How to Mine Litecoin: Litecoin Mining Guide

Among mining cryptocurrencies and blockchain networks, Litecoin (LTC) is perhaps the most frequently compared cryptocurrency with Bitcoin (BTC). Litecoin is a direct descendant, that is, a fork of Bitcoin, and shares many properties with the world's leading cryptocurrency - the mining process, supply caps, and halving.

Litecoin, one of the earliest cryptocurrencies on the market, was launched in 2011 and is often referred to as the “silver” of the cryptocurrency world, while the “gold” is reserved for Bitcoin. Litecoin is one of the easiest cryptocurrencies to mine. Due to its lesser prominence and popularity compared to Bitcoin and some other offshoots of Bitcoin, such as Bitcoin SV and Bitcoin Cash, the difficulty of mining Litecoin has generally been quite low. Therefore, LTC may turn out to be one of the most profitable coins to mine. In this article, we will talk in detail about how to mine Litecoin.

How does Litecoin mining work?

The process of mining Litecoin is similar to that of its parent, Bitcoin, or other proof-of-work (PoW) blockchains such as Dogecoin (DOGE), Bitcoin Cash (BCH), or Ethereum Classic (ETC). Miners are trying to solve a computationally intensive mathematical puzzle in order to be eligible to add the next block of transactions to the Litecoin network. Although we have called the mining process the solution of a “math puzzle”, it is probably best described as a simple number-swapping exercise that does not require serious mathematical effort. Essentially, miners use their powerful rigs to constantly generate new combinations of numbers in the hope of finding the match required by the Litecoin network software.

First miner, which manages (in fact, randomly) to find the required combination of numbers, gets the right to confirm the current mined block. Like Bitcoin, solving/mining a block in Litecoin is far from altruistic – miners receive the standard mining reward in LTC coins.

Currently, the miner's reward for each solved block is 12,5 LTC (about $1). Just like Bitcoin, Litecoin has a built-in reward leveling mechanism during the mining process. The reward in Litecoin is halved every four years, just like in Bitcoin. The initial value of the reward was 200 LTC between 50 and 2011, during the first four years of the coin's operation. The first halving, bringing the standard reward to 2015 LTC, took place in August 25. This was followed by a halving in August 2015 that reduced the reward to the current 2019 LTC. This year we will see another round of halving. This is expected to happen in July 12,5 and the reward will drop to 2023 LTC.

Compared to the size of Bitcoin's reward, these numbers look rather unimpressive. However, a new transaction block is generated in Litecoin every 2,5 minutes. This is four times more frequent than Bitcoin's 10-minute block period, which means that Litecoin miners can earn rewards significantly more often than Bitcoin miners. Moreover, Litecoin is much easier to mine than its “father” Bitcoin, judging by their mining difficulty metrics.

Mining difficulty indicator

Mining Difficulty Score is a standard metric used to evaluate the computational requirements for mining a coin. It determines the number of hashes that the machine needs to produce to solve a new block. Among the popular cryptocurrencies suitable for mining, Litecoin ranks second in terms of mining difficulty after one of its descendants, Dogecoin.

How to mine Litecoin?

There are three main ways to mine Litecoin:

1. Solo mining
2. Through a mining pool
3. Through a cloud mining provider

Each of these options has its own merits. However, today, solo mining without a very powerful mining machine has become difficult to profit from due to increased competition among miners. This is not something unique to Litecoin. By the beginning of 2023, solo mining without a powerful rig will be a futile exercise for almost any popular blockchain network.

Solo mining

With solo mining, you join the Litecoin network as an individual mining node and use your mining machine to mine transaction blocks. If you manage to add a new block to the chain, you will receive the standard mining reward of 12,5 LTC without having to share it with other network members. This is the main and, perhaps, the only advantage of Litecoin single mining.

The main disadvantage of Litecoin solo mining is the infrequent and inconsistent rewards. Single miners compete with mining pools, massive cooperatives that combine the computing resources of a large number of miners to solve the problems of creating new blocks in the network. The combined hash power that mining pools have makes profitable solo mining extremely difficult.

Unless you have a very powerful machine, you may never get a block reward. Even with a powerful mining rig, you can expect to be rewarded for the next block for a long time. This, of course, if you manage to solve at least one block.

Litecoin Mining Pools

Litecoin mining pools are another and probably the most popular way to mine LTC. These pools pool the resources of multiple miners to increase the chance of solving a block of transactions. When a pool member manages to mine a block, the reward of 12,5 LTC is shared among all pool members.

Each participant receives a share of the reward proportional to the hash power spent. So, as with solo mining, it's advantageous to have as powerful a rig as possible when joining a pool. The image below shows the top 10 Litecoin mining pools as of January 31, 2023.

Many mining pools keep a small percentage of the reward, usually between 0,1% and 3-4%, for providing their services. However, the good news is that there are at least a few large pools in the Litecoin mining industry that charge no fees at all. For example, one of the leading Litecoin pools, litecoinpool.org, has always been free to mine.

Solo mining vs Litecoin mining pool

For miners without very powerful rigs, pool mining may be the only viable option for earning rewards. Naturally, rigs without significant hash power are likely to earn very little in any mining pool. However, at least you will have a steady flow of funds. In contrast, solo mining without a high-end rig will most likely not generate any rewards at all.

Even if you have a very powerful solo mining rig, pool mining can give you a more stable way to earn rewards. While your powerful setup may still allow you to make a profit, joining a pool gives you the opportunity to earn rewards at a much higher frequency, albeit in small portions.

