How to Buy Litecoin in Canada
Litecoin is one of the first altcoins to have been created. In this article written by Haithem Kefi, we explain everything you need to know about Litecoin!
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What is Litecoin?
Litecoin (LTC) is a cryptocurrency created by a former Google engineer named Charlie Lee. It is one of the first altcoins, a term referring to cryptocurrencies other than the market leader Bitcoin, and sometimes other than Ethereum.
Litecoin was launched in 2011 as a peer-to-peer internet currency that enables instant payments worldwide. It is an open-source global payment network not controlled by a central authority (that is, it is decentralized). Charlie Lee referred to Litecoin as a “lite version of Bitcoin” and “a coin that is the silver to Bitcoin’s gold.” In fact, Litecoin shares many similarities with Bitcoin and is based on the same source code. To this day, it is still one of the largest cryptocurrencies by market capitalization.
The goal of launching Litecoin was to improve Bitcoin. It was designed to be used for cheaper transactions and to be more efficient for everyday use. Having a much higher coin limit market cap (84 million LTC vs 21 million BTC) and a far quicker mining process than Bitcoin, Litecoin transactions were significantly faster and cheaper while typically smaller. The faster transactions are meant to make Litecoin more attractive to merchants who are frustrated by Bitcoin’s long settlement time (about an hour). Litecoin is a viable option to settle payments faster at a speed equivalent to other digital payment methods.
What is the difference between Litecoin and Bitcoin?
Bitcoin and Litecoin are both blockchain-based peer-to-peer (P2P) cryptocurrencies originating from the same code. Charlie Lee, the creator of Litecoin, referred to it as a “lite version of Bitcoin” and “a coin that is the silver to Bitcoin’s gold.” Moreover, he argued that Litecoin was a complement to Bitcoin rather than a competitor. It was designed primarily to fulfill Bitcoin’s original purpose as a payment tool by addressing some of its weaknesses. Some of the subtle differences between the two cryptocurrencies include:
Litecoin uses a more sophisticated technology to mine than Bitcoin. In fact, blocks in its blockchain are generated up to four times faster. Therefore, financial transactions are processed much more rapidly at a greater number for the same time frame.
However, the speed in processing transactions can jeopardize the security of the network due to fewer and shorter verifications. It takes about 2.5 minutes for Litecoin transactions to receive their first confirmation as opposed to approximately 10 minutes for Bitcoin transactions. Yet, this remains convenient for small merchants who do not want or need these extra layers of security for their financial transactions.
Another area in which Bitcoin and Litecoin differ significantly is their market capitalization, that is the total dollar market value of all their coins in circulation. The ability of Bitcoin to be mined by large farms and mining pools has made it popular. In addition, Bitcoin’s high demand leads to a remarkably high cryptocurrency-to-dollar exchange rate. On the other hand, Litecoin has a much smaller market capacity, which is explained by Bitcoin’s greater demand and smaller supply. Nevertheless, Litecoin is still to this day one of the most traded cryptocurrencies.
Another of the main differences between Litecoin and Bitcoin is the total number of coins that can be produced. Both cryptocurrencies have a finite number of coins; however, Litecoin distinguishes itself in this matter with a potential of 84 million coins whereas Bitcoin cannot go beyond 21 million coins.
This may sound like a major advantage for Litecoin; however, prices are generally dictated by supply and demand along with consumers as well as investors' interests and financial goals. The price of Bitcoin of around 26,500 CAD compared to just 74 CAD for Litecoin reflects this reality.
Mining algorithms are the rules put in place to govern the computational work executed to mine a cryptocurrency and verify its transactions. Litecoin and Bitcoin have different mining algorithms. Litecoin uses Scrypt whereas Bitcoin uses SHA-256. As a result, Litecoin appears more accessible to people who want to become miners. In addition, the difference in these two algorithms has implications on processing times, making Litecoin four times faster than Bitcoin in processing and confirming payments.
Should You Buy Litecoin?
While Litecoin remains one of the most-traded cryptocurrencies, does it make for a sound crypto investment? On whether LTC is a viable choice, Claudiu Minea, CEO & Co-Founder of SeedOn, a blockchain-based crowdfunding platform has recently said, “There are other blockchain competitors that people can choose from. However, Litecoin still remains a relevant choice.”
