Mining Litecoin: beginners guide

/Mining Litecoin: beginners guide

Mining Litecoin: beginners guide 2018-02-23T16:12:28+00:00

Litecoin is a cryptocurrency that uses an algorithm known as Scrypt. Litecoin is convenient as it can handle big numbers of transactions because of its fast block generation.

Litecoin mining is the process of doing mathematical calculations with computer hardware, for confirming transactions. As a miner, you need to gather transaction fees, confirm them and be awarded Litecoins for each block that you verify.

If you are interested in mining Litecoin then you are in the right place. Do you want to know how to mine Litecoin? Well, here are some methods of Litecoin mining with their pros and cons.

  1. Cloud Mining

If you don’t want to spend a lot of money on equipment, but you’re very much interested in Litecoin mining then cloud mining is a good solution for you.

Cloud mining services rent out their facilities. It is a good alternative for minimizing costs as a miner (cheap electricity, low fees) and for being more productive.

Cloud mining rates for Scrypt algorithm miners is $7.50 per 1 MH/s, with a minimum hash rate of 1MH/s, maintenance fee $0.005 / 1 MH/s / 24 hours.

Pros of Cloud Mining

  • Low costs
  • No equipment needed
  • No ventilation needed

Cons of Cloud Mining

  • Many scams
  • Shady Cloud mining operations
  • Low profits
  • Unable to change the mining software
  1. Mining Pools

Mining pools are the network of several people who wish to mine and collaborate while mining a block and eventually split the profit with one another.

A very important parameter that you should take into consideration while joining a mining pool is its reputation.

A mining pool with a good reputation will provide you stability and progress. As for profitability, you need to know that high hash rates mean the variance of profits is lower.

Pros of Mining Pools

  • Fast and easy
  • Low costs
  • Shared resources
  • More profits from a mining block

Cons of Mining Pools

  • Rewards are shared among miners
  • Risks of service attacks
  1. Solo Mining

When you do solo mining, you keep the rewards just to yourself. Currently, the award per block is 25 new Litecoins (the number is halved with every 840,000 blocks).

The rewards might not be as sustainable as in case of pool mining and might be a bit more complicated to start with.

Solo mining the costs are a lot higher and to have a better idea you should check out the special Litecoin mining calculators.

Pros of Solo Mining

  • Reliable
  • You keep all the rewards to yourself
  • Can be profitable in long run

Cons of Solo Mining

  • Inefficient
  • High costs
  • Unsustainable
  1. GPU mining

For beginners, GPU (Litecoin mining hardware) is a very good option. Even though it may seem complicated at first, it will help you to get a better idea about the processes of mining.

It is also very important to pay attention to the temperature and make sure that the cooling system is working well enough as mining is very intensive.

The GPU mining costs largely depend on your electricity costs. With the help of calculators, you can check your potential profits.

You may assume that the values are 150 MH/s for hashing speed, 750 watts for power consumption (RX 470 GPU) and put the electricity rates that correspond to your country’s electricity rates.

For a more detailed understanding of costs, you should take into account the cooling costs too.

Pros of GPU mining

  • The best way of learning about mining process
  • Profitable (see below for more details)
  • Fast
  • Efficient

Cons of GPU mining

  • High energy consumption
  • Confusing (at first)
  • Creates extra costs for ventilation
  1. CPU mining

Some miners claim that CPU is one of the easiest methods to start with. However, if we compare the hash rates of CPU to GPU, GPU is much better as the hash rate is around 5 times faster.

Note: Miners have to create a cryptographic hash of the block. The cryptographic hash function is a set of hash functions with certain features, and mathematical algorithms for mapping data of any size.

The whole process of hashing may get difficult if the blocks appear often to create competition.

Pros of CPU mining

  • Easy for starters
  • Useful for better understanding of the process
  • No specialized hardware is needed

Cons of CPU mining

  • Low hash rates
  • Vulnerable to bot networks
  • Not very flexible

Guide for mining Litecoin using GPU

Can you mine Litecoin?  Yes, you can. Let’s find out how you can go about it using GPU.

For GPU (Graphics Processing Unit) mining you’ll need a good graphics processor, for which many laptops aren’t fast enough. To solve this issue miners often get machines that can keep many graphic cards.

If you want to know how to mine Litecoin, here are the steps to litecoin mining using GPU?

Step 1

Decide if you want to do solo or pool mining.

Solo mining

What should you do to get started?

