If you’re willing to buy Litecoin, you need to find a trustworthy exchange. But if you want to know how to mine Litecoin and are absolutely sure you have time and gear for that – stop by and read this article. You’ll figure out everything about this in here. Why mining? First of all, it helps keep the network decentralized and duh – it allows making a profit if done smartly. So, without further ado, let’s dive into the topic.
What is Litecoin (LTC)?
You cannot mine this currency without a good grasp of what it is. So, let’s make things clear about it first. The first fact you need to know is that it is a fork of BTC, sort of a ‘lighter version’.
For those who don’t know, a fork comes out when a blockchain breaks up into two paths forward, or when some changes in protocol happen. Different participants need to implement common rules to keep the history of the blockchain. When they cannot come to an agreement, alternative chains show up. This is how forks emerge.
So, as BTC had some drawbacks, Charlie Lee, a former Google employee, created this token to tackle some BTC issues. Thus, LTC has the following benefits:
- Bigger amount of coins: the max supply makes 84 million while BTC finish with 21million
- Transactions are way faster: it takes 2.5 minutes for blocks to be processed, while BTC’s one take up to 10 minutes
- Distinct cryptographic algorithms: LTC exploits Scrypt, and BTC uses more complicated SHA-256
Other facts you need to know are:
- Litecoin mining: 7200 LTC are mined on a daily basis
- A completed mining block gains 12.5 LTC or $875
- More than 75% of LTC have been mined (fall, 2017)
- the last Litecoin is expected to be mined in 2140
- It halves in every 4 years
- It will have 32 overall times
Now, a few words about halving. There’s a certain amount of BTC a validator aka minor gets as a block reward for completing a complex calculation. It is to be cut in half every four years. This means since BTC turns into a more valuable and scarce one, in the nearest future validators will be getting less of it as a bonus. Yet, if the BTC price surges, they can still get more value out of their block compensation.
Therefore, halving is an essential element of any cryptocurrency. But for now, do not worry as LTC will halve only in August 2023.
What is Cryptocurrency Mining?
Litecoin mining as well as other cryptocurrencies one is becoming more and more mainstream at present. But what is it exactly? Simply put, miners aka validators create cryptos by processing and auditing crypto transactions. They simply check data blocks on the blockchain, join the next one, or record transactions in the chain. When they finish complicated calculations, they get compensation in the form of cryptocurrency mined.
These computations are super complex, and you need to have ‘wonder computers’ with huge computational power and energy to actually mine. The whole process is made in a way to eliminate any fraud from the equation. But not all validators are created the same. There are some prerequisites to do it successfully.
Mining three factors
These are actually three main aspects that affect whether you’re going to make money here: hardware fees, energy prices and the current worth of cryptocurrency. To be successful in this business, miners significantly invest in costly semiconductors. Besides, the constant rise and fall of the chips’ cost affect their work as well.
Validators need a wild amount of power to manage computations. That’s why they are in a constant search for the cheapest sources. Thus, renewable energy is a great way out, besides, it has little impact on the environment.
Now, the current value of the cryptocurrency. When it rises, mining firms’ stock prices might increase as well. It’s like gold mining firms’ stocks becoming more valuable when gold is up. The point of making money here divides into two ways: Litecoin mining as a core business or supporting it as a side activity.
Competing and market in the world
60% of mining presently happens in China, and 10% – in the States. However, in the spring of this year, China had this ‘turn on the screw’ in terms of mining. This can open new opportunities for other countries that are ready to build out their hash rates.
Cryptocurrency use and crypto mining are not likely to subside anytime soon. The worth of all cryptos passed a $1 trillion price point at the beginning of the year. The market is not stable, but it costs several times more than it did just a few years ago.
To jump into a promising market, investors can fund cryptocurrency itself or the infrastructure that maintains it, making mining companies an integral part of that framework. So, there are two options to make money here: to invest in cryptos, which is not always successful due to the market’s volatility, and to invest in validators and other infrastructure.
How Does Litecoin Mining Work?
If you want to know how to mine Litecoin, then you need to figure out several options for doing that. It all primarily depends on your budget. Let’s dive deeper into how solo mining works.
Litecoin Solo Mining
Solo miners mean solo performers who purchase all the needed gear on their own and do not share responsibilities with others. The biggest plus about it is that you don’t have to share rewards, and all the money comes to your pocket afterward. Additionally, you don’t have to pay commissions!
Herewith, before jumping into this, it’s crucial to understand that all equipment and electricity expenditures are on you. This can become very onerous and if you cannot afford it, you can regard other alternatives. Besides, you might not win Litecoin mining bonuses all the time, meaning you can work for a few days or weeks without receiving anything.
Litecoin Mining Pools
A mining pool is for those who don’t want to bear alone the risk of solo mining costs. So, a solo player can always join the group of miners and share resources (PC power and electricity). It gives more chances to end up with a block reward since the whole group produces more power. As a result, each miner can get an income on a more regular basis.
