Litecoin has been making some big gains in the last week holding steady at around 16 cents (USD) per Litecoin. This surge in price and rumors of some big upcoming announcements for Litecoin mean that Bitcoin’s little brother is finally growing up. If you’re not yet familiar with Litecoin now might be the time to get acquainted. Here’s how to get started using Litecoin.
An Overview Of Litecoin
Litecoin (abbreviated LTC) is a digital peer to peer currency used over the internet. It is based off of concepts similar to the quickly growing Bitcoin protocol with a few differences. Like Bitcoin it is decentralized meaning that it isn’t reliant on a central entity such as a central bank. Rather Litecoin is dependent on the network of users that employ it. It has a finite supply of coins that are being released over time through a process referred to as mining. There will only ever be 84 million Litecoins produced as opposed to Bitcoin’s 21 million limit. Litecoin also has a faster confirmation time than Bitcoin. With Litecoin transaction confirmations arrive on average every 2.5 minutes as opposed to every 10 minutes with Bitcoin.
Like Bitcoin it uses encryption to process transactions but instead of the SHA-256 algorithm it uses a scrypt based algorithm. The scrypt algorithm is more reliant on memory making CPU mining more effective and was part of the initial appeal of Litecoin. Because of the different algorithm much of the specialized hardware that has been developed for Bitcoin will not work with Litecoin. For this reason many people expect GPU miners to eventually switch to Litecoin.
Setting Up The Litecoin Client
In order to use Litecoin you’ll first need to download and set up the Litecoin client. The Litecoin client is available for Windows, Linux, and Mac OS X from this github page or through the litecoin site. Opening the Litecoin client is as simple as finding it in your applications with mac or program files with windows and starting the program. It may take a little while for the Litecoin client to download the Litecoin blockchain (A history of past and recent Litecoin transactions). Once this is complete you’ll be ready to go. It is a good idea to keep the Litecoin client running as it helps support the network and keeps your blockchain up to date.
Using the client is pretty self-explanatory once it is up and running. Send Coins allows you to send Litecoins to another user by entering in their address and the amount to send. Receive coins allows you to manage your addresses, copy them and lets other people send you coins. Transactions is a ledger of all the Litecoins you’ve sent and received to date. The address book allows you to manage a list of addresses and label them so you don’t have to reacquire an address every time you need to send someone coins. Unlike many other wallets Litecoin still has a Mining application built in (More on this in the Get Litecoins section).
Securing Your Wallet
I highly recommend that you take measures to secure your wallet. Litecoin has a built in encryption feature that you can set up by going to settings -> Encrypt Wallet.
Next you’ll be prompted to enter a pass phrase. Make sure that the pass phrase is either something you can easily recall or make sure to store the pass phrase somewhere safe. Your coins will essentially become worthless if you lose this.
The Litecoin forum over at Litecoin.net is probably the most active of the Litecoin communities. If you’re looking to get more technical info on Litecoin mining or the most recent news on Litecoin this is the place to go. Alternatively you can subscribe to the Litecoin subreddit though it’s not nearly as active as Bitcoin’s. The Alternative Crypto-Currencies forum on BitcoinTalk has some pretty good information on what is going on in the Litecoin world as well.
Previously I’ve awarded Litecoins to new users as long as they posted their address in the comments. However, with the rising cost and difficulty, as well as my own decreasing supply (339 comments as of this writing), I’m stopping this for now. You can still post an address in the comments if you like and perhaps some generous Litecoiner will come along pass a few litecents on.
As for other ways to get your first Litecoins, the cryptocurrency exchange Btc-e.com offers Litecoin for trade with a number of other currencies. It is also rumored that Litecoin will be traded on MtGox shortly. If you’re interested in the mining side of litecoin you can check out my tutorial on mining Litecoin with your GPU.
NOTE: I no longer am offering donations to cryptocurrency newcomers as the coins have become too pricey and my supply is dwindling. Feel free to post an address in the comments still as some generous individual(s) may still wish to donate.
Post a comment with your feedback about this article or about Litecoin along with your LTC address and I’ll go ahead and send you one 0.5 0.25 0.10 Litecoins to help you get started (While supplies last supply is dwindling). Unlike most of the other crypto-currencies, Litecoin still has a mining application built into it that uses your CPU to mine Litecoins.
The most notable Litecoin exchange is BTC-e which allows for easy trade between Litecoin and US Dollars as well as Litecoin and Bitcoin. One of my favorite crypto-coin exchanges is Vircurex which allows for exchange between most of the available crypto-currencies.
That’s all I have for now on Litecoin. If you’re interested in mining Litecoin be sure to check out our Absolute Beginner’s Guide To Litecoin Mining. As always if you have crypto-currency related tips or news you can email me at cryptojunky at zoho dot com.