  • Get Litecoin client installed and configured.
  • Afterwards, you need to catch up with the network to get started with mining.
  • Then set up the Litecoin client and open in the %appdata%\litecoin folder.
  • Right-click on the folder, “new” and choose “Text Document”.
  • As a result, a window will pop up on your screen and ask if you want to change the extension of a .txt file to .conf, and you need to choose
  • You are ready to start mining litecoin.

Setting up mining pool

To do this, register an account on a website of your preference. However, you need to be very careful in choosing one as some sites are scams.

Step 2

Create a wallet to store your Litecoins.

You can install your wallet from the official website of Litecoin, for your operating system. It is very important to keep your wallet very safe. To do so, keep your key safe and avoid losing it.

Step 3

Install a mining software. In this case, we will use CGMiner. After downloading it move the files to Local Disk C:\

Step 4

To start mining go to cmd.exe and run this command:

Pooled mining

  • c:\cgminer-2.11.3-win32\cgminer -scrypt -o http://coinotron.com:3334 -u <login> -p <password> -thread-concurrency 24000 -I 10 -g 1 -w 256

Solo mining

  • c:\cgminer-2.11.3-win32\cgminer -scrypt -o http://127.0.0.1:9332 -u username -p password -thread-concurrency 8192-l 10 -g 1 -w 256

Now determine the optimum settings

  • -I – this is the intensity that can be between 0 and 18 that decides your hash rate. 18 may be intense and freeze your computer. You need to see which rate is the most efficient for you.
  • -g – this is the GPU threads.
  • -w – this is work size.
  • -temp-cutoff – here you set the maximum temperature.
  • -thread-concurrency – must be multiple of 64.

7xxx cards 64* bus_width_of_card_in_bits. For example, in case of 7950, you’ll have 64*384=24576

Step 5

If everything is doing fine, you’re welcome to do shortcuts on the desktop by right-clicking on your desktop, “new”, “Shortcut” and paste the commands.

How does Litecoin mining work?

  1. Litecoins are created
  • Hashing
  • Solving mathematical algorithms
  • New equations created by the network every 2.5 minutes. Note: The time that takes to solve the algorithms is known as V confirmation time.
  • The mining difficulty is adjusted with every 3.5 days. The mining difficulty may vary depending on the number of miners as well, the higher the number of miners the more difficult the equations get and vice versa.
  1. Network is strengthened
  2. Transactions are verified and used

Can Litecoin mining be profitable?

To understand if Litecoin mining is profitable or not, let’s look at some numbers;

Block time: 2m 27s (the time for each block to be completed)

Last block: 1, 339, 867

Block reward: 25 (by solving one block you get 25 Litecoins)

Block reward 24h: 25

Difficulty: 3,569,205.589

Difficulty 3 days: 3,524,870.838

Difficulty 7 days: 3,491,958.019 (As you see the difficulty grew as more Litecoins were mined)

Nethash: 104.28 Th/s

Estimated rewards:

Per Pool Fee Est. Rewards Rev. $ Cost Profit
Hour 0.000029 0.003200 $0.88 $0.07 $0.81
Day 0.000697 0.076800 $21.03 $1.68 $19.35
Week 0.004882 0.537597 $147.20 $11.76 $135.44
Month 0.020924 2.303986 $630.87 $50.40 $580.47
Year 0.254578 28.031835 $7,675.53 $613.20 $7,062.33

 

As you see, mining Litecoin may be rather profitable and you can have a breakeven in around 100 days.

The hardware costs vary depending on speed, to give you an idea about the current prices:

Radeon HD 7990 – speed 1100 KH/s, power 375 W, Price $600

Radeon HD 7970 – speed 700 KH/s, power 250 W, Price $310

Radeon HD 7950 – speed 600 KH/s, power 200 W, Price $255.

Is mining Litecoin safe?

Litecoin mining is safe if you do it properly.

  • avoid scams and websites which are creating the impression of “too good to be true”.
  • Check the reviews and the ratings of the websites you are working with, and deal with transparent, trusted companies.
  • make sure your Litecoin wallets are secure; you may save a few dollars on cheap wallets, but may lose thousands of dollars if they are not good enough.

Be aware that Litecoin mining may be taxed in some countries. For instance, the IRS is treating the incomes of cryptocurrency as a capital asset and is taxed 15% – 20% based on the amount of income.

For more detailed information you need to check the tax law of your country/state.

let’s sum things up

Litecoin mining is simple, safe and profitable if you avoid scams. You also need to be aware of regulations and taxes in your country. More importantly, choose the most efficient method of mining for you based on the information provided above. Check out our other articles to learn more about other cryptocurrencies.