Having no additional tech layers added on top of its blockchain, Litecoin is a faster and less costly cryptocurrency to transact than Bitcoin. Moreover, at the time of this writing, Bitcoin transaction fees were considerably higher at around 2% on average, while Litecoin’s transaction fees were nearly 0.07%.
In 2017, Charlie Lee, founder of Litecoin, sold most of his Litecoin holdings, citing a “conflict of interest”. His action triggered a certain loss of faith in LTC. Furthermore, although Litecoin indeed has a much faster transaction per second (TPS) than Bitcoin, new cryptocurrencies faster than LTC are emerging such as EOS, XRP, and Cardano.
What factors affect Litecoin’s price?
Litecoin’s price and volatility are likely to be driven by similar factors to Bitcoin. For example:
- Regulation: cryptocurrencies are currently unregulated by governments and central banks. It is uncertain when this will change and how it will impact their value.
- Supply: There is a finite number of litecoins available to be mined (84 million). Availability may also fluctuate depending on the mining rate of new coins.
- Press: prices of Litecoin can be affected by public perception, security, longevity, and the prices of other cryptocurrencies such as Bitcoin.
- Adoption: businesses and consumers have not adopted Litecoin as a method of payment. However, blockchain technology is considered by many to have the potential to revolutionize how we exchange value. LTC could become widely adopted in the future.
How To Buy Litecoin (LTC) in Canada
Buy via ATMs and Counters with Cash
A simple and convenient way to buy and sell LTC is to use a Bitcoin ATM (abbreviated as BATM or BTM). They are not quite the same as traditional ATMs, but they work similarly. The main difference is that BATMs do not connect to a personal bank account, which is seen by many as a safer option than using exchanges. The Canadian company bitMachina offers such ATMs in Ontario and Québec where you can buy Litecoin and other major cryptocurrencies with cash. Alternatively, you can use a Bitcoin Counter if you prefer to have the entire transaction handled by a cashier. Common locations to find Bitcoin ATMs and Bitcoin Counters are inside retail stores, shops, restaurants, and malls.See all Bitcoin ATMs and Bitcoin Counters in your area
Buy via Credit Card
Another way to buy Litecoin besides using cash at Bitcoin ATMs and Counters is to do it online with a credit card. For your first purchase, you will need to provide proof of identity, which is typically done using a copy of a government ID (driver’s license, passport, resident permit, ID card). This measure is necessary for platforms to comply with government regulations and help them prevent fraud.Buy Litecoin with your credit card
Buy via Cryptocurrency Exchanges
For those looking to buy Litecoin in Canada, choosing a top-rated and trusted exchange is an important first step. The two most popular choices in terms of safety and customer service are NDAX and Coinberry.
Buy LTC on NDAX
NDAX is a cryptocurrency exchange platform established in 2018 and exclusively available for Canadians. The company is a registered Money Service Business (MSB) and is regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
Here are the steps to purchase LTC and other cryptocurrencies on NDAX:
- Sign up for an account and get instantly verified.
- Fund your account. You can do so through an Interac e-Transfer, a wire transfer, or a bank draft.
- Start investing in LTC with as little as 1 CAD, including a fee of 0.2%.
Buy LTC on Coinberry
Similar to NDAX, Coinberry offers Canadians the possibility to trade LTC, among other cryptocurrencies. Based in Toronto and founded in 2017, Coinberry is also registered as a Money Service Business (MSB) and is regulated by FINTRAC. To buy LTC and other cryptocurrencies on Coinberry is comparable to NDAX. You will need to:
- Create an account and get instant verification.
- Fund your account with the option of using a bank wire or an Interac e-Transfer.
- Start trading LTC with CAD with a fee ranging from 0% to 2.5% per transaction.
Buy via Decentralized Exchanges (DEX)
A decentralized exchange (known as a DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. Unlike NDAX and Coinberry which are referred to as centralized exchanges, DEXs do not allow for exchanges between fiat (such as CAD) and crypto. Instead, they exclusively trade cryptocurrency tokens for other cryptocurrency tokens. If you are looking to use a DEX, you will need to have a crypto wallet, which we will explain in the next section.
