What exactly is litecoin mining?

[waterjug]

I'm confused by this thing I've been hearing about...are you basically trying to steal online currency from other people? I'm completely out of the loop on this, is it actually profitable??

 

[DaveSimmons]

It's a way of creating digital tulips.

> is it actually profitable??

Yes, if you're at the tip of the pyramid.

 

[Mark R]

Litecoin is a cryptographic "currency" rather like bitcoin.

To make the currency secure, every transaction is broadcast publicly, and then digitally signed by "miners" using a very complex algorithm, which is used as "proof of work". A transaction can be regarded as valid once a certain number of "miners" have verified it and signed it off.

Because mining is very CPU intensive, there is a small reward to miners in that new coins are spawned into the miner's accounts. In addition, when transmitting coins between wallets, a small transaction fee can be charged, and the miners that process the transaction can take a cut of it.

In general, GPUs can be used for much greater efficiency over CPUs, with AMD cards massively better than nVidia cards.

Yes, it is profitable at the moment. A 7950 card can generate about 0.2 litecoins in 24 hours, while consuming about 6 kWh of electricity. 0.2 litecoins can be sold for about $5, whereas 6 kWh of electricity costs about $1.

There are people buying hundreds of cards (I've heard of someone buying 200 radeon 290x cards last week) to mine with.

There are major risks to profitability. The mining "difficulty" auto adjusts according to how much CPU power miners have, so that the coin spawn rate stays constant. If the total amount of CPU power dedicated to mining doubles, then the difficulty doubles and the rewards gets cut in half.

Right now, the litecoin mining CPU power is going up like mad. It's pretty much doubled in the last 10 days, and the rate of increase is getting steeper.

The price of litecoins also fluctuates like crazy - over the last week, they have fluctuated between $16 and $51, spending most of the time in the mid 30s, and are no about $26.

 

[lxskllr]

I've been cpu mining litecoins, but I don't expect to get anything. You really need a gpu at least, but mine isn't good for mining. My main goal is generating heat, and if I somehow luck into some litecoins, then great. I'll donate them to an organization I like.

 

[ultimatebob]

Most people aren't stealing them, they are "mining" them using a software program that generates this digital currency by solving complex math problems.

Google "Litecoin Mining" and you'll find some good tutorials out there.

The system is designed to increase the difficulty of the problems as more people run the mining software. At this point, you need a high end AMD video card to profitably mine these coins, as CPU's and Nvidia cards can't do it nearly as quickly.

Even then, you're only making a few bucks a day. You would probably make more money collecting cans off the side of the road for a few hours.

 

[Leros]

Most people aren't stealing them, they are "mining" them using a software program that generates this digital currency by solving complex math problems.

Google "Litecoin Mining" and you'll find some good tutorials out there.

The system is designed to increase the difficulty of the problems as more people run the mining software. At this point, you need a high end AMD video card to profitably mine these coins, as CPU's and Nvidia cards can't do it nearly as quickly.

Even then, you're only making a few bucks a day. You would probably make more money collecting cans off the side of the road for a few hours.

Yup. Unless you have a very specialized rig, you're probably going to spend more money on electricity than you'll make. Even if the value of litecoins explodes, you'd be better off just buying them for cash now.

 

[Red Squirrel]

Litecoin, because of the type of crypo it uses, cannot (yet) be mined with ASICs, like bitcoins. ASICS are special cards designed specifically for bitcoin mining and are more expensive than VGAs. There is a risk when you buy these because they will be a paperweight if bitcoin completely fails. Some people take it VERY seriously though, check this out!

http://hongwrong.com/hong-kong-bitcoin/

That is bitcoin though, not litecoin.

Both can be considered to be very similar, they are both P2P based currencies. You can convert to dollars or other currencies.

I'm no expert on this stuff though, so someone correct me if I'm wrong on anything.


I've been wanting to get into it myself but I've been busy on other projects and spending money on those, so I think by the time I can spend on this I'll be too behind for it to be worth it.

 

[sdifox]

It's a typo. Lint coin mining. You collect all the lint you find and trade them in for coins. By weight.

 

[Hugo Drax]

So is there a currency market now for all these newfangled digital fiat currencies.

 

[lxskllr]

So is there a currency market now for all these newfangled digital fiat currencies.

Bitcoin's the big one, and the one I think has a real chance of lasting. Litecoin's pretty marginal, but has some level of legitimacy. I think the rest of them are a waste of power unless you just want to make heat.

 

[Red Squirrel]

It's magic internet money. :biggrin:

But yeah, it can pretty much be treated like a normal currency, there are even bitcoin ATMs! Not sure exactly how they work though, have never seen one myself.

It's still a "risky" currency, but a lot of "real" ones can be risky too.

 

[John Connor]

ASICS are special cards designed specifically for bitcoin mining and are more expensive than VGAs.

ASICs all vary in price. I bought one for $15 on eBay. They can go up to several thousand dollars.

I'm no expert on this stuff though, so someone correct me if I'm wrong on anything.

Done!

 

[Red Squirrel]

$15?!?! Where did you get one for that cheap? I found some sub 1k ones but they were rather low output.

 

[John Connor]

I said I bought it on eBay. It can only mine 333 MH/s though. You typically buy at least 10 and plug them all in a giant USB powered hub.

 

[alangrift]

So many online currencies are available nowadays. Just don't know which one to go with.

 

[ultimatebob]

So many online currencies are available nowadays. Just don't know which one to go with.

