Virtual “mining” is one of the most interesting things in the crypto space. The idea of using the computer to make a passive income in cryptocurrency has attracted a flood of entrepreneurs in recent years, much like the gold rush of the 19th century. This article deals with the mining of Litecoin, one of the oldest and most famous cryptocurrencies.
What exactly is mining? By and large, blockchain networks and cryptocurrencies can be decentralized. That is, not under the control or operation of a single company. Every transaction in a network must be checked and confirmed. Once this is done, a “block” is added to the network for this transaction, which (hence the name) forms a chain of blocks.
The check is carried out by “miners”. Computers that perform a special function to solve a system of algorithms to complete the block. Many miners compete first to solve the algorithm. Whoever does this will be rewarded with coins from this network (e.g. Bitcoin).
Bitcoin mining has long been the most popular as the coin itself has the highest value. However, this means that the competition is also the highest and therefore the most difficult to generate adequate returns. Because of this, less competitive coins like Litecoin can actually bring better ROI due to more consistent rewards.
This guide will teach you how to start mining Litecoin.
What is litecoin?
Let’s start with a brief explanation of what Litecoin actually is.
There is a common phrase used to describe Litecoin. If Bitcoin is gold, Litecoin is silver. Litecoin was created by former Google engineer Charlie Lee as a junction from the Bitcoin code. Litecoin works very similarly to Bitcoin and is designed to process transactions faster. This makes it a better option than everyday payment method.
Litecoin was first released in 2011. It has since been one of the highest rated altcoins and was Bitcoin’s biggest competitor before Ethereum was released. While Litecoin’s valuation has fallen slightly compared to other large-cap coins, it remains one of the best transactional currencies out there. Litecoin is currently accepted by over 200 online and brick-and-mortar businesses.
What to consider before you start mining Litecoin?
Crypto mining isn’t quite as easy as grabbing a pickaxe and digging. There are several requirements to think about before you start, and frankly, not everyone will be able to mine crypto.
You will need a substantial investment to mine Litecoin. In the early days you could degrade on any decent computer. Because of the nature of mining and the way users compete with each other to get the block reward, the equipment used for mining has become incredibly powerful. Anyone who tries to mine on a regular computer will be hit hard every time.
To have a realistic chance at block rewards, you need a bespoke mining computer and the ability to pay the electricity bills to run that machine. Due to the cost of electricity relative to crypto prices, mining is not always possible in some parts of the world as you probably won’t get enough returns to cover your electricity bills on your own.
You need to consider how much daily return you are likely to get after your electricity bills. Also, think about the time it will take to recoup the money it took to break down hardware. You can make $ 2 a day, but if you spend $ 1000 on a mining computer, it still takes more than two and a half years to break even. Provided the price of Litecoin doesn’t change. It could go up and your mining could become more profitable, but it could also go down and leave you at a loss.
There are several alternatives for those who want to get a piece of the mining pie but cannot afford to run a setup themselves. We’ll get to that a little later, but first, here’s how to mine Litecoin yourself.
How to Mine Litecoin
The first thing you will need is a crypto wallet to keep your coins in. For the mining of Litecoin, the best option is the Litecoin core wallet, which is developed and supported by the Litecoin developers.
Next, you will need a machine to mine Litecoin. You can put together a mining setup or rig yourself, or buy a custom-made crypto miner. China-based Bitmain is one of the world’s largest mining equipment suppliers and sells a range of mining computers through its website. Bitman’s Antminer machines are designed for crypto mining and generally offer the most efficient combination of processing power and energy consumption to get the best ROI when mining Litecoin.
If you have expertise, you can create one yourself. The main components you will need are:
- One or more high-level graphics processors (GPUs)
- A cooling unit or fan (miners run the risk of overheating with the energy they use).
- A kind of scrypt mining software
Generally, rigs are set up with a number of connected GPUs for the highest performance and the highest chance of winning the block reward. This means that you will likely need enough space for the machine.
