I’m really pleased to share the first ‘Guest’ post on BitcoinCoach.co.uk.
The author (Kirsty Bell) is someone I admire enormously. A proven academic and business woman age 24!
What this lady doesn’t know about digital life, commerce and marketing is not worth knowing, I (Daren Forsyth) have been in the digital sector for 18 years and Kirsty is one of my main “go to’s” for opinion. You can keep up with and follow Kirsty on Twitter
In this post, Kirsty sets out a step by step process to buy Litecoin within 24 hours, without debit cards, Paypal or Ebay (steer clear of these methods to buy crypto currency). It’s a great read, precise and informative. I hope you enjoy it and it helps you in someway.
Thank you Kirsty!
How to get your first Litecoin in 24 hours
The rapid increase in Bitcoin’s value has captured the attention of the media and the imagination of the public, fuelling an increased trading velocity and also undoubtedly helping to drive the value of the cryptocurrency to even greater heights.
The focus on Bitcoin has also shone a light on other cryptocurrencies and their potential to co-exist with or even usurp Bitcoin. There are currently around 200 official or de facto currencies in use around the world, so I believe that there is the potential for at least as many peer to peer currencies. At present, Wikipedia lists 37 active cryptocurrencies in use (http://en.wikipedia.org/wiki/List_of_cryptocurrencies).
What is Litecoin?
Perhaps the best known of these Bitcoin siblings is the Litecoin (https://litecoin.org/). Litecoin (LTC) is a peer-to-peer internet currency which is also based on the Bitcoin protocol, but it is easier to mine and enables faster transactions. The Litecoin network is scheduled to produce 84 million Litecoins, in contrast with the 21 million Bitcoins which will eventually come into circulation.
As soon as I heard about Litecoin, I set myself the challenge of getting my hands on some.
My first Litecoin
As anyone who has ever tried to buy Bitcoins can attest, buying cryptocurrency isn’t quite as simple as you might imagine. You can’t go to your local bureau de change and ask them for a few BTC or some LTC. Well, you could try, but the chances are you would receive a few raised eyebrows and not a lot else.
Litecoin provides non-reversible transactions, so payment providers like credit card companies and PayPal will not facilitate a direct purchase of Litecoins. The risk of the purchaser reversing their payment is just too high. I have also read unfortunate stories Bitcoin or Litecoin being sold via eBay, where the seller has received payment and transferred the coins, only for the buyer to mark their order as not received and instigating a chargeback.
Image via CrunchBase
This is a detailed explanation of how I bought my first Litecoin. It is far from being the easiest way of buying Litecoin. It is definitely not the cheapest way of buying Litecoin. However:
- It works.
- It takes less than 24 hours the first time, and less than 10 minutes every time after that.
- You don’t need a bank card and you don’t need to make any bank transfers (a PayPal account will do).
Step 1. How to get a Litecoin Wallet
The easiest part of buying Litecoin is getting a Litecoin wallet.
I already use, and trust, BTC-e, a Bulgarian cryptocurrency exchange where I have previously traded Bitcoin. The registration process with BTC-E.com is simple, and takes just a minute or so. BTC-e will send you an email to confirm your email address, and once you click the confirmation link in the email, you become the proud owner of a place to store your Bitcoin and Litecoin.
Step 2. Buying Litecoin using GBP – getting the right currency
Buying Bitcoin or Litecoin when you are based in the UK adds an extra level of complication. Most exchanges and payment providers won’t actually accept GBP. I am certain that there are some that do, but I ruled a number of them out due to limited information about how trustworthy they were. There is a lot of out of date information on the internet about how to buy cryptocurrency, with many sites reporting that you can buy currency on Mt Gox or Intersango using GBP, but this is no longer the case.
As I was mainly concerned with getting my Litecoin quickly rather than cheaply, I decided to convert my GBP into USD by purchasing a UKash voucher. UKash (https://www.ukash.com/en-GB/) is a fairly well-known payment provider, and you can buy their voucher codes in many newspaper shops.
There are numerous websites where you can buy UKash in USD denominations. After a bit of searching for reputable sellers, I decided to buy mine from http://www.pcgamesupply.com/. Using the basic signup process without verification, I was only allowed to purchase the $50USD denomination voucher. By verifying your account, logging in with Facebook, or by being a long standing customer, this limit increases, but as I mentioned before, I wanted to try and get my hands on some LTC quickly. (Note: PC Game Supply is based in Calgary, Canada, so make sure that your card provider is ok with you making transactions with a Canadian seller).
Step 4. Turning UKash into CashU
Now that you have a UKash code, you can register for a CashU (https://www.cashu.com) account (CashU is a prepaid payment provider, apparently very popular in Arabic countries.) I registered for a Consumer account which took a couple of minutes, and didn’t require any ID verification.
Simply choose “Add funds” > UKash vouchers, and enter the USD amount of your voucher. Then copy your UKash code into the box along with the voucher value, your email address and the captcha code. Click “Pay Now”, and you’re one step closer to buying Litecoin!
Step5. From CashU to Bitcoin Nordic
Please note: the first time you make a transaction with Bitcoin Nordic (https://bitcoinnordic.com/index_en.html), it can take 24 hours to receive your currency. After the first transaction, you tend to receive your coins within 5 – 10 minutes.
Turning your CashU deposit into Bitcoin is a relatively straightforward process, but it is also one of the most expensive parts of the transaction. Bitcoin Nordic is a Denmark company with a good online reputation (which is why I chose it for this experiment). My main issue with Bitcoin Nordic is that it charges a whopping 15% of the total transaction value to turn your CashU into Bitcoins.
When you make the transaction on Bitcoin Nordic, enter your details and your wallet address (I used BTC-e, as mentioned above).
Step 6. The Home straight! From Bitcoin to Litecoin
All being well, within 24 hours you should be the proud owner of some Bitcoin, sitting safely in your BTC-e Wallet.
Once logged into BTC-e, choose the LTC / BTC option; fill in the amount of Litecoin you want to buy, and the price (in BTC) that you want to pay. Once your order has gone through, the Litecoin will be transferred to your wallet, minus the 0.2% BTC-e trading fee.
It’s been a long journey, but you’re now the owner of an obscure cryptocurrency. Congratulations!
A note about transaction costs
You will not have failed to notice the massive transaction costs incurred at every stage of this process, which at the time of the transaction amounted to around 25% of the total amount initially deposited. Fortunately for me, the value of Litecoin has since increased to a level where I have managed to make a small profit, but there are massive inefficiencies in the process of purchasing Litecoin. There are many other, more efficient ways of buying Litecoin than the method detailed above, but they often involve very high minimum transfer amounts or take several days to process.
As the market for crypto currency grows, so will competition in the payment processing sphere, making transactions cheaper and faster. Having a large number of reputable and established payment providers would also help to increase trust in cryptocurrencies themselves and hopefully help to stabilise the value of the currency.
Card / Paypal into UKash
PC Game Supply – $50 USD Ukash + activation fee = approx. £36 (fee approx. 15%).
UKash into CashU
Foreign exchange rate defined by UKash + 7% + 2%
CashU into Bitcoin Nordic
Bitcoin Nordic and partners will keep a total commission of 15% of your transaction when using CashU, or 9% of Cash deposits.