How to Mine Litecoin – A Beginners Guide
In theory, Litecoin is the silver to Bitcoin’s gold. And just by using that phrase, I got you curious about mining cryptocurrencies. The following manual will tell you everything you have to know and provide you with a few tricks of the trade. You’re in the right place.
Even though this is a beginners guide, we’re going to discuss Litecoin mining specifically.
If you’re unclear about the concepts behind mining cryptocurrencies in general, we have a detailed guide for that.
There’s no rush, get familiar with those ideas and come back.
If you already know what “hash rate” is, get comfortable and start reading this tutorial. Your future mining operation begins here.
Litecoin's history and characteristics
This coin exists since October 7th, 2011. The creator is Charlie Lee, ex Engineering Director at Coinbase. It’s a Bitcoin fork that’s virtually identical to the source material, with very specific exceptions:
- A new block is generated every 2.5 minutes, to Bitcoin’s 10.
- Litecoin’s maximum supply is 84M, to BTC’s famous 21 million.
- Its hashing algorithm is scrypt, instead of Bitcoin’s SHA-256.
- Transactions are cheaper and faster than Bitcoin’s.
As a consensus mechanism, like Bitcoin, it uses proof of work. Other characteristics:
- The current block reward is 12.5 LTC.
- The next halving will be around August 2023.
From the beginning, Charlie Lee’s aim was to work in tandem with Bitcoin. Never to compete. And that’s one of the reasons it’s still around.
This was a clear policy, Lee even said that he used the Scrypt hashing algorithm so that miners could work on both coins at the same time.
In the beginning, Lee wanted people to mine LTC using their normal CPUs. This didn’t last. As popularity rose, the GPUs took over the game.
Only for the GPUs to be completely faded out later by the famous ASICs, or Application-Specific Integrated Circuits.
Is LTC mining profitable?
It can be. It depends on the price of electricity where you live, but it’s could be very profitable.
If you put your money where your mouth Is and ensemble a proper mining rig, nothing can stop you from making money.
Now, remember that Litecoin mining is an extremely competitive endeavor nowadays. It’s basically as competitive as Bitcoin mining.
You’ll need a few ASIC machines if you want to go solo, or you’ll have to join forces with a powerful mining pool if you want a team.
There’s a third road to mining profitability, for people who don’t want to bother with technical equipment.
Let’s explore all of the options further.
Different types of mining
Pick your poison. Each of these options offers advantages and disadvantages. None is perfect.
Nowadays, if you want to go solo you’ll need a few ASIC miners working together. It’s the only way to compete.
It’s possible that you go days, even weeks, without earning a reward. When you do, though, you get to keep the whole block reward: 12.5 LTC.
This modality is only advisable if you know what you’re doing.
Join a group of miners and pool your resources together.
It’ll maximize your chances to earn rewards. When you do, the system will pay each of the pool members proportionally to their contribution.
A Litecoin mining pool is your ticket to a steady income.
You’ll be subject to other people’s rules and ways to do things, though. It’s a tradeoff.
Be aware that some mining pools charge a monthly fee. Others a percentage of your earning. Nothing’s for free.
There’s a solution for you if you’re interested in payouts, but not in equipment and maintenance.
There are cloud services that offer computing power for rent. Put it to work in the mines and get the dividends with much less hassle.
Of course, it will cost you. Nothing’s for free.
Litecoin mining vs Ethereum mining
The main difference, and this is a huge one, is this: GPU mining is still possible in the Ethereum ecosystem.
You definitely need an ASIC miner for Litecoin. There are no two ways about that.
These two are among the most respected Altcoins around, but at the moment ETH is a hotter commodity.
This year’s price increase makes Ethereum more profitable to mine at the moment.
How to mine Litecoin in four and a half easy steps
To validate and secure this blockchain, you’ll need at least one ASIC miner. The disadvantage here it’s the high cost of entry.
The advantage is that it’ll be a much more straightforward process. These modern cryptocurrency mining machines are pretty much plug-and-play.
The process is simple. You could be making money in a matter of minutes.
These machines come with a warning sign, though. ASIC mining tends to cause centralization, and no blockchain wants that.
