If you are interested in owning cryptocurrency, there are several ways you can do this. The most popular one is buying crypto. However, to buy it, you need to have a starting investment, and people often aren’t ready to give up a lot of their fiat money for Litecoin or any other cryptocurrency.
The other method is mining cryptocurrencies. Essentially, miners are people who use their hardware to contribute to running the decentralised network powering the cryptocurrency. The network rewards them for their contribution based on some predetermined rules. In a way, you still need to invest in your mining rig if you want to maximise your chances of getting rewarded.
How Litecoin Mining Works
Miners around the globe earned approximately $4.7m (€4.1m, £3.5m) in November 2013. In March 2021, they earned a total of $63.7m, according to Statista. Even though the overall revenue from mining crypto fluctuates, there’s definitely an increase, as more and more people are adapting to using crypto in everyday exchanges.
Litecoin (the token carries the symbol Ł, as above, however it is usually abbreviated to LTC) mining isn’t that different from bitcoin (BTC) mining. Simply put, your device is one of the “nodes” in the decentralised network, and it will keep it running along with thousands of devices around the globe that are connected to the Litecoin network. In other words, thousands of miners from all corners of the planet run the network and get rewarded for it.
The miners let their devices engage in solving difficult algorithms. The node that solves the algorithm first gets a chance to verify the blocks and add them to the blockchain, thus receiving appropriate compensation in LTC.
We’ll stop with explanations here, as it would require sufficient technical knowledge to go into the small details. The only thing you need to remember is this: the more powerful your computing device is, the higher your chances of being able to solve the algorithm first.
Mining LTC is pretty similar to mining BTC since they both use the same consensus mechanism – Proof of Work (PoW).
Things You Need to Start Mining Litecoin
Being a successful miner requires investing in your rig. However, if you just want to start right away, the entire process isn’t that difficult. Let’s take a look at some basic mining software and hardware requirements.
Mining Software
To be able to store LTC you mine, you’ll need a secure wallet. Every wallet comes with a unique password that’s referred to as a private key. You shouldn’t give it to anyone nor forget it, as there’s no “forget password” function with wallets. Once your private key is lost, you can say goodbye to your wallet and everything stored in it.
In addition, you’ll need the appropriate LTC mining software. If you buy an application-specific integrated circuit (ASIC) miner.
Mining Hardware
There are two major options that you can use to mine Litecoin: your device or an ASIC miner.
Suppose you decide to go with your own device. In this case, you will probably have to invest further to buy a rig (a customised PC) that consists of many graphics processing units (GPUs) in order to become a competitive miner. Standard PCs aren’t usually sufficient to keep your mining venture going.
Keep in mind also that the price of hardware often varies as it is dependent on overall demand and the current price of cryptocurrencies, although it’s not as volatile as cryptos. Either way, make sure to devote enough time to choosing the right rig before starting to mine.
If you don’t feel like building a rig, you can buy an ASIC miner, which is a computing device built especially for mining cryptocurrencies. As previously mentioned, it has pre-installed software, and it takes some very basic configuration before you can start mining LTC with it.
Mining on Your Own or Pool Mining?
Once your gear is set up, you can choose to mine LTC individually or become part of a mining pool.
If you decide to go solo, every reward you receive will go straight to your LTC wallet with minimal fees. However, no matter how great your rig is, you won’t be very competitive compared to the joint efforts of several miners such as in a mining pool.
A mining pool consists of several participants who are more likely to get rewarded as they provide more computational power. Each mining pool has its rules – including reward distribution, fees and more – which we suggest you read before you join a pool. Ultimately, you should try several different pools to see which one suits you best, providing you wish to join a mining pool in the first place.
Finally, there’s the option of cloud mining, with several companies offering to mine cryptos for you for a fee. However, this means you will have to pay the company, in which case the returns are often much lower than individual or mining pools. Also, you should bear in mind that there are many scam firms offering cloud mining, so make sure you research this option carefully beforehand if you decide to go with it.
Where to Mine and How to Store
As said previously, you’ll need to choose an appropriate software and install it to be able to mine crypto. The four most popular options are CGMiner, EasyMiner, BFGMiner and MultiMiner. All of them are free and work similarly, yet each is different, so we suggest you research them before selecting one.
Once you start receiving crypto, you’ll have to store them in a wallet, which can also come as software and hardware. Some of the best software options are Litecoin Core, Electrum and LiteVault. If you decide to have additional security, make sure to pick one of the Ledger and Trezor models.
Conclusion
To sum up, learning how to mine Litecoin isn’t that difficult, but you’ll still need a good basic understanding of the technology required for mining and will need to be prepared for the initial investment.
If that seems like too much for you, you can always buy Litecoin on one of the many LTC exchanges.