Litecoin is a decentralized, peer-to-peer network that’s used to make payments between two or more people or entities. Litecoin functions in a similar way to Bitcoin. Just like Bitcoins, Litecoins are not controlled by any particular person, organization or government. Also, they’re available to be sold or bought at virtual cryptocurrency exchanges, and they carry a monetary value that decreases and increases with time. Also, just like Bitcoins, Litecoins too can be mined and they also have a limit. However, Litecoins utilise the Scrypt algorithm for their proof-of-work hashing while bitcoins run on a SHA-256 Algorithm. Litecoins have been in the cryptocurrency market since 2011 and they are among the most reputed and oldest cryptocurrencies.
Mining for Litecoins is similar to Bitcoin mining. The mining process involves a four-fold setup. Users will need to have four different things in place before they can start to mine. These are:
- A Litecoin Wallet.
- Litecoin Mining Hardware.
- Litecoin Mining Software.
- Litecoin Mining Pool.
1. Litecoin Wallets
These are similar to having a bank account. Users who intend to mine Litecoins need to have Litecoin mining wallets. These wallets have a private key and a public key. The public key is similar to a bank account number and it’s given to the people who want to pay the user. The private key is like the user’s signature and it’s used to verify transactions. The public key is safe to give out to users but the private key must remain confidential. There are quite a number of wallets which are available for Litecoin users. The wallets can be software, hardware, desktop based, mobile based as well as web-based. Some of the best wallets recommended for Litecoin users are:
- Ledger Nano S
- QT’s Litecoin wallet
2. Litecoin Mining Hardware
Mining of Litecoins in the past used to be possible with the aid of GPU systems and CPU systems just like Bitcoin. However, that changed. As the number of Litecoin miners is increasing with every passing day, so has the Litecoin mining hardware advanced. Today, it’s not profitable mining Litecoins using CPUs. Also, GPU mining would yield little in terms of result. But, dedicated ASIC devices have been developed for Litecoin mining. The Litecoin hardware scene has changed a lot in recent years. The major ASIC device that’s available for Litecoin mining is the AntMiner L3+. This device has just been released into the markets in 2017 and it has become very popular. It has a hashing power of over 500 MH/s.
3. Litecoin Mining Software
The CGMiner program is usually used when it comes to Litecoin mining. However, with the changes in technology, the GUIMiner has become quite popular. The GUIMiner is essentially a GUI version of the CGMiner. Some miners now come with their own dedicated software bundles.
4. Litecoin Mining Pools
These are critical to the needs of miners. Pools are crucial because when users mine alone, they have very limited resources and limited budgets. But when a number of users combine their resources, they can mine together and in the end share the rewards. This guarantees a faster and more periodic mining network is set up which aids in quicker and large profits. However, before participating in a pool, the following four factors should be considered.
- The credibility of the pool.
- The rewards payment system of the pool.
- The pool fees.
- The pool location.