Litecoin Mining: A Helpful Guide The made national news headlines this year, mostly for its rapid growth. News outlet CNBC that “Litecoin hit a record high, up nearly 1,400 percent this year.” Litecoin rose in rankings to the fourth-largest cryptocurrency in the world, and it wasn’t the only cryptocurrency experiencing growth – bitcoin, ethereum and many others were inching up as well. The litecoin community, however, activated a technology upgrade this year, which sparked additional interest. Segregated Witness, which is also known as “,” increased the cryptocurrency’s capability and transaction speed, which are important factors in the mining process. Prospective miners just starting out and those who have mined other cryptocurrencies but not litecoin in the past may wonder, “What is the best way to get started?” Here is a helpful guide to review before setting up a litecoin mining rig of your own. How Is Litecoin Different?

Litecoin is often compared to the digital currency bitcoin, and for good reason. Litecoin was heavily influenced by bitcoin when Charlie Lee developed it in 2011. The theory and the setup are similar to that of bitcoin; however, there are a few major differences that set the two cryptocurrencies apart. The lifetime cap of the currencies is different. Litecoin has a lifetime cap of 84 million coins, which is about four times more than bitcoin. In contrast, bitcoin has a cap of 21 million coins, and the currency is further along in its growth cycle, meaning that fewer coins are available. Fewer coins available can translate to a higher value for each coin.

Litecoin has faster block generation. The holy grail of mining is faster block generation. Rewards are earned only when blocks are generated, so the faster you can generate those blocks, the better. Litecoin’s block generation time is 2.5 minutes instead of bitcoin’s 10 minutes. As a result, litecoin transactions are confirmed about four times faster than those of bitcoin.

Mining litecoin is reported to be easier easier due to a lower difficulty in solving a block. Use a “proof of work” concept during the mining process. The algorithms that each cryptocurrency mining process utilize are also very different (more on this in a minute). Plus, even though earning litecoins is said to be easier, the value of a bitcoin is currently higher than that of a litecoin, so it’s important to put the ease of mining in perspective with each coin’s value. The proof of work algorithm is different.

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Bitcoin uses the SHA256 algorithm, and litecoin uses a scrypt algorithm; they are very different. Here is a quick breakdown of the two algorithms. • SHA256 algorithm. This algorithm favors systems that have the largest processing power (CPU mining) during the mining process. For this method, the more processing power, the better. • Scrypt algorithm. The scrypt mining algorithm is designed to take a different approach and favors systems with the largest amount of random access memory (RAM) for mining.

Computers with powerful graphic cards (GPU mining) that were used frequently in the past for bitcoin mining but are rarely used today can be repurposed for litecoin mining. In addition, the scrypt approach to mining makes it easier for people with basic home computers to participate. As a result, a new individual to mining cryptocurrency could get everything set up in an afternoon, join a mining pool, and start earning litecoins right away. But let’s take a deeper dive into equipment. What exactly do you need to get started?

Let’s take a look. Getting Started: Selecting the Right Mining Hardware Are you new to mining cryptocurrencies? If so, you’ll find out quickly that the computers used to mine are called “rigs.” A personal computer can also be used to start mining by simply uploading the right software and joining a mining pool – or you can purchase one of these rigs. Opting for a mining computer does have benefits, including the ability to keep the computer cool, since it runs for long periods of time.

Prolonged heat can decrease the life span of a computer, so the ability to cool it is something to consider if you’re getting started with mining. One popular option for litecoin mining is the ASIC Scrypt Miner. This is a dedicated machine that helps increase mining power.

A low-power model can also help save on electricity bills and help increase your ROI when you calculate all the expenses associated with mining. A benefit of using a dedicated ASIC Scrypt Miner instead of a personal computer is that the technology can typically mine other types of cryptocurrencies as well (some can even mine two simultaneously).

Some new miners opt to purchase a secondhand unit from a dependable seller to minimize startup costs. In addition to the hardware, you’ll also need to consider litecoin mining software options. If you purchase an ASIC device, many of the setups come with preinstalled software, so you should be set. If you don’t have software installed, here are a few options to consider. This program was originally designed for bitcoin but can mine for litecoin via scrypt as well.

This mining program is designed for a variety of cryptocurrencies, but also has the ability to mine litecoin. This program can mine for litecoin, bitcoin, and a variety of other cryptocurrencies. Once you have a computer and your software set up, it’s time to start thinking about where you’ll keep all the litecoins that you’re awarded during the mining process. At this point, you may wonder, “How can I set up a wallet?” Setting Up Your Wallet With fiat currencies, you have a physical place where money is stored. Maybe it’s a bank or a simple wallet inside a purse or a back pocket. Cryptocurrencies are similar in that you need a place to store the altcoins; however, the storage method is much different.

