Welcome to our post: Litecoin mining, a must-read beginner’s guide to excellence. Litecoin is a peer-to-peer cryptocurrency that offers instant, near-zero cost payments to any person around the world. It works as a decentralized global payment network without any central authorities. This digital currency was launched in 2011 by Charlie lee, a former google engineer. Through substantial industry support, it’s now a medium of commerce complementary to Bitcoin. According to the creator, there will only be 84 million coins in circulation.
Mining is done using specialized computers that secure the network. All transactions that appear on the Litecoin network are assembled into large bundles called `blocks’. These blocks constitute a record of all transactions which is commonly referred as the blockchain.
This is where you’ll keep your coins. The best option is to go to Litecoin homepage and check the download link for the wallet app. Although users can access majority of wallets from other sources, some of them take a lot of time to download an entire blockchain. There is also an option for wallet encryption which allows the users to secure their wallet so that they can view their account balance and transactions. This means, before you spend your Litecoins, you’ll have to enter your password. The encryption option ensures you conduct a sanity check when sending payments. It also provides protection from wallet-stealing viruses. The Litecoin wallet application is available for Windows, Mac and Linux. You’ll need to verify your email on the account settings section.
How Litecoin mining works
Before any Litecoin can be sent, all transactions must be included in a block. They are then verified through a `proof-of-work’. At the same time, the incoming transactions are compared with the previous ones on the blockchain. If no double-spends are identified, the miners can go ahead to create a new block. The transactions are then sent to the network where the miner uses the nodes to verify and transmit them. For each block that is mined, a block reward is paid. This makes it easy for miners to contribute to the network. What makes this digital currency unique is the fact that, old transactions cannot be erased. Most importantly, no fraud transactions can be created without the permission of the network. The security and strength of the cryptocurrency is what attracts many people to use it.
For every block, miners are rewarded with 25 new Litecoin. Halving takes place in every four years. This translates to every 840,000 blocks which is equivalent to four times the currency unit of bitcoin.
How to profit from Litecoin mining
Litecoin mining profitability depends on electricity costs, price of Litecoin and the hashing power of your hardware. Thankfully, it’s easy to determine the potential profitability of the hardware you are using. Unless you have mining hardware, you can mine the cryptocurrency your GPU or CPU. Between the two, GPU is the most efficient in terms of performance. However, the cost of mining using CPU and GPU can exceed the rewards. Today, many people use ASIC hardware which enables the user to mine faster. Before you purchase any ASIC hardware, you should consider the following;
· Power consumption
Choose a hardware that gives more reward than what you pay on your electricity bills.
· Resale value
ASIC hardware can only be used to mine coins which contributes to low resale value
You should analyze your network since difficulty may arise in future as more and more miners join the network. This may drive down your profitability in the long-run.
· Delivery delays
You don’t want a hardware that is delivered several months after purchase
Solo or pool Litecoin mining
You can either take mining as a solitary venture or join a mining pool where people take a share of their rewards. When you go solo, you’ll keep full reward of your efforts which reduces the odds of being successful. On the other hand, when you join a pool, the reward will be shared among the members but you’ll have a higher chance of solving a block. From an expert point of view, it’s usually more complicated to configure your software for solo mining than pool mining. Pool mining is divided into two categories;
· Pay-per-share (PPS) system
Users are rewarded based on the number of blocks the pool is expected to find and the amount of work done by users. The pool pays Litecoins for each valid shares submitted by the users. One of the main benefits of this system is that it uses mathematical laws of probability. With that in mind, users can enjoy minimal variance steady payouts. They don’t have to wait for blocks to be confirmed. The only downside of PPS system is that the pool operator has to bear the risk in case of bad luck. This makes it financially risky.
· Proportional systems
The pool waits until one user finds the block before distributing it to the rest of the users. This is done proportionally depending on the number of shares each user had distributed. In order to start mining, you have to register an account. Since choosing a mining pool is a matter of personal decision, it’s important that you consider the features, reputation, user support and reliability of the mining pool. If you are a beginner, you should go for pool mining to create a steady stream of income.
Watching your miner
Once you’ve set up your software of choice, statistics will start flowing down your command line. You’ll see all the information about the currency, mining pool and mining hardware. The good thing about using personal computers with dedicated graphic cards is that you can run different software at the same time.
It’s possible to buy miners on Amazon. Some of the best Litecoin mining hardware for purchase includes the AntMiner L3+, DualMiner USB, Gridseed miner among others. Nowadays, miners use a specialized hardware called ASIC. All ASIC devices come with preinstalled mining software that requires little or no configuration.
If you are new to cryptocurrency you need a profitability calculator. It will show your expected profit margin based on pool fees and hashing power. Best of all, you can input your hardware and power costs per hour. The results are displayed on daily, weekly or monthly basis. The calculator will also show how long it will take to break-even.
Since Litecoin does not have one central authority that controls money supply, the work is spread across a network of miners. It features improved storage efficiency, incredible encryption properties and faster transaction confirmation times of 2.5 minutes. In September 2017, it topped out a record high run of $92.07 per coin. Litecoin is now the 2nd most popular cryptocurrency.