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While there have been a number of new cryptocurrencies that have attracted attention, none have come into the spotlight as much as the largest cryptocurrencies such as Litecoin (LTC)trade. In fact, there are talks that it may be the next big crypto thing after Bitcoin(BTC)trade.
Maintaining its position in the top five digital currencies, Litecoin has gotten more fans now than ever, with many trying their hand at Litecoin mining. If you wish to get into the world of Litecoin mining, or are just a hobbyist or crypto enthusiast, this article discusses everything there is to know about it.
What is Litecoin?
For those unfamiliar with it, Litecoin is a blockchain based cryptocurrency, developed by Charlie Lee in 2011. With a lifetime cap of 84 million virtual coins, it has a block generation time of 2.5 minutes, and uses Scrypt algorithm, which favors RAM capacity for mining purposes.
With decentralized money picking up a large crowd of fans, it is well known for providing anonymity, privacy and transaction security. It has been dubbed as the silver to Bitcoin’s gold. In fact, CNBC reported that “Litecoin hit a record high, up nearly 1,400 percent this year.” Perhaps it is due to Litecoin’s all new Segregated Witness, or SegWit, improves the overall capability and transaction speed.
Litecoin Mining Uses ‘Scrypt’
While Bitcoin mining is now only done by large mining rigs, and organizations dedicated to that purpose, that is not the case with Litecoin mining. It uses Scrypt, which means that the computers with good GPU specifications, that were used for BTC or ETH mining, can be repurposed for mining Litecoin. Litecoin mining is different due to its low block generation time, and quicker transactions.
For those unfamiliar with the term, Litecoin mining refers to processing any transaction that occurs on the Litecoin blockchain by solving a complex mathematical problem. The first one to solve the problem is rewarded with Litecoin tokens.
The Purposes of Litecoin Mining
Litecoin mining is a major method of digital currency production, which would help Litecoin reach its cap value in circulation. In addition, it acts as a method of record keeping, allowing users to validate the transactions that occur on the network before putting it up on the blockchain, the public ledger. This ensures that the transaction is legitimate, and gives an aspect of security without compromising the privacy and anonymity of both parties involved in the transaction.
This gives accountability to the whole token, making it a trusted altcoin. In fact, Litecoin regularly ranks in the top five cryptocurrencies by market capitalization, which is no mean feat indeed.
What is Required for Litecoin Mining?
There are a number of steps one has to follow, if one wishes to get into the world of Litecoin mining. It is one of the few virtual currencies that can be mined by individuals who have a good GPU. In fact, many enthusiasts have invested in multi GPU systems for their mining rigs.
This is the reason mining just one block occasionally is not enough to generate any real profit. A huge amount of power is required to mine crypto, making it a losing venture unless you intend to mine a good number of blocks.
Select the Right Mining Hardware and Software
With a number of options available, it might be difficult to choose the mining rig with the specifications you think are ideal. Computers that are being used for crypto mining are referred to as “rigs.”
You can use your personal laptop as a rig by installing the right software. Alternatively, you can invest in a system for this very purpose. The advantages of going for a dedicated rig is that it is designed to keep the system cool, and can also come with power saving modes. Mining is a high power consuming activity, and it could result in very high temperatures, which could damage normal devices, and also result in high bills. A popular option is the ASIC Scrypt Miner, which offers power saving models.
Having the right mining software is just as important. While many systems come with the software pre-installed, if you’re using your personal laptop you have to manually find and install the best software for your needs. A few popular options are Cgminer, CUDAminer and Cpuminer.
All these options support Litecoin mining, along with a few other tokens as well. Some hardware can use them to mine two blocks at the same time as well, which is an added advantage. Once all this is set up, one tends to think about the next step in Litecoin mining: setting up a wallet.
Setting up a Litecoin Wallet
While conventional fiat currency has a physical wallet, cryptocurrencies are stored in a virtual wallet. It is essential that you have a well encrypted Litecoin wallet. Encrypted wallets allow you to store the cryptocurrency on your local device, and it is quite important to stick to a secure wallet to store your altcoins.
Types of Litecoin Miners
It is possible to mine Litecoin both individually, and in a group.
● Solo Mining
This is an incredibly attractive option, seeing that you do not have to share your profits. You get to keep all the 25 tokens you earn, plus rewards. However, it requires a lot of time and resources. In addition, you risk not getting a single block to mine. Additionally, this only works if you invested a fair amount in dedicated hardware and software for mining, as those using just CPU, or a single GPU, have no chance of ever earning a Litecoin throughout their mining.
This means that mining solo might never be a good option, unless you have unlimited or abundant resources. This leaves most people dependent on the second option, mining pools.
● Mining Pools
Pool mining involves a number of miners pooling in their resources to achieve a successful mining. The resources they put in may vary based on the capacity of individuals involved. Any rewards are divided based on the hash power you contributed to the pool. Chance still plays an important role, but you have a better chance at earning steadily with mining pools than with solo mining.
Security is extremely important, and has to be considered before selecting a pool. Choosing a pool is an important decision, and there are a lot of factors that affect pool operations. All these must be considered with care. Researching the history of a pool, leadership team, reviews and so on are quite essential before you decide on a pool that fits your resources and time. This could determine your profits, how well you can mine, and so on.
Very large pools often have great mining prowess, but your portion of the profit would be accordingly less than in other pools. Smaller pools often are not able to compete with medium to large pools, in terms of computational power. Pool fees also have to be considered.
Hash Rate in Mining
An important factor in mining is the hash rate. If you’re wondering what hash rate is, it can be described as the output of a hash function. As far as cryptocurrency is concerned, it is used to describe the speed of computation. The higher the hash rate, the higher your chances of finding the next block and maximizing your profit.
It is computed in hashes per second, and measures the machine speed, making it an easy way to measure how well you or your pool fare.
There are a number of questions being raised as to whether it is wise to continue mining Litecoin in 2019. Mining revenue has gone down for almost every crypto token, and even Litecoin has registered a fall of about 1% for a while.
The fact remains that Litecoin is one of the few profitable altcoins that can be mined by individuals with a regular laptop or computer. This makes it profitable, even in 2019. There are certain points to keep in mind, though, to ensure that your device does not undergo too much damage due to Litecoin mining:
● Make sure to place your rig in an area with sufficient ventilation and cooling. Mining is an activity that requires high power, and can heat up your rig to an extent that it damages your device completely. A ventilated and cooled area can prevent a lot of damage.
● Ensure that you set up the right rig. Most rigs have a number of GPUs as mining requires intense computational power. This can be supported by multiple GPUs rigged to a system, or by using the right software to meet your mining requirements, be it solo or in a pool.
● Make sure you join the right pool. Get the right balance between pay, fees and poolsize, for a good mining experience that is profitable in the long run.
Litecoin mining is a great way to familiarize yourself with the crypto world. It could be a profitable activity that could prove to be a good investment of your time and resources. You would be required to hold the right tools to go about with it, but it would definitely be worth it in the long run if done properly. This makes it a must know for every crypto enthusiast who is interested in crypto mining.