Mining cryptocurrencies is a way that you can earn digital tokens. Bitcoin mining is still popular among many crypto enthusiasts, but it has become more costly and difficult. Some are choosing to mine Litecoin and other so-called altcoins which use the Scrypt protocol because they believe this type of mining offers a better opportunity at making a profit.
Before you dash out and purchase an ASIC mining rig to begin your operation there are a few things you should know about how to mine Litecoin and other altcoins. You should know going in that it won’t always be easy and that there is some expense involved. Here is a very basic guide that should answer some of the most common questions about mining altcoins.
Beware the Promise of Quick Mining Riches
If you search the Internet for information on how to mine Litecoin and other altcoins you will be confronted with much optimism. Most of it is delivered by those who are engaged in selling ASIC mining rigs or other services. These sources of information often claim that making money mining cryptocurrencies is as simple as doing the following:
- Buy an ASIC miner and hook it up
- Configure your ASIC miner
- Use your miner to join a mining pool
- Collect your profits
If cryptocurrency mining were really that easy, everyone would be doing it. There is no quick path to mining riches. One thing we would agree with it that a mining pool can reduce your operating costs and improve profitability in many cases.
In the early days of cryptocurrency mining it was possible to mine with profit as a goal. This was especially true with Bitcoin mining. Today, the algorithms of the Bitcoin blockchain and others are becoming more complex. This means that the mathematical equations used in a Proof of Work concept are becoming more difficult to solve. More resources are required. The expense to mine is greater than it once was.
The advent of altcoins and the use of the ASIC miner to generate Litecoin and other altcoins has made it possible for more individuals to run their own nodes and mine tokens, but it still requires resources and time. The overall state of the cryptocurrency market also affects mining profitability. 2018 was a challenging year for Bitcoin and other digital tokens.
So, what is the takeaway here? Our point is that the person interesting in mining should proceed with their eyes wide open. Optimism is good, but it it best served with a touch of realistic expectations. Proceed with mining only if you are prepared to take the good with the bad, and only if you have a solid understanding that there is no shortcut to cryptocurrency riches.
The ASIC Miner – Your Starting Point
Before you can mine Litecoin and other cryptocurrencies, you are going to need some specialized computer equipment. This is most often called a mining rig. Basically, a mining rig is a computer that is solely devoted to mining altcoins. We’ll say that there are many choices here, far too many to cover in a single guide. Since most of them function on the same principles we will use one as an example.
The Antminer L3 series produced by Bitmain is one of the most popular choices among those who mine Litecoin and other altcoins. These mining rigs have gone through several versions and remain at the top of the list when it comes to potential profitability. The Antminer L3+ was released in 2017 and uses the Scrypt protocol to mine Litecoin.
When the cryptocurrency market experienced a boom in 2017 many miners reported that they could achieve daily profits of $20-$30 with the Antminer rig. Of course, 2018 changed all of that as all cryptocurrencies saw a sharp decline in value. As of 2019 most digital tokens have not been able to recover. The point here is that the value of your mining operation is going to be determined by the market price of the tokens you mine.
When we checked prices for the Antminer L3+ rig we found that buyers could expect spend anywhere from $100 to more than $250, depending on whether they were buying a new or used model. Of course, the cost of the mining rig itself is only part of the equation. You will also have to consider resources such as electricity. And we should state that the price mentioned above is only for the actual mining component.
The point we are making here is that the cost of mining is simply prohibitive for many people. Those who cannot afford their own mining operation tend to sign up with a mining collective like Genesis Mining where they can participate with others in the mining of Litecoin and other altcoins.
The Risk of ASIC Mining for Litecoin and other Altcoins
Mining any type of cryptocurrency, whether it be Bitcoin or Litecoin, is not that different from making an investment in the financial markets. You are taking a calculated risk that you hope will pay off in the form of crypto profits. Still, it is a risk that you are taking. There is always the chance that you could end up with nothing.
The original standard for cryptocurrency mining was to use a GPU mining rig which isn’t that different from a gaming computer in terms of its power. In fact, these types of miners utilized gaming rigs to mine tokens. The ASIC miner was developed specifically for mining cryptocurrency. This has created some concerns in the cryptocurrency community. Many developers believe that ASIC mining could lead to the creation of massive mining farms that could produce something known as a 51% attack.
A 51% attack is one that happens when a single entity controls 51% of the hash power on a network. Because some altcoin developers fear the possibility of such attacks, it is reasonable to expect that they could somehow change their code to render the ASIC miner useless.
If you are still thinking about mining cryptocurrency, why not consider a mining contract like the one we have recommended with Genesis Mining. You may find that your chances to make a profit are greatly improved when you use this method to mine Litecoin and other altcoins.