In a nutshell, miners are presented with complex mathematical equations that can only be solved using computers. By solving these puzzles, miners can verify blocks of Litecoin transactions. As a reward for their hard work, they receive LTC.
A simple step-by-step guide to mining Litecoin (LTC)
Find out 3 ways you can mine Litecoin in this beginner's guide.
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Introduced in 2011, Litecoin (LTC) is one of the oldest digital currencies still in existence. Mining Litecoin has increased in difficulty and decreased in profitability over the years, but it is still possible. However, you'll need access to sufficient time and resources in order to make a profit. Make sure you you've run the numbers before investing in Litecoin mining, as often times it may be a better idea to invest in Litecoin than mine it.
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How do I mine Litecoin?
Assess the pros and cons of each of the three mining methods outlined above. Once you've decided which method is the right choice for you, read on for step-by-step instructions on what you need to do to start mining Litecoin. The main ways to mine Litecoin are:
Method 1: How to mine Litecoin at home
- Create a Litecoin wallet. Before you start mining, make sure you've set up a private wallet where you can securely store your LTC.
- Choose your hardware. Compare the hardware options available for mining Litecoin – for example, will you be setting up a rig with multiple GPUs or investing in an ASIC miner? Remember to consider the cost of power and adequate ventilation when organising your setup.
- Installing software. If you're using an ASIC miner, your hardware will most likely come with pre-installed mining software. If you're mining using a graphics card, you'll need to download and install free mining software, so make sure to research your options, and only download from trusted websites.
- Start mining. Follow the instructions in your software package to start mining Litecoin. Remember to store any LTC you earn in a secure wallet and monitor the performance of your equipment and the price of Litecoin regularly to ensure that your mining remains profitable.
Method 2: How to mine Litecoin using a mining pool
- Create a Litecoin wallet. Compare Litecoin wallets and choose one that offers the right features and security protections for you.
- Choose your mining hardware. Select the hardware you'll use to mine LTC, such as an ASIC miner or a GPU mining rig.
- Install any necessary software. Most ASIC miners come with pre-installed software, but if you're mining with a GPU, you'll need to download and install Litecoin mining software from a trusted provider.
- Choose a mining pool. Compare the rewards, fees, minimum payouts and other features offered by a range of Litecoin mining pools. You may even want to sample a couple of pools before deciding on one for the long term. Please note that some pools will require you to use recommended software
- Start mining. Make sure your LTC rewards are moved to a private wallet as soon as possible. Recalculate the cost of mining regularly to ensure that your operation remains cost-effective.
Method 3: How to mine Litecoin using a cloud mining service
- Choose a cloud mining company. Do your research to find out what services are available and what benefits they offer. Remember that cloud mining scams are a very real risk, so it's essential to make sure you're dealing with a reputable provider.
- Select a mining package. Take a look at the mining contracts on offer from your chosen company. How much do they cost? How long do they run for? What mining equipment will be used? What sort of payout can you expect? Is it possible to customise a package that better suits your requirements?
- Pick a mining pool. Once you've purchased a plan, you'll usually need to select a mining pool. Once again, compare the available options and consider their fees, size, minimum payouts and more before making your decision.
- Start mining. You can now start cloud mining Litecoin. Make sure to move any profits you receive into a secure Litecoin wallet that allows you to control your private key.
If you want to mine Litecoin, make sure you're fully aware of all your options and the potential risks involved with each approach. By doing your research and finding the right setup for your needs, you could eventually make a profit mining LTC.
Frequently asked questions
Is Litecoin mining profitable?
This depends on a range of factors, including everything from the mining rig you're using to power costs where you live. Use an online mining profitability calculator to work out your total costs.
How often are Litecoin blocks generated?
Litecoin blocks are generated every 2.5 minutes, four times faster than bitcoin's rate of every 10 minutes.
How big is Litecoin's block reward?
Litecoin's current block reward is 25 LTC. However, the block mining reward halves every 840,000 blocks, so it will reduce to 12.5 LTC in 2019.
Image source: Shutterstock
Disclosure: At time of writing the author holds ADA, ICX, IOTA and XLM.
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