Some coins and projects continue to make efforts to keep their mining process ASIC-free. And this could happen to any coin.
So, the risk for you is that you can buy a very specific machine and be thrown out of the network at any moment.
So far, Litecoin has embraced the powerful ASIC miners and it’s comfortable with the way things are functioning.
A characteristic of the space, though, is that everything changes fast.
You’ve been warned.
Now, let’s get down to business.
Step one – Due diligence
Your mining operation’s profitability depends on multiple factors.
The cost of electricity where you live, your hardware’s cost, the mining pools fees, the hash rate of your equipment and, of course, the price of LTC.
It’s your responsibility to consider every aspect and make the calculations.
Take into account this is a dynamic market, and its characteristics change by the minute.
What’s profitable today might not be tomorrow and vice versa.
Step two – Get a Litecoin wallet
You’ll need a wallet to store your earnings in.
When it comes to cryptocurrencies, a cold hardware wallet is always recommended. If you invested in a Ledger Nano or a Trezor, you are already in business. Obviously, they support Litecoin, one of the world’s most respected cryptocurrencies.
The next best choice is a desktop wallet, a program that you download and run from your computer. On Litecoin’s website, they recommend the full node client Litecoin Core and Atomic Wallet.
If your wallet needs to be connected to the Internet, it’s a web wallet. Those are hot wallets and are considered the least secure ones. On Litecoin’s website, they recommend Guarda Wallet and the Coinbase one.
In any of those options, obtain your public address and wait for further instructions.
Step three – Pick and order an ASIC miner
Throw that graphics card out of the window, you’ll need ASIC mining if you want to play in the big leagues. In fact, several ASICs working in tandem would be ideal. It’s not necessary, though, unless you have your sights in solo mining.
You’ll have to invest if you want to be eligible for the payout, in this coin it’s as simple as that. What’s not simple is getting your hands in a professional Litecoin miner. These things are selling like hotcakes. You’ll have to perform some intelligence work on Bitmain’s website if you want to be considered as a client.
Step four – Join a Mining pool
To be able to compete in today’s market, you’ll probably have to be a part of a mining pool. You’ll contribute the hash power that your mining hardware can provide, and your team’s chance of success will increase accordingly. The reward is split proportionally between the mining pool’s participants. The more blocks the team validates, the biggest the payout.
In most of these organizations, you’ll have to pay a pool fee or a maintenance fee.
Among the most popular Litecoin mining pools active today are ViaPool, Poolin, LTC pop, Antpool, Litecoinpool, and Dpool.
Do your due diligence and research their history and leadership team, security, trust pilot ranking, and user reviews. And determine how much is their fee. It varies. Choose. Register.
Get your pool address. Select the location closest to you for latency reasons.
A pro tip would be to join two mining pools and have one in stand by, just in case the other crashes or something unexpected happens.
Step five – Configure everything
Depending on the mining pool of your choosing, this last step is different. What you want to make sure of is that your ASIC miner knows what pool to work with, and your mining pool knows to which wallet address to send the profits.
Go to your miner, click on the IP Reporter button until you hear a beep. Your IP address will appear on the screen. Go to your machine’s manufacturer’s website, log in, and create an account. Then, associate your wallet’s public address and your mining pool’s address with your miner’s IP.
In other models, you’ll have to copy your IP in the browser’s address bar. You’ll get a screen asking you for name and password. Your miner’s documentation will contain a default name and password for you to log in the first time. Once inside, you’ll be able to configure everything.
In some mining pools, you’ll have to log in to their website and associate your wallet’s public address to your account.
Step five and a half – Start mining
Fire up your Antminer l3 and let the predetermined mining software solve the mining algorithm.
If you configured everything right, there’s not much else you have to do. Let the machines do the heavy lifting.
This is a complex subject. There’s no shame in having more questions. Be thorough.
How long does it take to mine 1 Litecoin?
It depends on your mining operation’s hash rate.
If the hash rate is 2,200,000.00 KH/s and you’re consuming 2,100.00 watts of power, it’ll take 18.9 days to mine 1 LTC.
How often are Litecoin blocks generated?
A new block is generated every 2.5 minutes.
How big Is Litecoin’s block reward?
The current block reward is 12.5 LTC.