Instead, it serves the purpose of efficiently ensuring that the data has not been tampered with. Change even one number in an arbitrarily long string of transactions, and the hash will come out unrecognizably different.
Since every block contains the previous block's hash, the network can know instantly if someone has tried to insert a bogus transaction anywhere into the ledger, without having to comb through it in its entirety every 2. The mining process illustrated. This image comes from our bitcoin infographic, but litecoin miners follow the same process. Why must miners run these hash functions over and over again, if doing it once — a near-instantaneous process for a modern computer — would do the trick?
The reason is that, by harnessing a lot of hash power, an attacker could spend some coins, then pile a huge number of spam transactions on top of it — ones that do not reference the attacker's original spend. In this way they could spend their coins and have them too; this is known as a double-spend attack. By requiring the network to plug through millions or billions of hash functions, the blockchain generates so much "work" that undoing it or overwhelming it would be too expensive.
Since a given set of data only generates one hash output, miners must append meaningless numbers known as nonces to the end and run the function again. Mining is competitive. The first miner to generate a hash that is smaller than a target set by the network "finds" the new block, receives the block reward — currently Since there is no way to know what nonce will generate a below-target hash, miners' results are subject to two factors: luck, which is outside of their control; and computing power, which can be bought or stolen.
To maximize their computing power, miners have developed specialized gear to plow through hash functions as fast as possible. They have assembled enormous collections of these machines, pooled their resources, and concentrated in places where electricity is cheap, so as to maximize profits.
These trends have led to the increasing centralization and professionalization of mining. In October Charlie Lee, then a software engineer at Google, announced the creation of litecoin, a clone of bitcoin with modifications intended to help it scale more effectively. A little over seven years later, the cryptocurrency has demonstrated the kind of staying power other early bitcoin alternatives couldn't. With a new block mined every 2. Litecoin can hardly claim to have scaled the way that centralized payment systems like Visa have, but Lee's claim to have created the "silver to Bitcoin's gold" has some merit to it.
One of Lee's initial claims has not held up, however: the ability to mine litecoin using a computer's central processing unit CPU. Lee adopted the Scrypt hash function from Tenebrix, an early altcoin, instead of using bitcoin's SHA function. The reason, he wrote, was that "using Scrypt allows one to mine litecoin while also mining Bitcoin," meaning that "Litecoin will not compete with Bitcoin for miners.
In the early days, even bitcoin could be mined using a CPU. By , the competition had ramped up, and the only way to mine bitcoin profitably was using a graphics processing unit GPU. Soon GPUs were being used to mine litecoin as well. Older ASICs may not be competitive, making it hard to turn a profit. Note that Scrypt ASICs can also be used to mine other coins based on the same algorithm; you can choose the most profitable coin to mine based on relative price and difficulty a parameter the network sets to make sure a new block is mined every 2.
It's a way to get exposure to the process, to familiarize yourself with the vocabulary and concepts, and to avoid dropping thousands of dollars on a pursuit you find out doesn't interested you. And if you're an altruist, offering your tiny sliver of hash-power to the network is a way to reduce its centralization. If you are ASIC mining, your hardware likely comes pre-installed with mining software.
A software package could contain malware. You should also watch out for other tricky, if not outright malicious, behavior. It's easy enough to find yourself accidentally mining on behalf of the software's developer because their system configures their worker as the default. GUI versions of mining software are not always available, so you may have to use the command line.
The software's provider and your pool see next section should explain the necessary steps. Don't follow instructions from sources you don't trust: it's easy to wreak havoc on your system using the command line, and tricking the inexperienced into doing so is some people's idea of a good time.
Once you've decided what equipment you'll use to mine, you need to decide how to mine: solo or in a pool. Mining alone, you risk going long periods of time without finding a block.
When you do find a block mining solo, however, you keep it all — the whole 25 litecoin plus fees. To be clear, this tradeoff exists only if you have a lot of hash power multiple ASICs. Pool mining, in which large numbers of miners combine and distribute the proceeds according to the hash power contributed, is still subject to the vagaries of chance: your pool might find three blocks out of 10, then wait for blocks to find another one.
Even so, your earnings are almost certain to be more steady with a pool; the tradeoff is that you only earn a small cut of each block the pool finds.
Another aspect of pools to consider is security. Some pools have excellent reputations, but others fall on the spectrum from questionably managed to outright scams. Conduct thorough research and choose the software that is easy to use, highly secure, and viable for you. Now that you are aware of what it is all about, you may still wonder why opt for LTC mining?
Charlie Lee, the computer scientist who created Litecoin, introduced this very currency to overcome the limitations of its counterpart — Bitcoin. As a result, he developed LTC, which:. The maximum number of LTC emission is 84 million, while for Bitcoin, it is just 21 million. That and multiple other features make Litecoin a more profitable option than Bitcoin and other digital currencies.
All things aside, Litecoin is one of the top 10 cryptocurrencies to invest in right now. Moreover, Litecoin mining is quite profitable, given you have the right set of hardware and software set up.
It had a profitability rate of 5. Source: Coin Price Forecast. Litecoin mining can prove to be highly profitable, but only if you choose the right equipment software and hardware and method. Still, with the ongoing hash rate of around Compared to Litecoin solo mining, pool mining offers a steadier income and breaks down losses.
On the other hand, solo mining allows you to enjoy greater earnings whenever you earn, along with no transaction fees. Solo mining refers to calculating and finding the correct hash to win the block all by yourself.
It requires you to purchase all the equipment, including hardware and software, and conduct the processing independently. That being said, you will also get to keep the entire profit to yourself. Does solo mining seem a little too expensive? You can easily join one of the multiple Litecoin mining pools out there. Since Litecoin is a proof-of-work mining coin and real energy has to be provided, miners incur recurring costs that need to be amortized.
This is why miners have to sell parts of their earned Litecoin from time to time in order to pay for running costs, being mainly electricity and hardware equipment. If you liked this article, then you will love Real Vision.
At Real Vision, we help investors like you understand the complex world of finance, business and the global economy with real in-depth analysis from real experts. Skip to content. RV Blog. How to Mine Litecoin. Real Vision September 8, PM. How many litecoin units are there to mine? Understand the Future of Everything. Join the crypto revolution.
How much can you earn mining lTC? How to start mining litecoin. There are a few basic steps you need to follow: Acquire suitable hardware: In order to most profitably mine Litecoin, you need to get ASIC machines. These can be bought from official producers or resellers. Download and install the respective software necessary to run the ASIC miners.
Make sure they are really running according to the scrypt algorithm. Join a suitable mining pool. For Litecoin mining, f2pool might be a good address to begin your search for a suitable mining pool.
In order to collect any revenue from the block rewards, you need to register your payout address.
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