How to Mine Litecoin • Crypto Mining Guide • Benzinga
Mining is a fundamental incentive to get people to secure a blockchain. Thanks to the Proof of Work (PoW) consensus mechanism, sufficient decentralization can be achieved by some chains.
Miners are incentivized to participate in a decentralized method of transaction processing for the native blockchain token to contribute work against how centralized entities operate using proprietary data centers.
How to mine Litecoin
Litecoin (LTC) mining has been around since the network’s genesis block was mined in October 2011, more than two years after the Bitcoin genesis block was mined. Although the utility of the network has been overtaken by newer blockchains, it is still one of the most profitable coins to mine.
Graphics processing unit (GPU) card and application-specific integrated circuit (ASIC) miners are two of the most common ways to mine LTC. Although graphics cards can be profitable, they generally require more effort than ASIC miners to operate and are probably less profitable. ASIC miners are dedicated mining machines that can be profitable in the long run with cheap or even average electricity tariffs.
If you are unable to arrange a personal living space for these noisy and hot computers, you have alternatives. An alternative is colocation, where a third party hosts your miner in a facility and you pay the costs.
These hosts sound great in theory; however, sites with low-cost electricity have already been reserved for a few years, and higher cost electrical installations are not profitable in the long term. You can explore alternatives that allow you to start mining with a personal computer to better understand how mining works to increase your sense of comfort.
If you are betting on a Litecoin bull market, these machines will likely increase in value as long as the new ASIC innovation does not go far beyond the bull market.
Step 1: Buy hash power.
Buying hash power can mean buying other people’s mining power through marketplaces, but profit margins are usually higher when you buy hash power hardware from your personal property or from a colocation site. Buying hash power from someone else’s miner is usually not profitable, but can be done through websites such as Kryptex or Nicehash.
Websites like Compass Mining and Musk Miners offer both hardware and colocation. Buying the hardware and self-storing will likely yield a higher return, if that’s possible for you.
Step 2: Join a mining pool.
You can tap into a number of great pool options such as litecoinpool and f2pool. Nicehash also has a cool feature where it picks the most profitable pools and takes 1% of the winnings but rewards you with BTC.
The operation of a swimming pool is simple. An individual miner is rewarded in Bitcoin for processing the next block. A new block is mined on the Bitcoin network typically every ten minutes, and the payout is around 3.5 BTC, although this rate decreases over time. A mining pool comes into play trying to dominate individual miners and pay all contributors for their efforts.
While it’s possible that an individual miner could mine a block and be rewarded, mining the Scrypt algorithm without a pool means you’re competing with every other hash power in the world, so it’s quite a gamble . Pools are the surefire way to be rewarded consistently, and they are fundamental in crypto mining.
Step 3: Watch the markets and withdraw to your cryptocurrency wallet.
Mining pools are not optimal for securely storing your crypto, so it must be withdrawn regularly depending on transaction fees. Ledger hardware wallets can be used for your withdrawals, but many centralized exchanges — Coinbase Global Inc. (NASDAQ: COIN), FTX, Gemini — themselves are tightening security and cold storage. They are great for trading cryptocurrencies, but if you plan to keep your coins mined natively, you can find more secure methods, including Trust Wallet, Coinbase Wallet, and other options. These wallets give you a usually 16-word seed phrase to access your wallet.
Although the withdrawal can be made at any time and is not really dependent on market conditions, the conversion of mined coins into other cryptos or fiat currencies depends on market conditions.
Most Profitable Litecoin Miners
Among the many Litecoin ASIC miners, the Bitmain Antminer L7 and Goldshell Mini-DOGE series are the most profitable. Generally speaking, the best depreciation rate – the return on investment (ROI) – is built into the prices of machines in the secondary markets. It is difficult to find ASIC miners sold in primary markets because often the manufacturers are wholesalers.
The best place to get comfortable and accustomed to how mining works is with a personal computer. Although the profitability of a personal computer is debatable (unless the electricity is free), it is a great place to see how crypto can be generated and in your possession without the huge upfront cost of ASIC miners. .
The Bitmain Antminer L7
Probably the most profitable of all the miners, the Antminer L7 has one of the highest initial costs. For just over $20,000, these miners will fetch over $50 a day with no electricity included. These miners aren’t as simple as plugging in anywhere and letting them run. They are noisy, hot and power-hungry machines that are usually a nuisance.
Like most ASIC miners, this machine’s payback is 400 days regardless of electricity prices, increasing mining difficulty and price fluctuations. This miner is not a short term investment.
The Goldshell Mini-DOGE Series
This miner costs less than $800 for the Pro series and the regular series if purchased from the retailer. Both the standard and Pro versions fetch just over $1 a day, with the Pro series slightly ahead of the standard model. Nevertheless, they are equally profitable and both are excellent miners.
When it comes to convenience in ASIC mining, Goldshell’s Mini-DOGE series miners are hard to beat. If you manage to get one at retail price on the Goldshell website, that might also be worth it.
What does convenience mean in mining? While ASIC miners usually need to be kept away from people due to noise and heat, this miner is quiet and small enough to be placed in or near a living space. It’s a great first miner to get and run in general.
What is the best cryptocurrency to mine?
The profitability of mining largely depends on the token price and the difficulty of the network. The more competition there is in the network, the less profitable it is.
Four major crypto-mining algorithms dominate the mining landscape – SHA-256, Ethash, Scrypt, and Kadena.
SHA-256 is Bitcoin’s mining algorithm and can be quite profitable. Bitcoin mining is generally considered safe and therefore less profitable due to the rampant and growing competition for hashing power. Bitcoin is considered a store of value and almost synonymous with cryptocurrency to the public.
Ethash is Ethereum’s PoW algorithm, but as the Ethereum network is working on its merger and transitioning to proof-of-stake (PoS), the Ethash algorithm will not be as profitable once the merger is complete. For this risk and uncertainty, an ASIC miner might be a risky purchase, but having a graphics card in an Ether mining computer seems risk-adjacent for now.
Scrypt is a profitable and long-standing mining algorithm with good tokens including Dogecoin and Litecoin. It is probably more profitable than Bitcoin’s SHA-256, but its price is significantly more dependent on these alternative coins. See how the market is moving and if tokens with minimal or no utility loss are things to watch.
The Kadena algorithm leverages Kadena, which is a PoW network with a structure similar to Ethereum but trying to improve its downfalls. It’s very profitable right now due to skyrocketing prices and the difficulty of mining which hasn’t quite caught up to it yet. Mining profitability will likely drop significantly soon, but it could still be a good investment for mining while it catches up to other mining algorithms.
Should you mine cryptocurrency?
Cryptocurrency mining is not a get-rich-quick scheme. Mining is arguably more profitable than investing in cryptocurrency, as it is similar to a Dollar Average Cost (DCA) structure. Once the machine is paid, everything is upside down.
Buying crypto works well, especially with high-yield PoS networks, but mining can be a fun and convenient way to keep a network afloat, and it’s generally more profitable for large-cap coins. like Ethereum than staking.
Where to buy Litecoin and other cryptocurrencies
Buying crypto from various exchanges is another great way to invest in cryptocurrencies like Litecoin. If you think Litecoin has potential and room for growth or if you are going to convert mined coins, centralized exchanges make the process quite simple. Gemini, eToro, and Webull offer a streamlined process for funding your crypto purchases.