A potential benefit of a DEX is that no personal information is required. Additionally, it offers a vast variety of tokens ranging from well-known to obscure. However, using a DEX requires particular knowledge. Interfaces are generally quite tricky to navigate, and it is always possible to make irreversible mistakes such as sending coins to the wrong wallet. Therefore, you will need to be prepared and cautious when you start trading on DEXs.
How to store your Litecoin?
In order to store your Litecoin, you'll need access to a crypto wallet. There are two main types of crypto wallets: software-based hot wallets and physical cold wallets.
|Hot Wallets||Cold Wallets|
|Hot wallets are connected to the internet.||Cold wallets are kept offline.|
|Examples include web-based wallets, mobile wallets and desktop wallets.||Examples include paper wallets and hardware wallets.|
|Vulnerable to hacking and online attacks.||Limited threat from hacking and online attacks.|
|Easy and convenient to use.||More expensive and less convenient.|
|Best suited to beginners who need to make quick online payments.||Best suited to those storing substantial amounts of LTC over a lengthy period.|
The main difference between hot and cold wallets is whether they are connected to the internet or not. Hot wallets are connected to the internet, while cold wallets are kept offline. This means that funds stored in hot wallets are more accessible, but more vulnerable to hacking.
Examples of hot wallets are web-based wallets, mobile wallets, and desktop wallets. These wallets are known for their ease of use; however, they can be vulnerable to online attacks. Therefore, it’s crucial to research the reputation of the wallet where you plan to store your LTC. A few renowned wallets that allow LTC storage are Edge, Mobi, and Exodus.
Keeping substantial amounts of cryptocurrency in a hot wallet is a poor security practice, but one can diminish the risks by using a hot wallet with stronger encryption.
On the other hand, a cold wallet is entirely offline. While they are indeed not as convenient as hot wallets, they are far more secure. Examples of cold wallets include paper wallets and hardware wallets.
- Hardware Wallets: they are external devices (usually a USB or Bluetooth device) that store your keys and allow you to interact with the wallet without exposing your data. These devices can connect to your PC, phone, or tablet. A few hardware wallets that support LTC include Leger, Trezor, and BitBox.
- Paper Wallets: for your paper wallet, simply print your private keys and recovery passphrases on a piece of paper and then store it for safekeeping. This is certainly safer than keeping funds in a hot wallet since they are kept safe from remote hackers and phishing attacks. However, it opens up the potential risk of the piece of paper getting destroyed or lost, which may result in irrecoverable funds.
While both methods of storage have benefits and drawbacks, the option you choose will depend on what you are looking for. For example, if you plan to trade day-to-day, then accessibility will be more important, meaning that a hot wallet will be a more suitable choice. On the other hand, if you are considering storing a substantial amount of crypto assets, then it might be wise to invest in a cold wallet.
Frequently Asked Questions
Is Litecoin legal in Canada?
Yes, it is currently legal to buy Litecoin in Canada. Canadian law treats businesses trading in cryptocurrencies as Money Service Businesses (MSBs). If you intend on investing in Litecoin, you should consider speaking to a registered accountant about your options and the related tax implications.
What is the best way to buy Litecoin?
You can buy crypto from several regulated cryptocurrency exchanges such as NDAX and Coinberry. You can also buy crypto from bitMachina’s Bitcoin ATMs and Bitcoin Counters.
How can I buy LTC with a credit card in Canada?
Yes, you can buy LTC online using a credit card. You will need a Litecoin wallet to get verified when purchasing for the first time. To buy LTC with a credit card, click on this link.
Is Litecoin better than Bitcoin?
Which is better depends on your goals, what you want to do with your coins, and your views on cryptocurrency. Litecoin is generated faster than Bitcoin, but Bitcoin is worth more. Bitcoin might be better if you want more value per coin, while Litecoin might be better if you want more coins at a lesser value.
How many Litecoin coins are there? What is the Litecoin maximum supply?
Litecoin has a limit of 84 million coins. There were roughly 71.2 million in circulation by the end of September 2022. As of that date, there were around 12.8 million left to be mined. The percentage of total Litecoin mined is approximately 85%.
Why is Litecoin so cheap?
Litecoin has a lower LTC/USD exchange rate because it has a larger supply and lower demand than other major cryptocurrencies. This is largely due to consumer and investor perspectives. People tend to pay more for a commodity or investment that they perceive has a higher value. Bitcoin is currently perceived to be a more valuable asset; as a result, it is more expensive.