Litecoin mining is a process of using computers to do mathematical calculations, checking and verifying for double spend, and confirming transactions. Miners gather the transaction fees and are rewarded with the Litecoin currency for their effort.
How Does It Work:
Litecoin is based on the Scrypt algorithm and is rated as the most popular alternative to the bitcoin. It uses the Proof of Work(PoW) method. In this method, the miners compete with one another to complete transactions and are rewarded.
The miners check the transactions with the previously completed transactions that have been listed in the blockchain. to reconfirm there is no double spend. Miners then send the new blocks to the nodes who verify and transmit the transaction confirmation to the network. The rewards motivate the miners to keep contributing hash power to the network.
Litecoin was initiated by Charlie Lee. While copying the bitcoin in almost all parameters went on to improve the features in several ways. He set the target time to 2.5 minutes. It means Litecoin is 4 times faster than bitcoin. The block reward is designed to halve after every 8,40,000 blocks. Initially, 50 litecoins were released in each new block. The maximum supply is of 84,000,000 litecoins. Litecoin has been very consistent and has been in top 5 cryptocurrencies based on its market cap. The total Litecoin Market cap is $7.62 billion and is currently valued at $134.48.
Wallet:
To start litecoin mining, you must have a Litecoin wallet. This is where you will store all your rewards. Create a wallet address for others to send the money.
You must then download the mining software.
Litecoin Hardware:
Litecoin mining in your computer CPU cannot be as profitable as it was in the starting days. This is because there is several new hardware that is being manufactured exclusively to mine Litecoins. CPUs were soon overtaken by the graphics cards (GPU) which were more efficient in speed and consumed low power. Soon ASIC hardware was manufactured exclusively to mine all the digital coins that are based on the Scrypt algorithm. Though higher in price, the ASIC is more efficient than GPU. You may also build your own mining rig if you the time and technical skills.
Solo or Pool Mining:
This is an important decision you need to take that can have a say in how rewards flow into your wallet. Litecoin mining can be done in two ways. One is on your own where you will have the complete rewards. You must do all the mining and it can take considerable time to see the money flow to your wallet. Mining in a pool can yield faster returns and consistency. You will be sharing the rewards with other miners and will also pay a fee to the mining pool you join.
Mining in the Cloud:
You could do litecoin mining without the need to invest in any of the expensive hardware by moving to the cloud technology. You must have your computer and an internet connection for communication and subscribe with a cloud provider. Buy hash rate and start litecoin mining. The important thing here is to choose a reliable provider.
