Following the rise of Bitcoin, the first cryptocurrency, there were a number of other currencies which quickly came around.
Before we delve into how to mine Litecoin, let us first take a quick look at what Litecoin really is:
A decentralized, peer-to-peer network which is used to transfer payments from one person to another, Litecoin functions identical to Bitcoin in many ways. Similar to Bitcoins, Litecoins too are not controlled by a particular person or an organization. Similarly, they are available to be bought or sold at virtual cryptocurrency exchanges, and carry a monetary value that increases and decreases with time. Similar to Bitcoins, Litecoins too, can be mined.
Similar to Bitcoins, Litecoins too have a limit. Like there are 21 Million Bitcoins, Litecoins are capped in at 84 Million. While Bitcoins run on the SHA-256 Algorithm, Litecoins make use of the Scrypt algorithm for proof-of-work hashing. Litecoins have been around since 2011 and are one of the oldest and most reputed cryptocurrencies in the markets.
Check out our detailed chapter on what are altcoins
Let us now take a look at the topic at hand - Mining for Litecoins.
Mining for Litecoins is very similar to mining for Bitcoins. This too, involves a four-fold setup. You’ll need to have four things in place before you could begin to mine for Litecoins:
A Litecoin Wallet
Litecoin Mining Hardware
Litecoin Mining Software
Litecoin Mining Pool
Let us now take a look at all four of these components in detail and why they are important -
Wallets are similar to a bank account if you compare it with the real world. Each user who intends to mine litecoins must have a Litecoin mining wallet. These wallets come with a public key and a private key. The public key is like your bank account number, which you give to people who intend to pay you money. Then there’s also the private key - which is like your signature which you use to verify transactions. While public key is safe to be given out to users, your private key must remain only with you.
There are a number of wallets available for litecoin users. Wallets can be hardware, software, desktop based, web-based as well as mobile based. Let us take a very quick look at some of the best wallets for litecoin users:
Ledger Nano S
These are among some of the most popular choices when it comes to Litecoin wallets. Most of these are multifunctional wallet services, meaning they’d allow you to create wallets for different types of cryptocurrencies. For a more detailed insight on what wallets are and different types of wallets, check out our complete guide to wallets.
Similar to mining Bitcoins, mining for Litecoins too, used to be possible in the past with the help of CPU systems and GPU systems. However, that has now changed. As an increasing number of people are mining for Litecoins with every passing day, the Litecoin mining hardware too, has advanced. Today, it is no longer profitable to mine for Litecoins using CPUs. GPU mining too, would yield little to no result.
However, similar to Bitcoins, dedicated ASIC devices have now started to come out for Litecoin mining as well. The Litecoin mining hardware is a scenario which has changed a lot in the recent years. As per multiple sources, the only major ASIC device available for mining Litecoins is the AntMiner L3+
The AntMiner L3+ has just hit the markets in 2017 and is a very popular ASIC miner for Litecoins. It comes out with a hashing power of 504 MH/s. It comes with a 180 day warranty. AntMiner has a good track record when it comes to mining devices.
If the AntMiner L3+ isn’t available in your region or is out of stock due to the high demand, you might also try out the AntMiner S7 - which can be used to mine Bitcoins, which can later be converted into Bitcoins. However, the L3+ is a better option as you can directly mine for Litecoins.
You can use our Litecoin Mining Calculator to calculate profitability.
Usually the CGMiner is used when it comes to mining Litecoins. However, with the changing times and changing technologies, the GUIMiner - which is basically a GUI version of the CGMiner has become quite popular. Some miners also come with their own dedicated software bundles. Also, pretty much all Bitcoin Mining Software would work with Litecoin mining devices once the AntMiner L3+ gets mainstream.
Fourth and final topic in this list - pools. Litecoin Mining Pools are critical to the needs of the miners. Pools are critical because when mining alone, you have limited resources and a limited budget. However, when a number of people pool in their resources together - they could mine together and share the rewards. This ensures that a faster, more periodic network of mining is set up which helps in faster profits.
However before entering a pool a number of things need to be checked out. Four things need to be kept in mind before choosing a mining pool:
Rewards Payment System
For a more detailed analysis on mining pools, check out our chapter detailing what pools are and how they function.
These are your four basic elements. Get your hardware and software in place, set up a Litecoin wallet and connect with a Pool to start mining for Litecoins. Litecoin is a popular choice as it is one of the most popular currencies when it comes to actual market acceptance and liquidity, perhaps second to only Bitcoins! It has always been among the top 10 currencies and is a major player in the world of altcoins.
You can also read our tutorial on how to buy Litecoins if you don’t want to mine them.