Find out 3 ways you can mine Litecoin in this beginner’s guide.
However, you’ll need access to sufficient time and resources in order to make a profit, so keep reading to find out about the different methods available for mining Litecoin.
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What can I use to mine Litecoin?
Just like bitcoin, Litecoin uses a distributed ledger known as a blockchain. This ledger is managed by thousands of miners who use computing power to verify transactions and secure the network.
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.
Begin by choosing your setup
In the early days of Litecoin’s existence, it was possible to mine the currency using your computer’s CPU or video graphics card and make a profit. This is no longer the case.
While Litecoin mining isn’t as developed as the bitcoin mining industry, it’s now a much more resource-intensive process than it used to be. That said, there are three options for mining Litecoin:
- Solo mining
- Joining a mining pool
- Using a cloud mining service
If you want to go it alone, be aware that rather than using your CPU or graphics card to mine Litecoin, it’s now possible to buy specialized hardware designed for mining Scrypt-based cryptocurrencies. Known as ASIC (application-specific integrated circuit) miners, these are significantly more powerful than CPUs and GPUs and therefore have a much better chance of winning mining rewards.
You’ll need to be willing to invest in ASIC mining technology to have any chance of success mining Litecoin. Don’t forget that you’ll also need to buy a separate power supply cord and potentially also fans to prevent your equipment from overheating.
The biggest advantage of solo mining is that you don’t need to share mining rewards with anyone else. However, the downsides are that you’ll need to pay for the electricity required to run the equipment, and you may go for long periods of time without earning any block rewards.
Joining a mining pool
If you think there’s safety in numbers, you might want to consider joining a mining pool. These mining collectives allow you to join forces with other miners and put your combined computing power to work mining Litecoin.
This means that LTC rewards are shared amongst the group, so while you will only get a small share of the LTC mined, you’ll receive payouts much more frequently than if you’re mining on your own.
However, each mining pool is run a little differently to the next, so it’s important to research a pool before joining. You’ll need to consider:
- The size of the pool. The larger the pool, the greater the chances of earning LTC. Conversely, the more members there are in a mining pool, the smaller your share of LTC rewards.
- Fees. You’ll need to pay a fee for the privilege of joining a mining pool, so find out how much the fee is and how often it needs to be paid.
- Minimum payouts. Check what minimum threshold applies to balances before you’re allowed to transfer the LTC mined into a private wallet.
- History. How long has the pool been established? Is it a trusted and reputable operation?
Once you’ve found the right pool, follow the instructions provided to join and start mining.
Using a cloud mining service
If you want access to the latest mining hardware, but you don’t want to deal with the hassle and expense of buying and maintaining the necessary equipment, you may want to consider a cloud mining company. These providers, such as Genesis Mining and HashFlare, allow you to lease Litecoin mining equipment for a set period of time.
Leasing computing power is cheaper than setting up your own rig. It also means that you can avoid the issues associated with running your own mining operation, such as equipment maintenance, overheating risks and electricity usage.
However, there are downsides. These services obviously don’t come free, and you’ll need to be willing to surrender a certain level of control to the company you choose. There’s also the risk of falling victim to a scam cloud mining service, so it’s essential to thoroughly research any company before signing up.
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.
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 organizing 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 customize 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.
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Disclosure: At the time of this writing the author holds ADA, ICX, IOTA and XLM.