Wallet encryption allows you to secure your wallet and view balance information and transactions from a desktop or mobile device. The wallet is password protected, requiring you to enter key information prior to sending litecoins, but it also offers protection from viruses and Trojans that may try to infiltrate and steal your altcoins. Download a wallet at Litecoin’s website, which allows you to securely store litecoin on your computer, tablet, phone or laptop. Here is a link for. On the download page, there is also a visual at the top left-hand corner that verifies the current price per litecoin so you know today’s current value or if you are liking to buy litecoin. Now that you’ve secured a litecoin wallet, let’s discuss the mining process in more depth. At some point, you will question whether working alone is the best choice or if you should join a group.

The answer to this question will depend on your experience with cryptocurrencies and a few other factors. Let’s take a look. Mining for Litecoin: Work Alone, or Join a Litecoin Mining Pool? Working alone is an attractive option, mostly because you don’t have to share the rewards, which adds more money to your wallet. But don’t be fooled by this appeal, especially if you’re totally new to mining. Mining pools are beneficial to new miners because everyone’s resources are combined and block discoveries occur more frequently, meaning you are lowering the litecoin mining difficulty.

For example, working alone, you may discover a block once a year, but when you work in a group, those discoveries – and payouts – are more frequent. Key to joining a group is understanding how the rewards are paid and split. Here is a breakdown of the two most common methods. The proportional system. Everyone in the pool works, and once a user finds the block, the reward of that block is distributed among all users. The amount of payment received by each person is proportional to the number of shares that each member submitted.

The drawback to this type of setup is that it’s easy for a person to cheat the system. For example, “pool hopping” may occur, which is a method in which miners exploit payment mechanisms of various pools to increase their personal profits.

Pay-per-share system. For this approach, users are not rewarded based on how many blocks the pool actually finds, but instead on how many the group is mathematically expected to find. As a result, the group is paid a fixed number of litecoins, which is determined by the mathematical laws of probability. The advantage of this approach is that users can enjoy a steady stream of payouts without the need to wait for blocks to be found and confirmed. The drawbacks affect mostly the operator of the group because he or she takes on the risk of having bad luck. If you’re new to mining or want to start out slowly, join a group and measure the results. Payment is more frequent, and you can earn as you start to learn more about the mining process.

Most headaches are off-loaded to the administrator of the pool, so the learning curve isn’t so intimidating. When talking about mining, it’s also interesting to talk about mining profitability. How much will you earn, and what does that amount translate to in your currency?

And equally important, will it offset the upfront cost of getting started? Let’s find out.

How much can you earn? Experience Points XP Minin. Let’s say that you join a group and your group is awarded a block. What is the value of that block, and how does it compare to fiat currency, such as the U.S. Currently, miners receive 25 new litecoins for each block. This amount is halved about every four years – or 840,000 blocks. As of October 3rd 2017, a litecoin is $51.92. Keep in mind that the value can fluctuate greatly, but that is the value at this moment.

For example, let’s say that you’re mining alone and you’re awarded a block – worth 25 litecoins. If each litecoin is worth $47.74, then you would receive $1,193. But remember that if you’re mining alone, the amount of time it takes to receive a block could be very long – a year or even longer. Also, if you’re part of a mining group, the amount that you receive if your group discovers a block will vary, based on the rules and the setup of that group. But you can keep on top of the current value of litecoin by using a, which shows today’s rate, market cap and trading volume. The cryptocurrency site also displays the value at the top-right corner of the. Outside of up-front costs, you will have the consistent cost of electricity that needs to be factored in to profitability.

When building a mining rig, you will need to take account of the power supply requirements based on the size of your rig and how many graphics cards are being used. Efficiency is very important in order to maximize profitability, so don’t take the cheap route when choosing a power supply unit (PSU). Mining Litecoin: Worth the Investment?

Mining for litecoin is a worthwhile task for many, but at the end of the day, cryptocurrency is based on math, so it’s important to understand whether the ROI is penciling out for your situation. Accomplish this by adding up the cost of all equipment – the rig, software, electricity – and match these costs against the litecoins that you’re earning. Naturally, the first year will be less profitable because of that upfront investment, but if you’re breaking even (or getting reasonably close), that’s a good start. When the numbers look bleak, don’t worry.

Take a break from mining and purchase litecoins on the exchange market, participate that way and dabble in mining in the future. But in the end, it’s all about testing, learning and staying flexible to find the best and most profitable strategy moving forward. What Is Genesis Mining? Genesis Mining offers you a smart and easy way to invest your money. Our solution is suitable for those who are new to the world of cryptocurrencies, as well as for cryptocurrency experts and large-scale investors.

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