I came across Litecoin eventually when looking for useful GPGPU tasks that people would use themselves rather than relying on synthetic benchmarks. My first choice was the more popular Bitcoin mining, and I started using it in our reviews. I really wish I would have done this sooner, because after being introduced, I was hooked on bit mining and CryptoCurrency in general. As you may have seen in our review of the Sapphire Radeon 7870XT, I commented that the days of the GPU being useful for Bitcoin mining were numbered.
…as more people mine, and specialized hardware hits the market, mining difficulty increases. So where a 400 M/hash card could make about ฿0.07 BTC per day last January when the difficulty was around 3,000,000, you are now looking at about ฿0.03 generated instead. Using today’s exchange rate, that’s going from $221 USD a month in income, to $97.70. It will only go down from there, and depending on how much you pay for energy, will eventually not be profitable at all.
When the flood of mainstream ASIC units hit the market – such as Butterfly Labs’ $129 units that can calculate at 4.5 G/hash per second while consuming just 6 watts of power – difficulty will likely skyrocket to the point where it will not be feasible at all to use even the best GPUs.
Mining difficulty has been increasing at a high rate, and it is only going to get worse when Butterfly Labs finally ships these cheap mainstream miners (a look at their somewhat awkward hardware design might give you some clues on why it’s taking so long for them to deliver). So what happens to the GPU miners who are left behind by the ASIC miners? The answer is, you’re going to get left in the dust. It would be like trying to mine gold with a pan today – you might find the occasional crumb, but overall it’s not going to be worth the effort. Enter Litecoin, one of the alternative CryptoCurrencies (and most popular one) that popped up after Bitcoin.
Litecoin vs Bitcoin
Litecoin was created as an alternative to Bitcoin, rather than a replacement. It’s the silver to Bitcoin’s gold, if you will. They took many of the fundamentals of Bitcoin, and changed some things to be a viable alternative.
- There is going to be a lot more of it. Both currencies have an absolute limited supply, and there will be 4 times as many Litecoin coins mined than Bitcoin. This theoretically makes it worth 1/4 the value of Bitcoin.
- The target time for new blocks is 2.5 minutes, rather than every 10 minutes. This means transactions will occur much faster than Bitcoin’s. This makes it more suitable for day to day use.
- Bitcoin’s uses SHA-256 as its hashing algorithm. GPUs do a decent job of this, but as you can tell, more specialized hardware performs far better. Litecoin uses Scrypt, which is designed specifically to prevent specialized hardware attacks. It runs best on general purpose hardware – CPUs and GPUs in particular.
Most importantly to us, Litecoin is a viable alternative for people who want to mine casually at home. Because Bitcoin has been the one getting all the attention, Litecoin’s rise in price hasn’t been nearly as dramatic. If you get in early enough, you can use that as an advantage. Let’s take a look at the viability of mining Litecoin with one of the GPUs we reviewed recently: Using the Radeon 7870 as an example, with a power cost of $0.12 USD per kWh
|Mining Rate||400 MHash/s||280 KHash/s|
|Power Consumption||200 W||150 W|
|Coins Mined per Month||0.914||56|
|USD Exchange Rate|
(rate as of 4/5/2013)
|Monthly Profit USD||$107.64||$196.38|
How to Mine Litecoin
There are a few programs to mine with, the easiest being the Scrypt version of GUIMiner. This is a simple Windows app that can get you going in no time. It is in alpha though, so you will want to keep an eye on it to make sure it doesn’t crash on you. The thing about Litecoin mining is that there are many settings that can be tweaked to increase or decrease performance. I personally use a thread concurrency of 8096, with 2 GPU threads. This gets the Radeon 7870 to about 380 KHhash/s, but I have seen people say they can hit 400-450 with the same card and some overclocking. I haven’t been able to get any more than 380 though, so you will definitely want to spend time tweaking these numbers. Search around for the best settings. You can increase this rate by about 50-60 KHash/s by adding a CPU miner. If you have an efficient CPU, this might be worth doing until the difficulty gets too high. You will probably want to join a pool, to have a steady flow of income rather than ‘lucking out’ to solve a chain. There are several pools that support Litecoin, which you can read about before deciding which one to use.
Create a Litecoin Wallet
Once you have mined some coin, you will want to deposit it to a wallet as soon as you can (some places charge less commission if you wait longer). Simply download the Litecoin client from the main site, and once it updates the blockchain, you will be able to see your deposit. After that, you will want to encrypt the wallet, and back it up. If dealing with local copies, it’s up to you to not lose! Much like you would have to look over a chunk of gold you mined, nobody is going to help you if you wipe your hard drive and lose your wallet info. If you are interested in learning more, check out this post. It will give you more details on how to get started.
Want Some Free LTC?
If you thought this post was informative, and want to get started with Litecoin, how about a head start?
If you Like this article on Facebook, let me know your LTC address in the comments, and I’ll send some coin your way. We got lots of requests – as soon as the transfer fee gets lowered, I’ll send some coins your way! It won’t be much, as I just got started with LTC myself, but I don’t mind if it helps spread the word. Alternatively, if you are in a generous mood, you could tip me some LTC using the code blow, or BTC that’s what you’re into :)