How to Prepare Before Mining Litecoin?

Maureen Sander  2019-09-12 15:55:51

Litecoin is a kind of cryptocurrency like Bitcoin, though it uses some fundamentally different algorithms to process, called "Scrypt". Initially this made it easier for people with home computers to mine, but dedicated mining machines called ASICs can now process Scrypt coins like Litecoin, making it difficult to get in without a large investment. To reduce the cost of mining, we must focus on the preliminary work before mining.

  1. 1Understand the basics of cryptocurrency mining. Traditional currencies are printed to increase the amount of cash in circulation. Cryptocurrency such as Litecoin is generated by machines that solve complex algorithms. Whenever a "block" of algorithms is finished being processed, more currency is released into the market, usually as a reward to the miner that finished the block.
    • 2Consider alternatives to mining. Unless you're willing to drop thousands of dollars on a dedicated mining machine, or you don't pay for electricity and don't care about the lifespan of your home computer, there's very little reason to mine Litecoins instead of just purchasing them. The electricity costs of mining 24/7 often outweigh the value of anything you mine, especially if you're using a home computer, and running constantly puts a serious strain on your hardware components.
      • 3Purchase or build a mining computer ("rig"). In the cryptocurrency world, computers used to mine coins are called "rigs". In order to be remotely effective when mining Litecoins, you'll need a computer with at least two graphics cards. Ideally, you'll want four or five graphics cards attached in a custom setup. You can purchase these online, or you can try building your own, though this requires a fair amount more work than building a standard desktop computer.
        • 4Consider an ASIC Scrypt miner. These are dedicated mining machines that can greatly increase your mining power, but they can be expensive for effective ones. ASIC Scrypt miners can come in low-power models too, allowing you to save on electricity. One of the big benefits of a Scrypt miner is that you can easily change it to mine a more profitable coin as long it is Scrypt-based like Litecoin.
          • 5Estimate whether mining will be worth it. Once you've decided on some equipment, look up the market trends for Litecoin and make a projection on how much mining you will have to do to make up the cost of the equipment, power, and internet. If you can purchase the same number or more coins than you will earn mining, you're probably better off just buying the coins. For example, let's say that your equipment has a hash rate (processing power) of 200 KH/s, which is about the average for a high-end graphics card. The computer uses 600 watts of power to mine, and power costs $0.10/kWh. Assuming that you're mining solo, mining Litecoin at the current rate with the above setup will cost you $520 per year, and you would never break even.