Just a few short years ago, the price of Bitcoin, one of the better-known cryptocurrencies, was more the $11,500 for a single unit. With the price of digital currency surging, fortunes are being made.
In fact, investors who put down $1,000 for Bitcoin in 2009 would have already made more than $40 million today.
For those of us still trying to wrap our heads around the rapidly expanding digital currency market, cryptocurrency is very similar to the money you have in your wallet today. Instead of a tangible coin or bill, however, you own a bit of information or a digital asset which can be exchanged for goods or services.
Litecoin is one of the stronger alternatives to Bitcoin, the top digital currency on the market. We’re going to show how to mine Litecoin, take a closer look at its advantages and how to get started earning money with it. The good news is new products on the market make it easy to get started.
Let’s start with a quick look at how cryptocurrency works.
The Advantages of Cryptocurrency.
With cryptocurrency, you cut out the banks and other institutions that facilitate and control transactions. This can save you money, eliminate fees, and help protect your privacy.
Instead of exchanging money or routing transaction information through a bank, digital currency is processed using a blockchain network.
The computers linked in the network must confirm the transaction before it is processed. This protects everyone involved in the transaction. The networked computers perform a complex mathematical problem to add a new block to the chain and initiate the transaction. The network then confirms the problem to confirm the transaction.
Once the transaction is complete, information is encoded in the blockchain. This creates an encrypted digital ledger that protects your money and privacy behind almost unbreakable electronic security. This series of complex mathematical problems and constant affirmation of transactions help protect your funds.
Cryptocurrency And Mining
Most of the coins used in cryptocurrency must be mined by creating new blocks in the blockchain. Since there is a limit to the number of blocks, this puts a limit on the currency and keeps the value high for each coin.
Computers are used to solve the mathematical equations for recent transactions. Users who solve the equation are typically awarded currency and are known as miners.
We’ll take a closer look at Litecoin and discover why it’s an excellent coin for investors.
A History Of Litecoin
is one of the oldest cryptocurrencies. It began trading in 2009, and today, there are more than 17 million bitcoins in existence. The problem is, it is also one of the slowest digital currencies. Transactions can take a long time, often more than 10 minutes, to process and be confirmed.
There have also been problems in the past with the security of bitcoin. In 2014, 850,000 Bitcoins, worth more than $450 million, were stolen from Mt. Gox, one of the largest Bitcoin exchanges.
Litecoin was developed as a logical alternative to Bitcoin. It offers faster transactions and more security than Bitcoin and is a less expensive alternative. Litecoin is an open-source, peer-to-peer digital currency using MIT/X11 licenses. Since it is based on an open-source cryptographic system, there is no management structure or authority to oversee transactions.
was created by Charlie Lee, an employee of Google and a former Engineering Director at Coinbase, a cryptocurrency exchange. His goal, and one that is prominently displayed on the Litecoin website, was to create a decentralized global payment tool separate from a central authority.
Many users and traders prefer Litecoin over Bitcoin. They believe the price of Litecoin is more sustainable than Bitcoin, and less susceptible to market fluctuation and speculation.
A Closer Look At Litecoin
Since Litecoin was developed from Bitcoin, it’s not surprising the two cryptocurrencies are very similar. In many ways, they are complementary currencies.
How Litecoin Works
Litecoin uses a modified Bitcoin-QT client for the desktop
application, known as the Litecoin Core. From the Litecoin website, you can download the Litecoin Core for Windows, Mac OS X, and Linux.
Litecoin core is a client created by the Litecoin team and downloads the Litecoin blockchain from the peer-to-peer network. This eliminates any outside involvement in the transaction.
By using the core code that made up Bitcoin, Lee was able to design Litecoin to eliminate some of the inefficiencies and problems with Bitcoin. He reduced the block generation time from 10 minutes with Bitcoin to 2.5 minutes with Litecoin.
This means Litecoin is four times faster at generating blocks than Bitcoin. It allows more Litecoins to be mined. Increased mining allows more Litecoins to be released. Litecoin has the potential of generating 84 million coins, where Bitcoin has a limit of 21 million.
Another change Lee made with Litecoin was in the hashing, or proof-of-work, algorithm, which helps protect the currency. Litecoin uses scrypt, rather than SHA-256 used by Bitcoin.
This adds additional security to the currency.
A Few Things Before Learning How To Mine Litecoins
Before you start mining, you may want to purchase Litecoins. You’ll need to purchase Litecoins from an exchange. Currently, Litecoin can be found on the following exchanges:
Keep in mind, not all cryptocurrency exchanges are created equal. Make sure to do your homework before selecting an exchange to make sure it is reputable and trustworthy.
You’ll also need a digital wallet to store your Litecoins, even the coins you earn through mining. There are several options for creating a wallet. You can download a wallet application to keep the Litecoins on your computer or
mobile device. This is often the safest option, especially if you use a wallet with a strong encryption.
You can also download your Litecoins to a physical piece of hardware, like a server. This can be a risk if the hardware is stolen, lost, or broken. The wallet will have private keys that can be used to send or receive coins.
While Litecoin is growing in popularity, it is still not as widely accepted by merchants and vendors as Bitcoin. The lower cost of transactions, and fast transaction time, make it more suitable to smaller transactions, or microtransactions, than other digital currencies.
How To Mine Litecoins
Mining Litecoins is one way to earn newly generated coins.
In mining, computers are tasked with solving the complex mathematical equation to confirm a transaction. When an answer is found, and a transaction confirmed, the user earns coin depending on the assistance provided.
This is a very processor-and-energy-heavy procedure. Many miners will join pools where their computing power is shared with others to increase the rewards.
You’ll need to download a Litecoin, or scrypt, mining tool to get started. The following are a few of the top tools available for Litecoin mining:
Bitcoin uses the SHA-256 proof-of-work algorithm, a very complex algorithm that requires pure processing power for the blockchain. Litecoin uses a different algorithm, scrypt, which is more memory intensive and requires high-speed RAM. This makes it more difficult for a single person or small group to dominate mining. More people can share the mining rewards with Litecoins.
If you’d like to get started, the following mining pools offer some of the best rewards for Litecoin:
The good news for new Litecoin miners is an update in the standard mining tools for Litecoin and other scrypt cryptocurrencies. Bitmain released an ASIC Scrypt miner in 2017, which increased the raw power of their Antminer L3+ units. To compete and succeed with Litecoin mining, you’ll need a high-end GPU or to purchase a Bitmain Antminer L3+.
Litecoin In The Future
Litecoin is a viable, and valuable, alternative to Bitcoin. Litecoin has some powerful advantages:
While there is always a risk investing in cryptocurrency mining, Litecoin is one of the stronger and better alternatives to Bitcoin, making it a great coin to start mining today.