Gone are the days when miners would mine Bitcoin using graphics processor. One year back, a simple Radeon GPU would produce a good amount of Bitcoin on a daily basis. In today’s date, that very GPU generates a 1000th of a Bitcoin in one day, creating little value when exhausting a considerable amount of energy. The general move from GPU to ASICs with respect to Bitcoin mining somehow reflects the move from CPUs to GPUs. Nonetheless, the generation of GPU mining is not completely extinct as yet– especially when there is a new currency making headlines lately, one which does not require ASIC miners.
This alternate currency is none other than Litecoin – and there are a number of reasons to believe that purchasers have exhausted the racks of AMD Radeon to create mining rigs. At this moment, it is extremely difficult to lay hands on a high-end AMD Radeon in the US. Amazon.com and Newegg, both are currently out of stock. AMD Sempron 145, comparatively poor is quality, ranks 5th in the list of popular CPUs and is a single-core chip with a capacity of 2.8GHz. Its current market rate is $30. Obviously, more and more miners are joining the Litecoin network. Many of the Bitcoin miners are, in fact, switching to Litecoin, as GPUs are no more cost-effective.
The Litecoin Network
Just like Bitcoin, Litecoin is also a digital currency, and runs on the Scrypt algorithm, and not SHA-256. Scrypt is an alternate cryptographic protocol which is difficult to parallelise. This does not create a major hindrance when opting for GPU mining; nonetheless, it does require significantly more memory when compared to Bitcoin mining.
Litecoin affirms transactions at a better speed (at a regular interval of 2.5 minutes, instead of Bitcoin’s 10 minutes) and the coin cap is also more than that of Bitcoin. A total of 84 million coins can be generated in a lifetime, instead of Bitcoin’s 21 million. No doubt, the value of Bitcoin is much higher than that of Litecoin. This is the very reason why it is recommended that you mine Litecoin and then convert it to Bitcoin. Mining Bitcoin directly will not fetch you the desired rewards.
The Litecoin Blockchain
If you just wish to own Litecoin, then you should presumably purchase it from an exchange such as Coinbase. But, if you want to make an earning from Litecoin mining and have the time and the necessary resources, then you may very well go ahead with it.
Cryptocurrencies such as Bitcoin and Litecoin run on the PoW protocol and are maintained by the blockchain technology – an ledger comprising of all the exchanges which took place on the system. Miners gather information on all these transactions communicated by the different members in the system since the previous block was discovered, and then accumulate the exchanges into structures known as Merkle trees. They then try and locate an adequate hash.
‘Hash’ is nothing but the consequence of running restricted cryptographic protocols on a mass of information: a particular dataset will just respond with 1 hash, yet the hash can’t be utilized to reproduce the information. Rather, it fills the need to effectively guarantee that the information hasn’t been messed with. If even a single number is altered in a long series of transactions, this hash will turn out to be completely different. Since each block holds the hash of the previous block, the system will quickly know if somebody has attempted to embed a false transaction in the distributed ledger, without combing through it completely at a regular interval of 2.5 minutes.
Why do miners run the hashing capacities again and again, when doing it only once will be enough? This is because a considerable amount of hashing power allows an intruder to spend a few coins, and then heap a good amount of spam transactions over it. Along these lines, they could exhaust their coins, and at the same time, hold them; this is called a double-spending assault. For the system to wade through billions of hashing capacity, the blockchain produces such huge “work” that fixing it or overpowering it will be excessively costly.
Cryptocurrency mining is a competitive business. The miner who first produces a hash lesser than the target which has been set by the system “locates” the new block, gets the mining reward – which currently stands at 25 LTC – and the relevant transaction fees.