[OUTDATED: NOTE THAT THIS ARTICLE REFERS TO TWO PAYMENT PROCESSORS – LIBERTYBIT AND CAVIRTEX – WHO HAVE SINCE CEASED THEIR OPERATIONS. YOU CAN STILL USE THIS ARTICLE AS PURELY CONCEPTUAL GUIDE TO CONVERTING CRYPTOCURRENCY TO FIAT]
In previous articles we covered how cryptocoins (such as Bitcoin and Litecoin) work, how to set up your first Litecoin mining rig, and how to start mining Litecoin. By now you should have already accumulated some Litecoins and now you want to make your hard earned virtual money work for you. Fear not for today we will cover how to make money with Litecoin.
The whole process is fairly straightforward. In Canada, you are in luck as there are a couple of services available to convert your virtual coins into loonies. The only thing you have to keep in mind is that you will most likely need to first convert your Litecoins into Bitcoin, as majority of places that allow you to trade virtual currencies for paper (or as it is more formally called fiat) money only accept Bitcoins. So at a high level your digital retirement plan might look something like this:
Sounds easy enough? Well it is! Let’s break down each one of these steps.
Detailed Steps to Make Money with Litecoin
- Open an account at an exchange where you can trade Litecoins for Bitcoins (I use BTC-e virtual exchange in this article). This should not take you long, since we will only be using BTC-e for trading virtual currencies, so no identity verification is required
- Open an account at LibertyBit and follow the instructions on the site to get verified. Since we will be withdrawing real cash using EMT (Interac Email Transfer), LibertyBit will want to know your real identify. The verification process usually takes 2-3 business days.
- In your Litecoin client, go to BTC-e and click on Finances link in the top right corner. Click on Deposit next to LTC line. BTC-e will generate a Litecoin address that you can use to transfer Litecoins into your BTC-e account.
- Using your Litecoin client, send Litecoins to your BTC-e address. Remember that you must be absolutely sure that you are sending your coins to the right address. Coins sent to a wrong address will most likely be irrevocably lost!
- Another thing to keep in mind is that in order to process transactions faster, Litecoin and Bitcoin clients automatically add miner fees. This fact, as trivial as it may seem, actually takes a bit of getting used to. One issue is that you cannot specify total amount that you have in your wallet, you need to factor in the fee, which is usually equals to 0.01 LTC. Another annoyance is that, although you can set the desired fee in the LTC wallet client, you may need to pay more in some cases, for instance, if your LTCs are very “new”, ( meaning you have just mined them or got them recently transferred from another address) or if your transaction is relatively small (i.e., you are trying to send 1 LTC) . If you don’t want to incur increased fees, increase the size of your transaction and/or wait until your coins “mature” a bit (typically about 30-60 min or so).
- Once, you send LTCs to your BTC-e address, you need to wait a bit (about 10 min), until your transaction is confirmed 6 times on the Litecoin network. Then BTC-e will acknowledge your deposit with a popup message.
- Next, go to the main screen and sell some Litecoins! This is actually very easy on BTC-e. Just put the number of LTCs you want to sell in Amount LTC box in the Sell LTC section of the site and click Calculate. BTC-e will automatically do the math, deduct appropriate transaction fees, and present you with the final amount of BTCs you will get in exchange for your LTCs.
- Click on Sell LTC. BTC-e will create a Sell Order for your LTCs and will do it’s best to find a corresponding Buy order. If it’s unable to do so, it will keep your order indefinitely until the price of LTCs catches up with your desired target (if that will ever happen). You can always cancel a pending order and create another one with a revised price point, if you don’t want to wait.
- Next step is to transfer your BTCs into LibertyBit account. This is also very easy. Log in to LibertyBit, navigate to Accounts, then Deposit. Just like BTC-e, LibertyBit will give you a Bitcoin address that you can transfer your BTCs into.
- Go back to BTC-e, click on Finances, then Withdraw next to BTC line. In provided dialog box, put the LibertyBit Bitcoin address from previous step, specify the amount of Bitcoins you want to transfer, and click Withdraw.
- One nice security feature of BTC-e is that before it disburses the funds, it will send you an email with a confirmation link. Once you click on the link, the money will be sent to LibertyBit. Note that Bitcoin transfers are slower than Litecoin’s. Expect up to an hour delay before your BTCs appear in your LibertyBit account.
- On LibertyBit’s website, go to Trade, then Sell Bitcoins and trade some of your bitcoins for $CAD.
- Next go to Accounts, Withdraw, and chose CAD as currency and EMT as transfer method. Specify the amount you want to withdraw. Don’t forget to jot down security phrase presented by LibertyBit.
- Wait for EMT email to come in and deposit money into your account.
That’s it! You can see that even though there are quite a few steps involved, the process is actually pretty simple.
I hope you enjoyed this 4-article series on how to get started with mining Crypto-currencies. One thing we can say for sure, despite the fact that crypto-mining can be sometimes frustrating and stressful, it is nonetheless an exciting technical and business frontier to explore and take part in.