Litecoin has become one of the biggest cryptocurrencies on the market since it was launched way back in 2011. It’s established itself as a terrific alternative to Bitcoin and other leading cryptocurrencies, climbing to within the top five based on market capitalization. More than $4 billion in LTC coins are in circulation, with more than 20 percent of the full supply still available to users.
While Litecoin may lack the jaw-dropping prices of Bitcoin and the other top cryptos, it still holds a massive degree of interest, with seasoned crypto traders recognizing it as a viable replacement for Bitcoin. Sadly, countless miners feel they have been priced out of the Bitcoin mining rush — but that’s not the case with Litecoin. You can still dip your toes into the Litecoin mining waters and join fellow LTC miners.
It’s a daunting process for any beginner, so we’ll answer your biggest questions below.
Cryptocurrency Mining: What is it and How Does it Work?
Every cryptocurrency exists on blockchain technology. Blockchains are distributed ledgers designed to keep records of all transactions, and they’re connected by thousands of users’ computers running different mining software. These mining programs continually solve the intricate logarithmic equations required for confirming information related to all transactions completed with the crypto (in this case Litecoin).
All cryptocurrency miners receive a reward for solving equations: a portion of new coins ready to spend or hold.
Crypto mining serves two primary functions: the miners keep the cryptocurrency’s network secure through verification of transactions, and the new coins awarded to successful miners boosts supply. This helps to keep miners incentivized to maintain the network’s security — it’s a positive cycle that benefits everyone.
Essential Facts About Litecoin
When Charlie Lee created Litecoin in 2011, he managed to overcome some of Bitcoin’s biggest stumbling blocks and create a new cryptocurrency that has gained popularity with users worldwide.
Here are some of the most important Litecoin facts you need to know as a newcomer:
- The maximum supply of Litecoin available (84 million) is higher than Bitcoin’s (21 million)
- Litecoin’s transactions are processed more quickly than Bitcoin, with blocks completed every two and a half minutes; Bitcoin’s, though, are processed every 10 minutes
- Litecoin utilizes a different algorithm than Bitcoin: Scrypt; Bitcoin relies on the SHA-256 instead
- As a fork of the Bitcoin Core client, Litecoin was built to be a more lightweight form of Bitcoin (which is where the “lite” part of the name originates)
- Each day, 7,200 LTC are mined
- A successful LTC mining block earns the miner 12.5 LTC ($620 as of October 2020)
- Close to 79 percent of all Litecoin coins have been mined (as of October 2020)
- It’s predicted that the final Litecoin is to be mined in 2140, as hard as that may be to believe
- Litecoin halving takes place after each four-year period that passes (see below for more)
- Litecoin’s halving process will occur 32 times overall
What does “halving” mean? Basically, this involves reducing the amount of coins miners can expect to receive when they successfully mine a block. This will happen again in summer 2023.
How to Mine Litecoin?
In the early days of Litecoin’s creation, miners could process transactions using the CPU or GPU of a standard computer — but mining with cost-effective systems only becomes harder as the coins age and gain popularity. Mining isn’t as easy as it once was, but you can still generate profits when you mine Litecoin.
However, please be aware that the more powerful your computer is, the higher your likelihood of scoring Litecoins. Bear this in mind when you’re thinking about the amount of cash you can invest into your mining rig. You could be looking at far higher costs than you expect.
But now that warning’s out of the way, let’s move on to the fun stuff: how to actually start mining!
You can choose from three mining options: solo; joining a mining pool; or litecoin cloud mining.
Solo mining is ideal if you’re focused on learning the process by yourself without being expected to share any of your rewards. Still, you’ll have to cover the total cost of the mining process on your own, which can be hard if a lot of time passes between winning Litecoin.
A mining pool is similar to the solo mining process, but you can pool resources with fellow miners instead. This offers a higher chance of receiving a payout, though it demands you buy specialized hardware: dedicated GPUs or an ASIC (application-specific integrated circuit) miner.
Getting Started with LTC Mining
Now that you’re prepared to dive into the heady world of Litecoin mining, let’s break down some of the most important aspects.
First, take advantage of a Litecoin profit calculator to ensure your mining works for your budget and doesn’t cause you any financial issues. Utilize a Litecoin profit calculator when pricing up your mining pool and hardware expenses.
Secondly, don’t be a stranger to the Litecoin subreddit over at Reddit. This is a fantastic place to learn how to design the right Litecoin miner for your goals.
Choosing your hardware can be a real challenge, but we’ll make it easier for you below.
Buying hardware for LTC Mining
The computer you utilize for mining Litecoin (or your “rig”) plays a major role in determining your effectiveness.
These typically include between two and five GPUs, but they may have even more in some cases. It’s crucial that your computer carries enough RAM and cooling capabilities to prevent pushing it too hard.
If you want to try a more customized approach to setting up your LTC rig, you might prefer to utilize an ASIC option instead. These are dedicated mining systems, and you’ll be better investing in an ASIC Scrypt miner for Litecoin. This is suitable for mining any cryptocurrency based on Scrypt, not just Litecoin.
Not sure where to start? We’ve picked three of the top Scrypt miners for you to consider. Make sure you do a little research before you choose one of these or any other that catches your eye, though.
Choosing your Litecoin wallet
A crypto wallet is an essential element of any miner’s kit. Why? Because you need to store your shiny new LTC somewhere.
Consider the following options, or feel free to look for others. Again, do your research for total peace of mind before you commit.
Preparing your program for mining
Multiple mining programs are available, but not all will be right for your rig. Look at your options, speak to other miners, check reviews — do everything you need to. If you go for an ASIC miner, this should come installed with mining software.
We don’t have space in this article for configuring your mining program in detail, but you can find plenty of insights at the LTC wiki when you’re ready.
Pick a mining pool
If you’re looking to pool your mining resources with others, don’t undervalue the importance of choosing your pool carefully. There are varied fees, minimum payouts, and hardware requirements to consider. To help you, we’ve created five tips for choosing your mining pool:
- Check that your mining rig is supported by the pool, as some will be unable to support GPU or smartphones
- Try to understand the structure of the fees and how this will impact your potential profits
- Explore the way in which your possible mining pool allocates resources — they may prioritize miners who use better hardware, so be sure you won’t lose out because of your system
- Look into the security available at the mining pool, as good cybersecurity is paramount for keeping yourself safe from hackers and their attacks
- Investigate payment thresholds at any pools you consider joining, and you could struggle to receive your payment if your hardware is weaker than that of your fellow miners
We hope these help make this difficult process easier for you. The following mining pools offer Litecoin, so you might want to check these out before you commit to a decision:
Last but not least, you can discover which pools have the most users by checking the hash distribution rate before signing up.