How To Mine Litecoin In 2020 – 2021. What Has Changed
Litecoin mining is performing computational operations on the network of the payment system of the same name. The essence of these calculations is to generate a new block of transactions. There is a reward for each miner whose equipment took part in creating the block. The amount of payments directly depends on the work by a particular machine.
Litecoin mining is rapidly gaining popularity today because this cryptocurrency is gradually becoming more expensive. That’s why more and more people want to join this activity. However, newcomers face two obvious questions: where to start and how to mine the desired coins. Today we will try to answer them in as much detail as possible.
Crypto Mining Explanatory
Mining, in simple words, is a process during which machines solve mathematical puzzles. After that, new blocks of information are released. This brings in a certain amount of electronic money, which is deposited in a common piggy bank and registered in the public “ledger” (blockchain). Transactions with existing coins are also processed. They are checked on the computing devices of the P2P network participants and added to the blockchain.
During the mining process, the latest transactions are verified for authenticity and compiled into blocks. The participant who first solves this problem receives a reward. This approach was specifically conceived as an incentive for those who donate the computing power of their computers to keep the network running and mine new coins. For the first time, such a method was applied in the digital currency Bitcoin. And now, most of the other cryptocurrencies operate according to similar principles.
How Does Litecoin Mining Work?
Now that Litecoin has become popular, more and more people are investing their time to mine it. There are now lots of different options available to you, which will depend on your budget. To begin, let’s have a look at what solo mining is.
If you buy all the required equipment on your own and do not share any of the responsibilities with other people, it’s called solo mining.
The primary advantage of this is that you do not need to share the mining rewards with anyone else, meaning that you can make more money! Unlike pool mining (which I will explain below), you don’t need to pay any fees.
However, it is important to remember that you will need to invest in the mining equipment on your own and pay for all the required electricity on your own too. This can become expensive, and if you can’t afford to do it, you may need to consider another option.
The number of times you are successful in winning the mining reward can also be quite volatile, meaning that you could go a few days or even weeks without getting anything.
If you think that the costs of solo mining are too much of a risk, then it is worth considering joining a mining pool.
This is where you and other miners share your resources (such as computing power and electricity), which gives you more of a chance to get the block reward as you can generate more power! This also means that you will get more of a consistent income.
Think about it like a lottery. If you have one ticket out of 100,000, you will probably never win. If you do, the rewards are big, but it likely won’t happen!
But if you joined a mining pool with 50,000 other people, every time your pool won, you would get you to share based on your 1 ticket. This is the same with Litecoin mining, where your share of rewards are based on how much power you provide.
However, you sometimes need to pay a fee to join a mining pool, which you might find annoying! You will also have to share the reward out with the other miners instead of getting it all for yourself!
There are hundreds of different Litecoin mining pools to choose from, however, I have listed two of the most popular choices below.
Litecoin Mining Pool
Litecoin Mining Pool is one of the original pools and has been operating since 2011. One of the major benefits of Litecoin Mining Pool is that they don’t charge a fee!
They use a system called pay-per-share (PPS), so the amount of Litecoin rewards you get are based on the amount of power and electricity you contribute.
This service also provides free and instant payouts. For security, two-factor authentication is available.
Chinese-based Antpool is one of the largest Litecoin mining pools available. They also have pools for other cryptocurrencies, such as Bitcoin and Ethereum.
Although Antpool does not charge any fees to join, they keep all the transaction fees for any blocks that the pool mines. However, all the block rewards are shared.
The amount you receive is based on how much power you contribute, and they release their payments daily
Cloud LTC Mining
Now that we have covered the basic information about Litecoin, let’s move on to cloud mining.
Cloud mining is a process where you pay someone to rent a mining rig and its services. Usually, there are two parties involved in this process – the buyer and the owner.
Attention! A mining rig is a group of computers that are only set up to mine cryptocurrency! The more computers you have in your rig, the more you can mine!
Let’s say you, as a buyer, are looking for ways to profit from cryptocurrencies. Investing requires an extensive amount (at least to make a significant profit).
Hosts (people who own a cloud mining service) are large and corporations. It is very rare to find someone who offers cloud mining services.
Farm owners have many farms. A farm is an object that is filled with cryptocurrency mining rigs. If you want to close a deal with the owner, you rent out the installation on one farm for a specified time.
Cloud mining (including Litecoin cloud mining) is considered beneficial for several reasons. First, it’s very simple. All you have to do is buy the service online and wait. Some high-performance cloud mining hosts offer additional perks, i.e. 24/7 monitoring of the farm, so you can try without difficulty. Also, your job at this stage is complete – the owner will take care of the rest.
Cloud mining is also a win-win for the host. The owners are making good profits and can continue to develop their farms. Cryptocurrencies themselves benefit from this by remaining in a state of active demand – this strengthens their market position and attracts more attention.
There is a much higher supply and much lower demand for Litecoin than Bitcoin. This makes Litecoin cloud mining much easier and much more profitable than other cryptocurrencies.
What Litecoin Hardware Equipment?
As we have already said, in 2020-2021 there are only two methods left on how to earn litecoin – using an ASIC or a GPU farm. Let’s examine each case in more detail.
