Litecoin Mining Hardware
mining is done by specialized computers and hardware.
It serves two main purposes:
1) It secures the network and verifies transactions.
2) New litecoins are paid out as a reward to miners.
How Litecoin Mining Works
The Litecoin mining industry is less developed than Bitcoinís.
ASICsópowerful computers designed to solve Bitcoinís proof of work functionóare available for litecoin but difficult to purchase.
Because Litecoin uses a different proof of work function Bitcoin miners
cannot mine litecoins.
Itís possible, for example, to buy a Bitcoin Antminer S7 ASIC on Amazon
No such miners are available for Litecoin.The best Litecoin mining hardware available for purchase are graphic cards
, but they are not profitable.
If you are serious about mining litecoins, one option is to simply mine bitcoins with hardware like the Antminer S7
and convert the earned bitcoins to litecoin.
So, how does Litecoin mining secure the network?What is the Blockchain?
Like Bitcoin mining, Litecoin uses proof-of-work which makes mining a costly process in terms of both time and energy.
In order to send litecoins, transactions must be included in a block.
Litecoin miners then verify these transactions through proof-of-work.
The miners check incoming transactions against previous transactions on the blockchain.
If no double-spends are detected, the miners create a block with new transactions and add it to Litecoinís existing blockchain.Each new block is then sent to nodes on the network.
The nodes use the minersí work to continue to verify and transmit transactions across the network.
As mentioned earlier, Litecoin mining requires vast amounts of time and electricity, which isnít cheap.
The block reward is paid to miners for each block mined, which provides an incentive for miners to contribute their hashing power to the network.
What is Litecoin Mining Difficulty?
The Litecoin blockchain is a public ledger of all Litecoin transactions.
Unlike traditional payment systems like PayPal, Litecoin is decentralized and distributed.
Its public blockchain can be independently verified by anyone.
No old transactions can be erased, and, likewise, no counterfeit or fraud transactions can be created without network consensus.
Any attempt to change network rules would create a fork in the blockchain.
Litecoin Mining Profitability
One of the main advantages with cryptocurrencies is that the currency supply can be programmed and distributed at selected intervals.
This differs from gold, silver, and other commodities, which often see mining companies mine at faster rates if price increases.
The Litecoin mining difficulty is perhaps one of Litecoinís most important features.
It is an algorithm that is updated based on total network hashing power to ensure that Litecoin blocks are generated on average every 2.5 minutes.
Imagine this scenario: gold prices rise from $1,200 per ounce to $2,000 per ounce.
The increased price would cause gold miners to increase production, and may even push entrepreneurs to create new gold mining businesses. The $800 increase could create so much new supply that the price ends up dropping again.
Cryptocurrencies like Litecoin are different. No price rise can cause an increase in the rate at which litecoins are mined.
A sudden increase in Litecoinís price would likely cause more miners to point hash power at the network.
Unlike gold, however, Litecoinís difficulty ensures that the new hash power would simply be balanced with a rise in the difficulty of the proof-of-work algorithm.
The difficulty is adjusted every 2016 blocks, which is about 3.5 days.
Litecoin Block Reward
You can use one of the many litecoin mining calculators
to determine the potential profitability of hardware.
Litecoin mining profitability will depend on the price of litecoin, hash power of your hardware, electricity costs, and hardware efficiency.
Litecoinís creator, Charlie Lee, essentially copied Bitcoin but change a few parameters.
Lee wanted faster confirmations, so he set Litecoinís block target time to 2.5 minutes instead of Bitcoinís ten.
Lee also designed the block reward so that it halves every 840,000 blocks. Originally, 50 litecoins were issued in each new block.
The block reward eventually becomes so small that there can only be 84,000,000 litecoins in existence.
There are many websites that track and estimate block reward halvings
Watch the video below for more information on Litecoinís block reward:
What is Litecoin?
Want to learn how to mine litecoins?
First, mining litecoins is done via scrypt instead of SHA256.
To get started mining litecoins you could get a 70KHs litecoin miner
for about $100 or a 30MHs litecoin miner
for about $285.
Learn how to buy Litecoin with USD; with EUR; with RUR; and with BTC or practically every currency in the world.Finding the easiest way to buy Litecoin, minding the nature of cryptocurrencies and methods of converting them.
If you exchange your currency into cryptocurrency then it becomes extremely easy to then diversify and trade other forms of cryptocurrency.