Litecoin is making a lot of noise, after a sharp rise in price alover.
Litecoin is a peer-to-peer Internet currency that enables instant payments to anyone in the world. It is based on the Bitcoin protocol but differs from Bitcoin in that it can be efficiently mined with consumer-grade hardware.
Litecoin provides faster transaction confirmations (2.5 minutes on average) and uses a memory-hard, scrypt-based mining proof-of-work algorithm to target the regular computers with GPUs most people already have.
The Litecoin network is scheduled to produce 84 million currency units.
One of the aims of Litecoin was to provide a mining algorithm that could run at the same time, on the same hardware used to mine Bitcoins.
With the rise of specialized ASICs for Bitcoin, Litecoin continues to satisfy these goals. It is unlikely for ASIC mining to be developed for Litecoin until the currency becomes more widely used.
It could be that Bitcoin miners are finally feeling the pinch of specialized mining hardware known as ASICs.
It could also be that a flood of newcomers to the crypto currency market is creating a demand not just for Bitcoin but also for Litecoin.
In any event, I’ve had quite a few people asking about a basic guide for Litecoin mining so here it is. Update 1/2/2014: This guide covers Radeon graphics cards. For a guide covering NVIDA cards check out our new Beginner’s Guide To Litecoin Minnig With NVIDIA Graphics Cards. If you’re not yet familiar with Litecoin or don’t yet have a Litecoin wallet I suggest you check out our guide to Getting Started With Litecoin. It provides a brief overview of the currency and a tutorial for setting up a wallet. Mining Basics Litecoin mining is the process of using your computer’s CPU (Central Processing Unit) and GPU (Graphics Processing Unit) to process transactions for the Litecoin network. By doing this you can attempt to solve a ‘block’ which pays out a reward. Currently the Litecoin reward per block is 50 Litecoins. Unlike Bitcoin, CPUs can still contribute enough hashing power to be significant to Litecoin, though this may quickly change. In fact, this was one of the original design features of Litecoin. Because Litecoin uses a scrypt encryption algorithm there is a much smaller efficiency gap between CPU mining and GPU mining. For this reason the Litecoin client still has a built in CPU mining program. Another important concept of modern mining is pool mining. A mining pool is a group of miner’s that pool their resources together so that they can find blocks faster. The reward is then split between the pool members based on their contributions. This tutorial uses Coinotron mining pool along with GUIMiner Scrypt and assumes Windows 7 or 8 as an operating system. Downloading GUI Miner Scrypt GUIMiner Scrypt is a recently put together mining program similar to the popular and easy to use Bitcoin GUIMiner. The main difference between the two is that this GUIMiner is built with a Scrypt miner as the backend. Many other Litecoin miners such as Reaper and Cgminer (The backends for this) are more versatile but usually more difficult for beginners. For most other Litecoin mining programs you need an understanding of the command line. In addition to GUIMiner Scrypt you’ll need to download and install the most recent drivers for your Graphics Card as well as the AMD APP SDK. If you do not have these installed you will likely get an error relating to OpenCL. AMD Drivers Download Page AMD APP SDK Download Page NOTE: GUIminer Scrypt is in it’s Alpha phase and may still have bugs. Check this bitcointalk thread out for full details on the miner and know issues. Also note that because GUIMiner Scrypt includes cgminer it may be detected as malware by antivirus and malware detection programs. However, GUIMiner Scrypt does not contain malware and is safe to use. More on this in the comments.