higher percentage costs than a larger one, fixed fees don’t scale. The table above sorts providers by what you actually end up paying. We describe our approach in detail in the How we compare.

Securing your Litecoin

Leaving your coins with an exchange means they’re in that exchange’s wallet, not one you control. For trading or small amounts you expect to sell or move soon, many users accept the convenience. But you also put your trust in the exchange’s safety measures and ability to remain solvent. There’s more on this compromise in our article covering custodial and non-custodial wallets.

If you use your own wallet, the private keys are truly in your hands. A hardware wallet stores them without ever going online, protecting you from viruses and hackers, and most of these devices support Litecoin. At setup, you’ll see a list of words, known as your seed phrase. Write those down on paper, hide them somewhere no one can stumble across, and never put them online or send them to anyone else. Whoever has that phrase can spend your coins.

Transferring LTC away from an exchange does take attention. Litecoin addresses typically begin with L, M, or ltc1, and if you use an address that belongs to another coin, the transfer will fail. Always try a small test transaction first, check it works, and only then send the rest. For a more detailed walkthrough, see our instructions on withdrawing to your own wallet. Funds sent to the wrong address are not coming back.

Risks and how tax applies

Litecoin can lose substantial value over short periods, and there are no guarantees about its recovery. Its long record and broad acceptance cannot shield it from sharp swings or competition from much newer coins in the market.

Scams are a pressing concern for anyone buying LTC. Beware of lookalike exchange sites, scammers pretending to be support agents, or anyone promising profits, these attacks often go for your seed phrase or push you into sending coins in haste. Always type the exchange URL yourself, or use a bookmark, and treat urgent transfer requests with skepticism.

Tax treatment of cryptocurrencies is very country-specific. In many jurisdictions, selling LTC for cash, swapping it for another crypto, or even using it for a purchase can trigger a taxable event. Some places also tax crypto that you simply hold. It’s important to log every transaction, along with dates and amounts, since tax offices may want to see those records. For tailored advice, always check your local tax rules or consult a local tax expert.