It looks like a lottery. With one ticket out of 10K, you practically have no chances to win. If this happens, the rewards will be wild but chances are small it will! If you join the pool with 10K people, every time it wins, you’ll get your reward based on your ticket. In other words, your share of rewards depends on how much power you deliver.
Sometimes, guys from the pool ask to pay a fee to join it. Also, you’ll have to share a reward with others and not solely enjoy it. So, it’s up to you to pick the best way to mine Litecoin. There are many mining pools out there. We’ll briefly describe a couple of them.
Litecoin Mining Pool
It has been around since 2011. They do not charge, and payouts are always free and immediate. It works by a Litecoin mining algorithm called pay-per-share. This means you get Litecoin bonuses in proportion to the contribution of power and electricity you deliver. To ensure security, the team behind it integrated a 2-factor authentication.
Antpool is a giant mining pool in China. There’s no fee for joining it, but the system suggests transaction commissions for blocks the pool mines. Yet, they share all the block rewards. The size of the reward depends on the power contribution. As for the payments, you can get it every day. Now, is mining Litecoin profitable? Let’s figure it out.
Why Should You Mine Litecoin? Is It Still Profitable?
As previously mentioned, Charlie Lee created the token to address several issues related to BTC, especially scalability. Seven years later, the currency demonstrated a solid staying power compared to other BTC counterparts. According to the creator, he created “silver to Bitcoin’s gold”.
The Litecoin mining calculator can count the profitability considering the following factors: electricity costs, your hash rate, pool’s specific fees, the upfront cost of the necessary gear, and the current worth of the token itself. The calculators are usually available on the Internet, and you can always evaluate your chances for good returns.
Is Mining a Good Option For You?
Before hitting the road, you want to assess what it will take. Here, it’s the same. You need to make sure you meet Litecoin mining requirements to get started and to make money. So, we’ll talk here about electricity, hardships with blocks, the currency current worth, risks, etc.
Using computing power while validating blocks ensures more Litecoin rewards. But in the meantime, it’s super electricity-consuming. The more you use it, the more you have chances to get rewards. Usually, when miners start mining, they see their bills grow dramatically.
Electricity expenditures differ and depend on your place of residence. A lot of miners live in China as the energy there is so cheap. For example, in a season of rain (and the rains there are really heavy) they use hydra power. Using renewable power is a common practice there. But in countries like the States, electricity is very expensive, and not everyone can afford to mine.
So, in this case, it makes sense to calculate how much electricity you’re about to use and how many coins you can mine to make the whole venture worthwhile. Again, you can always use a Litecoin mining profitability calculator to understand how much you’ll make.
Hardships with blocks
What is Litecoin mining? It’s like solving a super complicated puzzle. Actually, a human brain cannot tackle it. The thing is that over time each block gets more complicated. When this happens, a PC makes it harder to get mining rewards and the profits decrease respectively.
Another point to consider is your Litecoin mining hardware. When you purchase a car, over time you will want to sell it and purchase a new one. So, you sell and get your money, but it’s not what it cost a few years ago. Thus, a resale value is decreased.
The same works with mining hardware. As far as puzzles become more difficult, hardware might have no value. You lose money. For example, when miners started doing their activity in 2011, GPUs would come in handy at a time. For now, they are no longer powerful and cannot be used.
The worth of the currency
Ok, you bought the great gear, are ready to invest in energy and so on, but what if the value of the token goes down? It is a crucial thing to factor in. To illustrate, you’re mining and each coin’s value is $150. The very next day, you wake up and notice the price plummeting up to $50. That’s a big loss, though! So, in this business, always consider volatility because the price can change overnight.
Find other ways to get the coins
If you regard mining as a method of getting more LTCs, it might be easier to just purchase them. Thus, it is not necessary to fund expensive equipment. There are hundreds of trustworthy crypto exchanges like Godex.io, etc. They don’t ask for credentials, keep your usage anonymous, and in the meantime allow exchanging more than 200 cryptos. It will take a few minutes for you to get LTCs in your wallet.
Speaking of the wallets, it’s up to you to decide whether to purchase LTC or mine it. The point is to pick the most secure way. By the way, hardware wallets are definitely a thing because they cannot be hacked, get viruses, have the info leaked, etc.
Here we’ll outline one more time the main risks as they define whether you’ll be successful in mining. First and foremost, it’s the equipment purchase. The risks are quite high because you invest a big deal of money and have to pay big electricity bills. Therefore, before getting started, use the calculator we mentioned above to make sure you will get good returns from your investments.
Ways to Mine Litecoin
When LTC mining first started, a traditional computer’s CPU or GPU was quite enough. However, as the token grows older and becomes popular, it becomes more complicated to do work with cheap gear. How hard is it to mine Litecoin? Easy mining is gone for good, but still you have all the chances to make money from mining.