When mining a token through an ASIC, everything is extremely simple. It is enough to connect the equipment, configure it, join the pool, and start mining. The system will automatically adjust to the hardware used.
As for the question of how to mine Litecoin, everything is much more complicated here. Extremely powerful graphic cards from AMD and Nvidia are suitable for efficient mining. The minimum models are RX560 and GTX 1050 TI, respectively. There must be at least 6 such GPUs on the farm.
The price of a video card directly depends on its class and power. When buying six AMD RX560s, wait a very long time for the full payback, so you need several times more of such hardware.
The LTC network requires a lot of RAM for fast computation. Therefore, the minimum amount of RAM is 8 GB for the GDDR5 memory type. The preferred bus width is 256 bits.
Separately, it should be said about proper cooling and overclocking of the GPU. For a Litecoin miner, the best choice is a GPU with a good cooling system and the ability to increase power.
Attention! GPU rigs are very much inferior to ASICs in terms of efficiency. But even in this case, to gain profit, you need to have over one ASIC device.
What Litecoin Mining Software Needed?
As we mentioned earlier, if you are serious about Litecoin mining, the most viable piece of hardware for making a good profit is the Antminer L3 or L3+.
One of the great things about it is that it’s so easy to set up. When the product arrives, it comes with an installation file. You then have the option to either mine solo or join a mining pool. Here are a few helpful tips to get you started.
- Visit the BitMain (Antminer manufacturer) website and create an account.
- On the main hardware controller, press the IP Reporter button for 5 seconds (until you hear it beep).
- This will then display your IP address on your screen. Enter it into the BitMain website.
- That’s it! Now, all you need to do is enter the Litecoin wallet address you want your mined coins sent to!
If you want to join a mining pool, follow the below instructions.
- In your BitMain account, click on the Miner Configuration. Then click on General Settings.
- Now you need to enter the URL of your mining pool, your worker ID, and also your password
Now that you know how to set up your Litecoin mining hardware, let’s consider some risks.
Is Mining LTC a Good Option For You?
Before you buy hardware, it is really important to consider whether you are going to make any money. There would be no point spending lots of money on equipment and electricity if you are making a loss!
Remember how I told you earlier that you need to use your computing power to mine, and that the more you use, the more Litecoin rewards you will get? Well, this requires LOTS of electricity!
Believe me, once you mine, you will soon notice how expensive your energy bills become!
The cost of electricity is different depending on where you live. For example, lots of miners are in China because energy is so cheap. However, in places like the USA, electricity is costly.
You need to consider how much extra electricity you are going to use, and whether you are mining enough coins to make it worthwhile.
By visiting this link here, you can enter details of your equipment, electricity costs, and any mining fees, to calculate how much money you can make (or lose).
The difficulty of Each Block
You might remember how I told you that mining is like solving a really hard puzzle. The puzzle is so difficult that no human could solve it!
Well, over time, the difficulty of each puzzle gets harder and harder. When this happens, it will make it more difficult for your computer to get the mining reward and your profits will go down.
Reselling Your Hardware
If you bought a car, after a few years you might want to sell it to help pay for a new one, right? Sure, you will get less than what you originally paid, but you will still get something! It’s called the re-sell value.
The Litecoin hardware that you buy can only support this cryptocurrency. When the difficulty of each puzzle becomes too complex, your hardware might have no value.
When people started mining Litecoin in 2011, it was possible to buy GPUs to help do this. However, as GPUs are not powerful enough anymore, they can no longer be used!
I know how great it would be if you could mine lots of Litecoin’s with your new hardware, but what happens if the value of the coins goes down?
This is a really important thing to consider. For example, if you are mining and each Litecoin is worth $100, but then the price goes down to $50 the next day, you could make an enormous loss!
Don’t forget how volatile cryptocurrency can be. The prices can change massively overnight!
Consider Other Ways to get Litecoin
If you are thinking about mining to get more Litecoin, it could be easier just to buy it. This way, you won’t need to invest lots of money on costly equipment.
You could use that money to buy Litecoin instead! There are lots of exchange brokers that allow you to buy Litecoin with a credit or debit card.
The Main Risks
The crucial point of buying equipment to mine Litecoin is to make a profit. There would be no reason to do it if you were losing money instead!
This means that the risks can be quite high, especially if you have spent lots of money on hardware and you have a huge electricity bill to pay!
Always check the profit calculator that we listed above. If the value of Litecoin changes, or your electricity prices go up, enter the extra details into the calculator to make sure you can still make a profit.
So we finished the analysis of Litecoin mining in 2020-2021. Now everyone can choose a pool for litecoin mining, calculate the profit in the Litecoin calculator, and start mining coins. However, the computing power requirements are much greater than they were 5 years ago. Therefore, even a small rig of graphics processors or ASICs can make a profit.
Also, recently, LTC mining in the cloud has become in demand, when miners rent equipment on special platforms and receive passive income. However, not every service guarantees security, so there is a risk of running into a scam project and running out of money.
And now, let’s summarize. When mining “digital silver”, it is best to use ASIC farms. Video cards cannot generate large profits, so they should be left for mining other cryptocurrencies.