Litecoin is among the best alternatives to Bitcoin, as it works almost in the similar way as its predecessor and can be used for online transactions. Litecoin is decentralized and peer-to-peer, which means that no single government or entity can have complete control over it. The two main differences between Litecoin and Bitcoin are that the former works on a different hashing algorithm and has faster confirmations. Just like any other cryptocurrency, Litecoin doesn’t deal in any physical currencies, and has its own unit, called LTC or Litecoin. As the digital currency industry has grown by leaps and bounds, there are many trading platforms available where you can buy and sell Litecoin for traditional money.
How the Litecoin Mining Process Works
Similar to Bitcoin, Litecoin mining requires powerful, specialized hardware. The process serves two important purposes: The first is that it verifies all the transactions and secures the network, and the other is that miners get a reward when new Litecoins are mined.
Before you start mining Litecoin, you should know how the network is secured during the process. The miners are required to include transactions in a block, which then verifies them with the help of proof-of-work. They can crosscheck the new transactions by referencing them with preceding transactions on the blockchain. If there are no discrepancies, the miners can make a different block for those transactions and then add that block to the existing block of the Litecoin. The newly created block is sent to the network’s nodes that use the work of the miners to continue validating and making transactions.
However, the entire process requires massive amount of electricity and time, which incurs a lot of money. For each block mined, miners receive the block reward, providing great incentives to them for dedicating their hashing power to the Litecoin’s network.
What Hardware is Used for Litecoin Mining
Since the Litecoin industry still lacks dedicated technology, mining this cryptocurrency can be a bit costly and difficult. Bitcoin mining is done through ASICs, which are high configuration computers specifically designed to handle proof-of-work function of Bitcoin. These computers are now being made available for Litecoin mining as well, but they are difficult to purchase. This is because Litecoin has a different proof-of-work function, and hence slight modifications are required to shift ASICs to mining Litecoin.
Aside from ASICs, there are two other ways to mine Litecoin: through CPUs and GPUs, which is related to graphics card. The latter offers superior performance than CPUs for the cryptographic calculations. If you have a powerful gaming computer, it can be used for mining Litecoins, but the rate will be far slower than what can be achieved with a machine, like ASIC.
How Profitable is Litecoin Mining
The profitability of Litecoin mining generally depends on your hardware’s hash power, the price of Litecoin, hardware efficiency, and electricity costs. You can calculate how much profit you can earn by mining Litecoin with the help of mining calculators and other tools available on the internet. They are geared towards determine the potential of your hardware for profitability, while taking into account the other factors.