How To Mine Litecoin - Step-by-Step Guide
Litecoin mining involves using computational power at your disposal to perform complex operations to solve a mathematical problem and generate new coins. When miners verify transactions and add blocks of these on the main chain of a distributed ledger, they create a secure, immutable and tamper-proof record.
Miners get a reward for their efforts, for helping keep the network secure and decentralised. The reward is called a block reward and includes newly minted Litecoins and the attached transaction fees. Cryptocurrency mining is attracting a lot of attention. This article focuses on how to mine Litecoin.
Our Quick Guide to Mine Litecoin
Set up a Litecoin wallet
To start mining Litecoin (LTC), you need to first set up a Litecoin wallet. This allows you to have access to a secure and safe place to store the LTC coins you will mine. You can choose from several top options or go for an exchange wallet.
Join a Mining Pool
Litecoin mining has become increasingly complex for solo mining to be an advisable venture, especially if you have limited resources. Joining a pool allows you to contribute computing power and mine Litecoin as a single team with other miners, increasing chances of success. Individual miners then get a share of the reward, which is distributed proportionally to the percentage share of computing power.
Before you start mining Litecoin, you need to ensure the operation will be profitable. Do this by checking out your mining machine's hash rate output, power consumption and cooling needs. Also factor in the cost of electricity and the price of Litecoin. Also important is to find out any regulatory requirements or restrictions on crypto mining in your region before you begin.
Requirements – What do You Need to Start Mining Litecoin Today?
Mining can be resource-intensive and as such, you might do well to gather all the information you need before you start mining Litecoin. This will include things like what hardware is best for LTC mining, the software to choose, or what technical terms to get a grip on as you start. Get all these details and more below.
Popular Hardware and Mining Rigs for Litecoin
If you are going to mine Litecoin profitably in 2021, then you need the right hardware equipment. Initially, it was possible to do LTC mining just with your CPU (Central Processing Unit), and then it was the GPU (Graphics Processing Unit).
Things have changed though and today if you want to make money mining then the game-changer is the ASIC (Application-Specific Integrated Circuit). This mining hardware tool is now the most popular in Litecoin mining, and rightly so: it's purpose-built for mining and comes with incredible computational power and efficiency. The only problem you are likely to encounter is that while some hardware devices are moderately priced, many command top-tier prices.
There are several top ASIC rigs in the market you can choose from, with the ASIC miner you pick likely to depend on three factors:
Hash Rate: You need to check on the output of hashes per second for the device. The more power it packs the higher its success rate is likely to be. Check on efficiency as that relates to output versus energy consumption.
Price: ASIC miners are priced variously, and how much a device cost reflects mining capability and electricity use. Keep this in mind as you look to invest in a Litecoin ASIC miner.
Electricity: one of the considerations is to have a model that does not need too much power. For example, getting a low-power ASIC model means you can minimise electricity while maximising the ROI.
Efficiency: This is a key consideration as a highly efficient ASIC means it can solve complex puzzles much faster and at a low cost in terms of electricity. The best ASICs for LTC mining are therefore those with the highest efficiency rates.
With the above information at hand, here are three of the most popular and efficient ASICs for Litecoin mining:
1. Innosilicon A6+ LTCMaster
This is yet another top ASIC model for Litecoin mining. The A6+ LTCMaster is a hardware mining machine developed by Innosilicon and supports Litecoin's Scrypt algorithm. The 2019 model comes with an output of 2.2Gh/s in hash rate, with power consumption at 2100W and efficiency of 0.955j/Mh. The A6+ is quite pricey—it costs $1500 but comes with a PSU. Electricity cost is pegged at 0.12/kWh.
A6+ LTCMaster: Source: Innosilicon
If you are joining a pool, then A6+ LTCMaster supports top mining pools such as Poolin, Antpool, and Litecoinpool. What's more, you can also use this device to mine other cryptocurrencies, including Dogecoin (DOGE).
2. Antminer L3+
If you are looking for an efficient and proven LTC ASIC miner, then you might want to check out the Antminer L3+. Designed by Bitmain and released in 2017, the L3+ is one of the most powerful ASIC miners for Litecoin. This hardware machine packs 504MH/s of hash rate out of the box.
The Antminer L3+ has an easy-to-use interface that allows you to easily add your wallet address and configure your mining pool settings. You can also customise some settings or quickly upgrade to the latest firmware releases.
Antminer L3+: Source: Bitmain
Its modest price of $289 makes it affordable, similarly to the 2018 model Antminer L3++ that sports 580MH/s and has 4 chipboards and 288 chips.
