LITECOIN — THE TWISTED, AND BETTER VERSION OF BITCOIN
Bitcoin was nothing short of a fantasy when it was launched. A decentralized cryptocurrency, untouched by finance monarchists, made for people by people — a truly democratic option to exchange money throughout the world, cheaply and speedily. Its creation certainly brought an intellectual change inside the banking sector. And now, we see how Bitcoin is being watched by some of the biggest corporate players for being a futuristic nexus in the global payment bazaar.
But even with all the kettledrums, Bitcoin has few setbacks of its own. For instance: the innovative digital currency takes around 10 minutes to confirm/generate a block. Also, miners would be able to mint only 21 million units of Bitcoin by the end of its time. Even though the drawbacks are handful, but there they are, ensuring no perfection in this seemingly perfect digital currency.
It clearly explains how Litecoin, another cryptocurrency that was launched three years after Bitcoin, was created out of the necessity to address such drawbacks. The brainchild of an ex-Googler Charles Lee, Litecoin was invented by twisting the Bitcoin’s open source code, the result of which made it a better real-time settlement currency than its predecessor — literally.
Litecoin vs Bitcoin
Just like Bitcoin, Litecoin is a decentralized peer-to-peer cryptocurrency, operated and controlled by none. Due to its number of user-centric benefits over Bitcoin, Litecoin soon became the second most traded cryptocurrency — a place which it holds even today. People also call it a “silver” to the gold Bitcoin, a factor that ensures it smooth adoption among merchants and users till this date.
As users have noted, the transaction confirmation time taken in case of Litecoin is four times faster than that of Bitcoin. Also, miners seem to prefer minting Litecoin due to its relatively less block generation time, i.e. 2.5 minutes which, in case of Bitcoin, is around 10 minutes.
Finally, litecoin uses S-Crypt algorithm: a rigid sequential memory function that was first perceived by Colin Percival. This function is said to have a significant advantage over the Bitcoin’s SHA256 algorithm, especially in regards to speedy and cost-effective mining techniques. An individual miner therefore could opt to mine Litecoin over Bitcoin, as it simply saves him money and time. [We will explain it further in a separate Litecoin mining section as follows]
|Total Coin Limit||21 Million||84 Million|
|Average Block Confirmation Time||10 Minutes||2.5 Minutes|
|Block Reward||Halves every 210,000 blocks||Halves every 840,000 blocks|
How to Mine Litecoin?
Generally, mining a S-crypt based cryptocurrency like Litecoin is no different than mining a SHA256 cryptocurrency Bitcoin. However, Bitcoin mining has become quite expensive in past few months, especially after the arrival of ASIC machines that ensures to solve blocks quickly, in addition to saving electricity consumption as well. But at the same time, ASICs come very costly, which ends up adding burden on miners’ initial investments.
At that point of time, Scrypt mining comes as a best alternative for miners as it can be done even by using a CPU or GPU machine. There are dedicated ASICs available for Scrypt coins as well, but their use have notably dropped because of poor performance issues. Scrypt however remains to a memory eating method, but its cryptocurrencies could still be mined by using a home PC with a powerful graphic card. Laptops with integrated graphic cards are not a good option to mine Litecoin, literally.
Setting Up a Litecoin Wallet
Before you actually start to mine Litecoins, there is one very important tool you must have to store them safely — a wallet. This wallet not only will store miners’ hard-earned money but will also prove to be useful in transferring Litecoin from one place to another. Downloading a Litecoin wallet is as simple as downloading a normal windows/MAC application. There are many independent and open-source Litecoin wallet software available in the market. They are:
- Litecoin QT (Available for Windows, Mac OS X, Android, Blackberry and GNU/Linux)
- Electrum Litecoin
Note: Sometimes, these wallets take ages to install on your personal computer for they have to download the entire blockchain before becoming usable to the clients. Please keep some patience when you download them.
Which Hardware to go for?
If you are not as rich as Tony Stark, there is a least chance of you using a specific mining hardware to mine Litecoin. Therefore, you will likely be relying on CPU, or CPU+GPU. We will though recommend you to try out some expensive GPU machines, as they tend to have a far better calculation solving features than the CPU machines. The more the processing power, the faster the mining is.
Don’t Be a Loner. Join a Mining Pool.
There are two method to mine Litecoin, or any other coin out there: Solo or Pool. As it sounds, Solo Mining restricts you in your own den, where the losses and the profits belong to you only. If you are a beginner with only a few bucks left in the pocket, going solo is definitely not the best idea as it will put all the financial pressure on you, and you only.
Conversely, pool mining will make you join a group of Litecoin miners where you will be require to contribute power from your end. Here, the chances of you all solving a single block will be greater. At the same time, the returns will be distributed among each and every associated miner, therefore reducing your income.
Litecoin Mining Software
After going through every basic step discussed above, all you will need in the end is a software to start mining Litecoin. The widely accessible ones available in the market are: CPUMINER and CGMINER. You can also use both the software in parallel to boost your block solving power.
Trade or Hold
The Litecoin you earn at the end of the day could either be held or sold in the trading market, at a good price. The Litecoin price however is seeing a very sharp decline since last year, and hints to move in parallel with Bitcoin price action now a day. It is therefore very important that you watch the fundamentals and technical aspects of Litecoin price before deciding to sell it in the market. Hold it only if you are a true believer. You can find many Litecoin exchanges on internet to sell your Litecoins.