To start with, it is important to understand what Litecoin Mining is.
What is Litecoin Mining?
Litecoin Mining is the process of discovering the next block’s hash that fulfills certain requirements. A mining machine, which could either be an ASIC or a series of graphic cards (GPU) is used to test hashes of the block as well as its transactions against a target.
Litecoin uses the Scrypt mining algorithm and frankly speaking, mining Litecoin can also be referred to as Scrypt mining. This makes it very different from Bitcoin mining.
Scrypt is a faster and simpler algorithm for hashing, or calculating blocks. Originally, scrypt was introduced to protect Litecoin against specialized ASIC machines. However, after some times, some processors were developed to produce Scrypt hashes more efficiently. Till date, mining Litecoin is still possible with GPU devices, but it will yield very lower potential rewards.
Litecoin Mining does not operate as a system with assured results. Rather, litecoin miners compete to “discover” the next block in a blockchain. Any miner who discovers the complex mathematical solution that is needed for every block gets a reward. The present reward for discovers the solution is 25 Litecoin. This reward halves every four years and as at the time of this writing, it will halve in about two years’ time – 764 days to be precise.
Blocks on the Litecoin blockchain are calculated every 2 minutes 30 seconds. This means that a miner has a chance of discovering a block every 2 minutes 30 seconds, while competing with other miners.
At present, more than 60 percent of all available Litecoin have been calculated. And the Litecoin network is planned to produce only 84 million Litecoin.
Although Litecoin mining is considered less profitable compared to other cryptocurrencies, yet users may engage in mining Litecoin for just personal reason or for investment purpose. Since, there is no maximum number of blocks, when all the coins have been discovered, the mining and adding of new blocks would commence.
Difficulty in Litecoin Mining
Difficulty is the term used in explaining the computation of new blocks in a blockchain. The difficulty describes the type of target hash that the next block must produce. The right hash begins with a certain amount of zero characters. The more the zero characters, the higher the difficulty, as finding the right number is a very serious matter.
Difficulty is one of the factors for calculating mining profitability. When more miners join in, difficulty rises. When miners move out, difficulty decreases.
How to Start Litecoin Mining
In order to become a Litecoin miner, you need to buy a Litecoin mining machine, which could either be a graphic card units or the recently built Scrypt ASIC. However, the most effective machine presently available is the Bitmain Antminer L3+, which was designed to work with the Litecoin algorithm.
After this, get a place to store your Litecoin rewards. The best way to go about this is by downloading the official Litecoin wallet from their website.
Obtain a public key from your wallet and send this to either mining pools or Litecoin mining software to receive your Litecoin payment. In case you are setting up a wallet for the first time, it may take a while to synchronize, it can also display a message that “you are more than 5 years behind on the network” – never mind. It is advisable that you encrypt your wallet from the beginning.
It is recommended by the Litecoin community that new Litecoin miners do not join the largest mining pools, this is because it does not assure higher or faster rewards.
To read more about Litecoin mining, read this article