The BW-L21 is another popular Litecoin ASIC miner manufactured by BW.com and released in January 2018. It has a hash rate of 550 MH/s, power consumption of 950W, and boasts a power efficiency of 1.727 J / MH/s. The ASIC type chip is a 28nm design, with each unit packs 144 chips and 4 hash boards.
BW-L21: Source: ASICMiner Value
The L21 is one of the easiest ASIC miners to set up, only that you would need access to a PC to complete the setup. After that, the machine will run automatically. The unit sold at $2500 out of the box, although you can get it as low as $300 from a reseller point.
You now have the hardware part checked out. What next? You are about to start mining, and that means checking out the Litecoin mining software aspect.
If your hardware mining equipment is an ASIC miner, you are likely to find the mining software pre-installed in the device. However, if you are planning on mining Litecoin using a graphics card (GPU mining), you will have to find and install the necessary software.
The first thing to do is research whatever options are available in the market, bearing in mind your hardware. Once you select one, download and install it to begin mining.
You can choose to get a desktop or mobile version, with the latter an app you can download and use on your PC. Some software products support mobile use and are available for Android and iOS devices. The thing to remember is that the mining software is what allows you to connect your wallet and mining pool to receive the block rewards. So as you select one option over another, ensure you only download software from reputable vendors or websites.
Which software people use to mine Litecoin
There are several mining softwares available for LTC and thus you might need to choose one based on your hardware and specific needs. However, here are the top 3 Litecoin mining software for ASIC mining today:
EasyMiner is an open-source mining software that supports Litecoin ASIC mining and works with minerd, cudaminer, cgminer, and ccminer. You can use Easyminer to connect to the stratum pool or go "solo" mode which allows you to choose your preferred mining pool.
Other than Windows, EasyMiner also supports Android devices and is seen as the best miner app for Litecoin.
CGMiner is one of the best Litecoin mining software that is available across platforms- Windows, Mac, Linux. The application supports pool mining and offers command-line access. You can handle aspects like monitoring mining machines for speed and temperature.
Awesome Miner is the software you need if you plan to run multiple mining rigs. It supports over 50 mining engines, including cgminer, bfgminer, xmrig, and sgminer. The software offers access to a robust centralised mining experience, with support for Litecoin mining as well as SHA-256 among other algorithms. It is preferred over other mining software because you can monitor mining operations, check status and temperature right from the dashboard.
Can I Use my Personal Computer to Mine Litecoin?
You could, technically. However, that would be an exercise in futility as you are likely never going to make any progress let alone earn anything worthwhile from it. This is because costs in electricity alone would be so prohibitive it would be worthless to do so. The other basic explanation for this is that Litecoin mining, though initially possible on CPUs, has become so complex and expensive that a personal computer just can't cut it anymore.
The introduction of ASIC miners changed the playing field, tilting it towards big mining farms as computational needs rose. Today, instead of a PC, the best chance you have of mining Litecoin is to get a mining rig and join a mining pool.
Technical Knowledge Required to Mine Litecoin
Here are a few technical terms you might need to know as you start to mine Litecoin.
- Mining rig: A hardware device or computer purpose-built for cryptocurrency mining.
- Block: A unit of the blockchain that includes a batch of verified transactions. When a miner finds a valid block, it is distributed or broadcast to the rest of the network and added to the larger chain for an immutable record.
- Block reward: This is the reward miners get in a Proof of Work network. It contains the newly minted coins (mining subsidy) and any attached transaction fees. Currently, Litecoin's block reward is 12.5 LTC.
- Hash: A hash is a function that takes any data and transforms it into a fixed output size. This output cannot easily be arrived at in reverse and thus highly secure.
- Hash rate: These are the hashes a miner can output per second, which is how much computing power a miner packs. The higher the hashes per second, the more powerful the Litecoin miner is.
- Mining fees: These are the network fees users pay to have their transactions added to a proposed block to be verified. Miners get mining or transaction fees as part of the block reward.
- Mining profitability: Profitability refers to returns from mining. It is calculated using hash rate, energy consumption, electricity (in kW/h) and Litecoin price. The returns are calculated on a daily, weekly, monthly, and annual basis and tell you how much money you can make based on the rate of reward.
Joining a Litecoin Mining Pool
Joining a mining pool is one of the steps that new miners take to increase their chances of becoming profitable in their operations.
A mining pool is a collection of miners who join up and form one entity. Together they "pool" their processing power to mine the cryptocurrency under an agreed framework of sharing the reward once they mine a new block.