Keep in mind that the more power your rig can provide, the more chances you get to receive Litecoin rewards. So, there are a few ways to mine the coin: solo one, mining pool, and cloud mining. The first two are already described in this piece. The third type is cloud mining.
How to start this activity? Here are 4 essential ways to get started. Do not hurry up! As we previously mentioned, use a profit calculator to understand whether your mining efforts are worthwhile. Factor in your hardware and mining pool costs.
Way 1: Litecoin Mining Hardware
The computer, or rig, you use is the crucial factor that will define how successful you’ll be at mining. This kind of rig might have two and up to five GPUs. It will also request cooling for the gear and considerable random access memory that will define the system’s performance. Do your homework before starting and find out how to build a rig.
For more customized options, ASICs are just the thing. These are particular mining tools. For this token, it makes sense to purchase an ASIC Scrypt miner. A great plus here is that you can mine all Scrypt-based cryptos and not just LTC. You can find lots of Scrypt miners on the market like Apollo LTC Pod, etc. We’re not here to promote any of them but make sure you get a good power vs. affordability ratio.
Way 2: Litecoin Mining Software
Now, a few words about Litecoin miner software. ASIC comes with pre-installed software. If it’s GPU mining, users need to pick software on their own, herewith factoring in security. Very often, software packages contain malware. Also, you might find other malicious patterns. Thus, things might happen that you end up mining for the software’s creator since their system sets up their worker by default.
You cannot always find GUI alternatives for mining software, so using the command line might be a way out. The software’s manufacturer and the pool have to provide the following steps. Do not trust random instructions from the web. You can damage the system with the wrong command line configurations.
Way 3: Wallet
After mining LTCs, you need to choose a trustworthy crypto wallet to keep digital assets safe. Just to name a few types: you might like the LTC official wallet that is also a desktop one, a wallet for LTC and other cryptos; Android and iOS mobile one, and hardware wallets.
What’s the difference between software and hardware wallets? And which one to pick?
Software ones are programs or apps you set up on your PC or mobile phone. With it, you can keep your BTC keys on your personal gadget or mobile phone. With hardware wallets, your BTC keys are kept on a piece of hardware. It has been purposefully made for BTC transactions. Experts claim that among all the types, hardware is the most optimal one. It is less likely to be hacked, have data breaches, and be damaged by malware.
Way 4: Install a relevant program
There are many mining programs, and it’s up to you to pick the most convenient one for the rig. For ASIC users, the Litecoin mining software is already included. Also, there are some specifics of setting up the program that you have to learn on your own.
Way 5 (not obligatory): Pick the mining pool
In pools, you share resources. They all differ by commissions and payouts and suggest particular requirements to get started. Here are a few instructions to help you evaluate a pool:
- mining hardware support. Does it work with GPU or phone-based mining? Take your time to verify such things.
- How are mining resources distributed in the pool? The miners who provide better hardware are more prioritized, and they get more returns for their involvement. So, verify how the pool deals with miners and their hardware.
- How is a fee structure organized? The commissions might constitute up to 3%. Find out the costs of joining the pool.
- Is it safe enough? It’s the key problem every crypto entrepreneur faces. The primary thing to figure out is whether it can resist DDoS attacks.
- What about payments? Pools have payment levels, meaning those with stronger hardware will make more than those with weaker ones.
Way 6: Get off!
You can start mining and making money. Have good luck!
Litecoin Cloud Mining
Ok, now you know what solo mining and mining pools are. If these options are not convenient for you, but you’re still interested in the business, there’s good news! You might like the third method – cloud mining.
This is the method when you fund an LTC rig to do all the job for you. You just have a computer! For your information, a mining rig means a set of computers that are only designed to mine cryptocurrency. The more units you have in your group, the more you are able to mine.
In general, this option works great for beginners since they are not obliged to purchase expensive hardware that consumes tons of electricity. Obviously, there’s a price for using this option – to receive cloud mining rewards, participants must invest a certain sum. The bigger it is, the bigger the quantity of coins that you can earn.
Herewith, potential participants should be careful when surveying cloud mining companies to team up with. There are a lot of fraud ones that take the money and in the meantime, they don’t own a rig. So, do your homework before sending money.
How does Litecoin work? Well, it’s unhackable, until no pool gets more than half of the network’s hash power. Each extra layer between you and the LTC network needs credibility and theoretically puts your safety in danger.
Crypto entrepreneurs set up workers – a PC or a mining rig in a pool. You can have one or a few, each meeting different needs. Every worker has a nickname and a password. Make sure it’s impossible to compromise them.
How long does it take to mine a Litecoin? As you can conclude, it all depends on many factors. Hopefully, this detailed piece will help you get a solid grasp of the processes involved in Litecoin mining. Once you jump into the activity, you’ll understand if solo mining works for you. If too risky and onerous, perhaps you’ll proceed to pools or cloud mining.
Also, make sure you know enough about hardware and software, wallets and exchanges. Forums are the best places to look for advice. Ask questions, investigate, check, turn to socials (relevant communities), etc.