You need to ensure that you have consistent access to power and internet connections in order to mine Litecoin in a smooth operating environment around the clock. If you don’t plan on holding for the long term, sign up for a crypto exchange so you can move around the coins you have mined. With an exchange like Binance you can exchange your Litecoin for Bitcoin, Ethereum or a variety of smaller coins, while with Coinbase you can withdraw your coins for fiat currencies (USD or EUR).
After all, running a mining operation long term isn’t quite as passive as you might think. It is important to keep abreast of all developments in the mining industry. Crypto and crypto mining are still very young, so changes are constantly taking place. Miners need to evolve with the changes. New technology may emerge that, for example, makes older machines obsolete. This can also include updates to the Litecoin network that may affect the mining algorithm.
Hardware equipment
The Antminer L3 ++, the Innosilicon A4 and the Innosilicon A6 are currently among the best Litecoin miners. Choosing the right and most efficient miner will make all the difference as you compete for the Litecoin network’s rewards.
There are several factors that make it more profitable to mine Litecoin and other digital assets. One of these things is related to the hardware the miner is using. Users of older ASIC miners will perform less well than users who have purchased newer, more powerful hardware.
The most popular miner for Litecoin is the one created by Bitmain and named Antminer L3 ++. This is an update of the previous model Antminer L3 +. The machine has a hash rate of 596 MH / s with a power consumption of 1050 W. The miner was released in May 2018 and works at a temperature between 0ºC and 40ºC.
The A4 Dominator developed by Innosilicon was the world’s first 14 nm Litecoin miner to go into mass production. The ASIC miner was launched in 2016 and delivered in mid-October 2016. This miner offers 280 MH / s per unit with an output of + – 10%. At the same time, it has a consumption of 1.5 W / MH, which means that it would consume 420 W.
With a speed of 1230 MH / s and a power consumption of 1500 W, the A6 is one of the most powerful Litecoin miners on the market. The miner can also work with an ambient temperature between 0ºC and 40ºC.
Power consumption
Now that Litecoin has just halved, making miners more efficient by cutting costs will be more than important. Electricity and its associated costs are one of the most important things for miners to be profitable or not. Higher electricity prices clearly have a negative impact on revenue when you mine Litecoin.
To reduce electricity consumption, miners usually work in colder regions and countries. Russia, Iceland, China, and Canada are good locations for crypto miners to locate their operations. At lower temperatures, miners need less cooling to work efficiently – that is, they offer the highest hash rate and use as little power as possible to keep them cool.
Renewable energies are also a great way to make Litecoin more profitable. Moving to places with abundant energy reserves (wind, solar, or hydraulics) could be a great way to cut expenses.
Mine Litecoin the non-solo way
If crypto mining sounds a little daunting, that’s because it is. You can no longer set up a small mining operation in your home office and compete with commercial mining operations. Fortunately, there are some alternatives for those who do not have the funds to get started on a commercial scale.
One option is to join a mining pool. This is where many people put their computing power together to solve the block transaction and earn block rewards. Because the rewards are shared between the parties, the returns are lower, but access to mining is possible with a much lower investment.
Another option is to buy shares in a mining company. This allows companies that operate mining equipment or larger mining operations to build larger and more competitive facilities for a higher return on investment. While those who cannot afford it or who do not want to mine themselves can invest and earn a passive income.
There are many reputable companies that operate mining pools or invest in mining operations, but there are also many scams out there. If you are looking to invest in any of these methods to mine Litecoin, it is best to do a thorough research and verification so that you do not fall victim to an illegitimate operation.
Mining Litecoin: In summary
Bitcoin mining is no longer possible on a less than commercial level. And while Litecoin mining goes in the same direction, it’s a lot more realistic for someone who runs a solo mining operation.
Depending on where Litecoin price is headed in the near future, a mining investment in a bear market like that of 2018 could pay off significantly in the event of another bull run.
If you want to start mining Litecoin now and have the means to do so and at the same time want to make a profit, the best thing to do is to invest in one of Bitmain’s Antminer machines. Just stay in touch with the market so you won’t be left behind with new advances in mining.
Want to learn more about the price and profitability of Litecoin mining? You can read our full (and constantly updated) Litecoin price prediction here.
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