While mining Bitcoin can be extremely costly to start up these days, other digital assets require more reasonable startup investment. Litecoin offers one of the many alternatives to mining cryptocurrency without needing a huge investment into hardware to get started. The Litecoin asset actually uses a different mining protocol than Bitcoin, even though the asset was created in the shadow of BTC. With that being said, users can expect a reasonable entry if they are looking to start mining Litecoin in 2019.
To properly start mining Litecoin, it’s imperative that you understand the digital assets and mining in general. For this, check out the other blog post we have with more information about the basics of cryptocurrency mining.
Litecoin Mining Vs. Bitcoin Mining
Although created in the image of Bitcoin, Litecoin creator Charlie Lee hoped to establish a new protocol which could more efficiently be utilized for smaller sized transactions compared to the Bitcoin network. The asset has a smaller block size time which was specifically designed at the onset of Litecoin. To make this possible, the two networks offer different mining protocols with Litecoin using Scrypt mining and Bitcoin utilizing SHA-256 algorithm.
Some have referred to Bitcoin as the gold of cryptocurrency and Litecoin as silver, especially when launched. Although over the years, this has changed as other assets bring in more value such as Ethereum or Ripple both having higher market caps than Litecoin today.
In closing, Investopedia suggests the greater number of maximum Litecoins could lead the asset to see a psychological advantage in the markets over Bitcoin. This is an interesting theory and although only time will tell, one this is certain- those interested in mining can have easier entry to the market with Litcoin compared to its big brother asset, Bitcoin.
Litecoin Mining Requirements
The basic requirements for mining Litecoin will differ fairly significantly from the sophisticated solution Bitcoin miners have opted for with Application-Specific Integrated Circuits (ASICs). Due to Litecoin’s Scrypt algorithm, the asset remains more accessible to users interested in mining cryptocurrency without spending a huge amount of money on ASICs which can be expensive. To this point, users can use a CPU or GPU when mining Litecoin.
Depending upon if you choose to use a GPU or CPU, you will need to download the proper software for mining Litecoin. Remember to always keep security in mind when doing so, especially when dealing with financial assets like Litecoin.
Furthermore, you will want to be extra careful when inputting your mining settings as it can be easy to set up the system configuration improperly. Be sure to follow the setup guide so that you are not mining on behalf of another worker in your mining pool. When in doubt, run tests and never assume things are operating properly until you can confirm so with proper transactions.
Finally, decide if you want to mine by yourself or join a pool. There are a good half dozen Litecoin mining pools which are popular. Including Antpool, LitecoinPool.org, LTC.Top, F2Pool, and BW.com among others. The distribution of Litecoin has a fairly heavy top with the top 4 companies holding at least 90% of mining power. With that said, natural forces should prevent a 51% attack from any pool- although sometimes malicious entities can taint parties operating these large pools. Bottom line, be sure to stay up to date with the distribution of Litecoin mining power if you decide to mine this former ‘silver’ asset of the digital world.
Recent Litecoin Halving
An interesting phenomenon which happens with cryptocurrency assets is known as the halving. Litecoin recently went through a having. As of August 5th, 2019, Litecoin has started to reduce its miner reward by half.
As these digital assets, such as Litecoin are distributed, they have to slow this distribution process down over time to eventually hit the set limit for a number of assets to be created. Rather than do this all at once, when hitting the cap, the assets are designed to slowly release fewer and fewer rewards.
For Litecoin, this means there will be only 7,200 LTC entering the supply each block instead of the previous number of 14,400 LTC over a 24-hour period.
This can be a dramatic change for those looking to get into Litecoin mining, but this takes place only every 4 years.
If interest for mining falls too low now that the asset has stopped paying out as much to miners, the Litecoin network may go through a difficulty adjustment which will allow for the operation of the network to better reflect the market demand.