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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First time to digital currency?
Please see What is a Litecoin? FIRST!!!