What is a Litecoin?

Litecoin is a type of digital currency similar to Bitcoin.  This digital currency can be “mined” through use of PCs with high-end graphics cards, specifically Radeon graphic cards.

Why mine Litecoins not Bitcoins?

Mining Bitcoins are nearly impossible at the moment of writing this page as difficulty has risen to a point you will need to invest thousands of dollar in ASIC equipment to have some sort of profitability.  ASIC equipment is basically a GPU that’s custom designed to mine Bitcoins and in a way “cheats” the system.  Because of this, mining Bitcoins for long term may mean you having to invest in new ASIC hardware every couple months just to stay profitable.

In other words, unless you have a LOT of money to invest (probably over 50K USD), you are better off mining Litecoins.  You can always convert Litecoins to Bitcoins or any other digital currency through digital coin markets like BTC-E.com.  And yes, you can also use Bitcoins to buy stuff or even convert them back to USD or any other currency.

On the other hand, mining Litecoins is much easier in terms of initial costs and also may allow you to mine for much longer than mining Bitcoins.  Litecoin is basically identical to Bitcoin in terms of the software (as it’s open source) but it uses “Scrypt” instead of “SHA256” encryption, which is designed to block future ASIC systems from cheating the system.

So, there’s a limited supply of graphic cards the world is currently producing, meaning there will always be a limit on how many Litecoin miners can exist.  This leads to more stability of mining and also better chances that you can mine with the same hardware for a longer period of time (until new graphic cards are introduced to the martket).

Digital currency may be in its infant stages and what we are seeing is a new phenomenon that is changing the way we use money.  Think of a dollar bill.  Does it has any inherent value?  What is the world ended one day and you were the only one alive with billions of dollar bills.  You probably use them as kindle for fire.   Likewise, digital currencies like Litecoins and Bitcoins have value first because it takes a lot of mining hardware to create Litecoins/Bitcoins and more businesses are accepting them as payment method as we go along.

 

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7 thoughts on “What is a Litecoin?

  1. Jim

    Hi,
    I saw your youtube video on litecoin. I wanted to have someone build a rig for me with 5 R9’s 290X’s. Can you do that what would you charge me? I want someone to walk me though to get this up and running too once I get it. I want to start this out as a hobby. Are there better cards to use than the 290X that seems to be mentioned the most? I am just curious I don’t think I would go there instead of 5 what if you made a machine with 10 cards. Wouldn’t that run too hot and cost way too much money?

    Thanks,

    JIm

    Reply
    1. Wyeth

      I believe that as of now, the R9 290X is the best card you could go with for mining. This could end soon though, because the new nVidia architecture is greatly improving the mining preformance of nVidia cards, so the 290X’s reign could come to an end soon.

      As for running a machine with 10 cards, there aren’t any motherboards on the market right now that could house that many.

      Hope this answers some of your questions! God bless and have a great day!

      John 3:16

      Reply
    1. Max Lee Post author

      You may want to be careful for companies like KnCMiner or ButterFlyLabs, they have the right to ship you even at Q4 or next year. I am STILL waiting for my 300GH/s bitcoin rig BFL promised last year which I ordered in Dec 13. That means it’s nearly worthless even if I get it today, meaning if these companies don’t ship on-time as promised, you will lose all of your money. It’s more like a scam since they don’t take credit cards, only wire transfers. I would only put money on products that are ready to ship today otherwise you are risking your $10K for ASICs that may never arrive on time.

      Reply
  2. Christian Adams

    Max,
    I came across your highoncoins as I was bored waiting on some new highoandroid vids. Started doing a little research and I mean little. Which if your vids is outdated (if any) and where would you recommend I start as a dummy learning to mine?

    Reply

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