This way, a smaller miner can team up with a lot of hash power, making it more probable that he will get a steady flow of block rewards out of his minings machines. If someone is in possession of only a handful of scrypt-based ASIC machines, it is best to plug these mining machines into so-called mining farms. Just like the Bitcoin mining industry, Litecoin mining today is also dominated by mining pools. So while ASIC miners used to mine Litecoin cannot be switched to mining Bitcoin, they can easily be changed to mine other coins, most notably Dogecoin, which also adheres to a scrypt-based algorithm. In contrast, Litecoin uses a fundamentally different algorithm called “Scrypt” to process hash functions. For Bitcoin, the mining algorithm used is SHA-256. While Bitcoin also uses ASIC miners, these machines are predicated on a different algorithm. These ASIC mining processors have been uniquely designed to mine Litecoin. In order to competitively mine Litcoin, so-called application-specific integrated (ASIC) mining machines are needed. Today, Litecoin cannot be mined efficiently with CPU or GPU graphic cards anymore.
I WANT TO START MINING LITECOIN ON APPLE PROFESSIONAL
With ever more hash power being provided by more as well as more professional actors, mining has become increasingly difficult. In the early days of Litecoin it was very well possible to mine the cryptocurrency using home gear computer hardware like classical CPU or GPU (both of these are computer processing units). Because Litecoin represents an open, permissionless system like Bitcoin, anyone with access to computer processing power can participate in mining. Ultimately, the miners are handsomely rewarded for providing computational power to the Litecoin network and thereby making the network secure for the decentralized handling of peer-to-peer transactions.Ĭontributing to the mining of Litecoin equals providing processing power, also known as hashpower, to the Litecoin network. Whichever miner successfully solves this puzzle first and thereby outcompetes his contenders and gets to add a new block to the blockchain is rewarded with some additional Litecoin in what is called a block reward.
The energy used to mine Litecoin is going into dedicated computer machines, powering processors in a global competition to solve cryptographic puzzles at the cost of computing power. While costs and energy are incurred for Litecoin miners as well, they are not the result of digging into the ground in the search of precious metals. The term mining is an analogy that is borrowed from the process of extracting precious metals from the ground as they also need to be mined at the cost of labor and energy. These vital network participants are the ones doing the mining and are in return rewarded with the cryptocurrency.
The receivers of the newly issued Litecoin units are the so-called miners. In place of a pre-mine, where the entire stack of Litecoin units would be created in one fell swoop before the network’s launch, Litecoin is issued and released by the protocol in a pre-programed way. The distribution of coins has therefore been designed in a decentralized manner as well. As a result, there is no central entity to distribute the cryptocurrency out into the world. Just like Bitcoin, Litecoin is a decentralized cryptocurrency, whose digital ledger is maintained by a decentralized network of nodes instead of one single party. Since Litecoin is a Bitcoin fork with a few tweaks and changes to its source code, Litecoin mining works similar to mining Bitcoin.
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