I would go with one you can actually buy stuff with. That's mostly bitcoin and litecoin at this point.

 

[mmntech]

It's magic internet money. :biggrin:

But yeah, it can pretty much be treated like a normal currency, there are even bitcoin ATMs! Not sure exactly how they work though, have never seen one myself.

It's still a "risky" currency, but a lot of "real" ones can be risky too.

My problem with bitcoin right now is it's not being treated as a currency, but rather a commodity. People aren't using them to buy stuff. They're just speculating and pumping up the values, which has really defeated their purpose.

I'd be very weary sinking any substantial dollar figure into virtual currencies right now. Since the value of bitcoin is now very high, the bottom will fall out eventually. Especially since there's nothing really backing it like a state, corporation, or even a collective pot. The risk currently outweighs any possible benefits if folks are looking at it as a get rich quick scheme. Which many are.

As for mining, I don't know about litecoin but bitcoin ASICs are starting to get a bit out of hand. Mostly because people have leagues of these machines out in China working on it. Makes it really hard for an individual to make any money even just to cover the cost of a decent machine and the electricity.

I think bitcoin and its competitors are a good proof of concept. I like the idea of a truly global and anonymous online currency. Though the value will have to stabilize first. I think what you'll see happening is a corporation like Google or PayPal will eventually put out their own. Even if you lose a bit of the anonymity, it's backed by their corporate assets, making it a bit more secure.

 

[lxskllr]

I think bitcoin and its competitors are a good proof of concept. I like the idea of a truly global and anonymous online currency. Though the value will have to stabilize first. I think what you'll see happening is a corporation like Google or PayPal will eventually put out their own. Even if you lose a bit of the anonymity, it's backed by their corporate assets, making it a bit more secure.

a bit of anonymity? You mean tracked like you've never been tracked before. There's no security in Bitcoin. That's desirable, and by design. It's a cash-like bearer instrument. You lose it, or entrust it to the wrong person, it's gone, and there's no one to cry to. Made a bad purchase? Too bad. You're stuck with whatever it is you got; just like a flea market. It's not for everyone, but cramming the shitty current system into the Bitcoin model is the wrong way to go. The world doesn't need another credit card, or USD.

 

[slayernine]

It's a way of creating digital tulips.

> is it actually profitable??

Yes, if you're at the tip of the pyramid.

Digital currencies are not pyramid schemes... Litecoin is the largest competitor to Bitcoin, it has some features that make it advantageous. However being the #2 digital currency means almost all transactions in litecoin are speculative buying and selling.

The best example is to compare Litecoin to a small publicly traded company that is unproven in the marketplace but has the potential to do great things. People speculate on the future standing of said company by buying stock. The more people who buy stock, the higher the share price. Litecoin is the same thing. The difference between it and bitcoin is that people are actually using bitcoin to make purchases of goods and services which gives it more of a foundation to fall back on. It would be highly unlikely for bitcoin to drop below 100-200USD because there is demand for the currency outside of the speculation market. If investors move away from litecoin it could lose its value entirely which would effectively screw anyone invested in it.

If you lose money in digital currencies, it doesn't mean that currency is a 'pyramid scheme' it just means that you are bad at investments. Buy low, sell high. People shouting 'pyramid scheme' about everything they don't understand is really diluting the meaning of those words...

 

[slayernine]

Yup. Unless you have a very specialized rig, you're probably going to spend more money on electricity than you'll make. Even if the value of litecoins explodes, you'd be better off just buying them for cash now.

Litecoins differ from Bitcoins in that they cannot be mined with specialized chips like bitcoins. Right now you can only use CPU's and GPU's for litecoin mining. Any 5000 series or newer AMD cards do a good job. My 7970 mining for around 8 hours a day produced 0.95 litecoins in 5 days which is about $30.

 

[ultimatebob]

I love how they are posting system building guides on Forbes on how to build a Litecoin miner. Yeah, Forbes:

http://www.forbes.com/sites/jasonev...tecoin-101-how-to-build-your-own-mining-rigs/

I guess that Litecoin isn't just a geek toy anymore... now it's a toy for currency speculators as well!

 

[Leros]

So, I've reading about Litecoins.

For about $1000, I can build a rig with 3 Radeon 7950s that'll do 1900KH/s.

Assuming difficulty doesn't rise, I'd make my money back in 2 months.
https://www.litecoinpool.org/calc?h...ty=2964&power=800&energycost=.10&currency=USD

Difficulty has been blowing up though: http://coinplorer.com/Charts/Difficulty/LTC

Think it's worth it to get into it?

 

[lxskllr]

So, I've reading about Litecoins.

For about $1000, I can build a rig with 3 Radeon 7950s that'll do 1900KH/s.

Assuming difficulty doesn't rise, I'd make my money back in 2 months.
https://www.litecoinpool.org/calc?h...ty=2964&power=800&energycost=.10&currency=USD

Difficulty has been blowing up though: http://coinplorer.com/Charts/Difficulty/LTC

Think it's worth it to get into it?

Don't forget power. I don't know how much cool weather you get in TX, but when it's warm out you have to pay to cool your rig on top of what you spend crunching numbers. It's free in the cold when you need the heat.

 

[Leros]

Don't forget power. I don't know how much cool weather you get in TX, but when it's warm out you have to pay to cool your rig on top of what you spend crunching numbers. It's free in the cold when you need the heat.

Looks like power would be about $50 even when electric rates are the highest in summer. Haven't thought about how to calculate A/C costs.

 

[Drekce]

Where can you buy these things? Legitimately.