Let’s say a miner with a high performance rig manages to earn a full block reward once a month on average. By joining the pool, he will be able to earn this amount consistently, in small parts daily during the same period of one month. In other words, joining a pool may not increase the overall profitability of your mining activity in the long run, but it will definitely allow you to earn a more stable income.

The larger the pool you join, the more often you will be able to receive rewards.

Cloud Mining

In addition to Litecoin solo and pool mining, there is a third, less traditional way to participate in the mining process - using a cloud mining provider. Under the cloud mining model, you simply pay a monthly or yearly fee to a service provider who “leases” the hash power from you. The cloud mining provider mines the cryptocurrency for you in exchange for a fee and gives you a share of the mining profits commensurate with the hash power you rented.

Cloud mining does not require any hardware from you, which is a big advantage over solo mining or pool mining. Essentially, you're just paying a fee based on positive earnings from the cloud provider. Naturally, your earnings may fluctuate depending on network activity and mining difficulty on the Litecoin network. While the fees you pay to a cloud mining provider are usually fixed, your earnings tend to fluctuate.

Take into account, however, that the choice of reliable cloud mining providers is rather limited, especially for Litecoin and other mined cryptocurrencies lesser known than Bitcoin. Some of the major cloud mining providers with Litecoin mining capability are − NiceHash и bitdeer.

What is needed to mine Litecoin

Litecoin Mining Hardware

Theoretically, Litecoin can be mined using CPU, GPU, or ASIC rigs, powerful machines specifically designed for cryptocurrency mining. However, in reality, Litecoin mining with CPU or GPU is no longer a profitable option. Although the difficulty of mining Litecoin is much lower compared to most other leading PoW cryptocurrencies, competition between miners on the chain has increased over the past few years. With increased competition, CPU or GPU mining simply won't be profitable.

Using an ASIC machine is the only real way to profit from Litecoin mining. ASICs have been popular in bitcoin mining for many years.

Unfortunately, Bitcoin ASIC cannot be used as a Litecoin mining rig. This is because Bitcoin and Litecoin use different hashing algorithms. Bitcoin uses the SHA-256 algorithm while Litecoin is based on Scrypt hashing.

The good news is that the ASIC machines used to mine Litecoin can be used to simultaneously mine another very popular coin, Dogecoin. Dogecoin is one of the evolved descendants of Litecoin and uses the same Scrypt hashing algorithm. Due to the high level of compatibility between these two cryptocurrencies, they are often mined together through merged mining.

With merged mining, you simply use the same machine and resources to mine two cryptocurrencies at the same time, in this case Litecoin and Dogecoin.

Litecoin Mining Software

After setting up your mining hardware, you will need to download and use dedicated Litecoin mining software. Many software packages are well suited for Litecoin mining. Some of them, such as multi miner и CGMinerare completely free to use. Popular paid Litecoin mining software packages include Kryptex и Cudo miner.

Litecoin Wallet

To store the extracted funds, you need a Litecoin wallet. Not all leading software wallet brands support Litecoin. Among the popular wallet providers that provide the ability to use a Litecoin wallet are: Atomic Wallet, Trust wallet и Guarda wallet.

How long does it take to mine one Litecoin?

The Litecoin block time is 2,5 minutes, which is exactly how long it takes to mine one Litecoin. In this regard, Litecoin is mined four times more often than Bitcoin, Bitcoin Cash and Bitcoin SV. Among the popular minable cryptocurrencies, two have even shorter block times than Litecoin – Dogecoin (1 minute) and Ethereum Classic (15 seconds).

What is the best way to mine Litecoin?

At the beginning of 2023, the optimal way to mine Litecoin will be to use a sufficiently powerful ASIC machine and join a sufficiently large pool. Solo mining is still possible with a very powerful ASIC rig, but pooling is recommended even if you own the most powerful rig. By joining a pool, you will ensure a much more stable mining income.

In addition, Litecoin is one of the coins for which there are several free mining pools available on the market. Thus, pool-based mining is optimal for LTC.

When organizing mining, make sure that you are also mining Dogecoin in a combined format with Litecoin. At the same time, you do not spend any additional resources and only win by earning DOGE in addition to LTC.

Is mining Litecoin profitable?

As discussed earlier in our article, Litecoin is one of the easiest coins to mine, and only Dogecoin has a lower difficulty score. However, this does not mean that Litecoin mining will necessarily be profitable. The competition among miners in 2023 will be very tough in almost all popular cryptocurrency networks.

Also, like Bitcoin, Litecoin has a limited supply. In total, 84 million Litecoins will be created, and as of January 2023, about 72 million have already been minted. Combined with the reward halving mechanism, the ever-decreasing reward will drop to zero by 2142. Therefore, while Litecoin remains relatively profitable for now, keep in mind that its profitability will only decrease over time.

To correctly assess the profitability of Litecoin mining, we recommend that you use popular online profitability calculators. WhatToMine.comis undoubtedly the most popular among such calculators. Go to the calculator section of the site, select Litecoin and enter the key parameters for estimation - the hashrate and power consumption of the mining rig you own or intend to purchase, your electricity costs and the fee you will pay when mining through the pool.

The calculator will quickly show you how much profit you will make, if at all. Keep in mind, however, that mining profitability estimates can change rapidly depending on factors such as competition between miners on the network and, not least, the current market price of LTC.