This is how a new miner who might not have a chance competing against the larger mining farms can earn a share of the block reward and potentially go on to break even and become profitable. When looking to select a mining pool, there are a few considerations to put in mind as these can greatly impact how you benefit from the pool.
- Find out if the mining pool supports the hardware you intend to use. You are likely to learn that most pools support ASICs and not GPU Litecoin mining.
- How much is the fee? This is a critical consideration as fees can be anywhere from 0% to 3%, with some pools charging more.
- Security. It's important to establish how secure the pool is, including how it safeguards against potential DDoS attacks.
- Payment threshold. What's the minimum contribution in terms of computing power and what is the minimum payout?
Cloud mining pools are another possible avenue to start mining Litecoin. These do not require you to set up hardware but allow you to rent a hash rate at a set fee and use it to mine.
What are the advantages and disadvantages of using a Litecoin mining pool?
- Fewer costs involved (no hardware, electricity, and maintenance).
- No time needed to monitor equipment.
- Faster in terms of starting to mine LTC.
- You earn depending on what you invest.
- Risk of scams.
- Profits can be too small as the pool can have too many miners sharing the reward.
How Profitable is Mining Litecoin?
Litecoin mining can be very profitable if done with the correct equipment, especially as the price of LTC surges and electricity costs fall in many mining regions. Calculating the profitability of Litecoin mining is among the first things to consider as you search for a miner or look to set up operations.
So the cost of the hardware, electricity, and price of Litecoin are three major factors in determining profitability. To calculate how profitable it is to mine LTC at present, consider these:
- Hardware hash power
- Equipment's power consumption, measured in Watts (W)
- Electricity costs are taken as X dollars per kilowatt-hour (kWh)
- Pool fee if applicable
- Litecoin price
Let's take the example of the Innosilicon A6+ that costs $1,500. The miner has a hash rate of 2.2 Gigahashes per second and power consumption of 2100W. If we take electricity costs to be $0.05/kWh, the 24-hour revenue is $11.89 with LTC price at $229 and earned reward at 0.05179031 litecoins. If we subtract electricity costs of $2.52 (24h), then daily profit is $9.37 and ROI would take 161 days.
These figures will vary and that's why you need to be accurate and recalculate as prices change or electricity costs fall/rise. Use any of the freely available profitability calculators to do this.
I've Already Mined Litecoin, What Now?
Getting this far is an achievement. It's not easy to achieve this in such a competitive market. But now that you have your first LTC, there are two steps you can take: either sell it for immediate profit or hodl for more gains at a later date.
If you decide to sell your mined Litecoin, you can do so via a cryptocurrency exchange or peer-to-peer platform. If you choose the former, you need an account. Once set, you can easily sell to interested buyers. Remember to factor in exchange fees as that can eat into the profit.
A P2P network is a marketplace where you directly deal with a potential buyer. Keep in mind security as you look to settle with the interested party.
Saving Litecoin Coins in a Secure Wallet for the Long Run
'Hodl' is a popular investment strategy in cryptocurrency and involves holding your litecoins in a secure wallet for long-term gains. This means you don't sell no matter the price action in the short term. You have to store your LTC in a secure wallet, most probably a good hardware wallet. Here are some of the top selections in the market today.
Frequently Asked Questions
2.5 minutes. This is the approximate time it takes to mine a block of transactions on the Litecoin network. This is called the block generation time and is set at 2.5 minutes for Litecoin. Bitcoin's is 10 minutes.
ASICs, which are specifically designed for mining, are the best Litecoin miners.
Litecoin miners receive 12.5 LTC as a block reward. The reward reduces every four years during halving and the next one is expected in August 2023.
There are 17,492,896 litecoins left to mine. This number keeps reducing, and you can calculate that by taking the maximum supply of 84,000,000 and subtracting the circulating supply.
No. You could in the early days, but that's technically futile today given the need for massive computing power. High-end GPUs and ASICs are your best bet for solo mining or join a mining pool.
To start mining Litecoin you need mining equipment (hardware), software, a wallet and constant supply of electricity. There are other considerations to make, but these are the main requirements.
Can I use my Litecoin ASIC miner to mine other coins other than LTC? Yes. Some miners support several mining algorithms and are thus suitable for mining any of the relevant coins.
Most countries have stipulated that cryptocurrency mining generates income and therefore is taxable. If you also sell your LTC, it generates a taxable event in some countries. The best way is to find out what your country's tax authorities say about crypto activities.