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A closer look at Litecoin mining: Is it worth doing, ITProPortal

A closer look at Litecoin mining: Is it worth doing, ITProPortal

The era of Bitcoin mining on the GPU is dead. A year ago, a single Radeon graphics card could crank out a reasonable fraction of a Bitcoin te a single day.

Today, that same GPU earns a thousandth of a Bitcoin te 24 hours, generating little value while consuming a substantial amount of power. The shift to ASICs for Bitcoin mining mirrors the shift from CPUs to GPUs, but the market isn&rsquo,t content to just turn those mining equipments off &ndash, not when there&rsquo,s an alternative currency available for which ASIC miners don&rsquo,t exist.

That alternative is Litecoin &ndash, and there&rsquo,s reason to think that buyers have emptied the shelves of AMD&rsquo,s Radeon hardware to build mining platforms. Very first off, there&rsquo,s the fact that &ndash, overheen ter the US at least &ndash, you can&rsquo,t find a high-end Radeon ter stock at the uur.

Newegg and Amazon.com are both out of stock, while overheen at Amazon.com, the lowly AMD Sempron 145 &ndash, a single-core, Two.8GHz chip with a $30 (£,Legal) price tag &ndash, is the fifth most popular CPU.

Further proof of this trend is the Litecoin network hash rate, spil shown here:

Clearly Litecoin miners are coming online, and they&rsquo,re coming online plusteken masse. Many of thesis are undoubtedly Bitcoin miners switching overheen now that GPUs are no longer cost effective, but some of thesis systems are very likely driven by fresh miners.

Litecoin, like Bitcoin, is a cryptocurrency, but it&rsquo,s based on scrypt, not SHA-256. Scrypt is a different cryptographic algorithm that&rsquo,s purposefully designed to be difficult to parallelise. While that hasn&rsquo,t stopped it from moving to the GPU, it requires far more memory than Bitcoin mining &ndash, several gigabytes worth, spil opposed to several dozen megabytes.

Litecoin confirms transactions swifter (every Two.Five minutes, rather than every Ten minutes for Bitcoin) and it contains more coins &ndash, 84 million coins will be found te total under the LTC protocol, spil opposed to 21 million for BTC.

Bitcoin and Litecoin prices tend to budge together, Bitcoins stratospheric leap overheen the past month &ndash, it&rsquo,s down from a high of $1200 (£,730) but trading at $870 (£,530) spil I write this &ndash, has created an odd situation where it&rsquo,s lighter to mine Litecoin and then convert LTC to BTC, than it is to just mine BTC to begin with.

Nvidia users may also take note &ndash, the gap inbetween Nvidia and AMD cards ter Litecoin mining is slightly smaller than with Bitcoin, with the GTX 770 capable of up to 240 KHash/s (yes, wij&rsquo,re back to KHash, from MHash) spil compared to about 880 KHash/s for the R9 290X. That&rsquo,s still a significant gap, but it&rsquo,s better than the BTC situation, where the 680 klapper just 130 MHash/s compared to the R9 290X&rsquo,s 874MHash/s.

Should you mine Litecoins?

My philosophy on mining cryptocurrencies hasn&rsquo,t switched since I very first heard about Bitcoin te 2011. If you want to make a bit of a play at earning a little scrape, go for it. Undoubtedly go for it if you already own the hardware. If you think mining some coins could help defray the costs of buying a fresh GPU that you&rsquo,re going to use anyway, then that&rsquo,s very likely a reasonable bet.

Understand, however, that the operative word is bet. Te the two years I&rsquo,ve bot mining, I&rsquo,ve gone through three pools. One became too puny to sustain itself, one wasgoed DDOS&rsquo,d to death, and 50BTC technically claims to still be operating, but its account system has bot screwed up for almost two months and the support staff no longer reaction emails. Its FAQ on the attack hasn&rsquo,t bot updated ter weeks. All withdrawals are frozen.

Leaping into this toneel, therefore, isn&rsquo,t something I recommend just for a lark, and I certainly don&rsquo,t recommend investing thousands ter building gigantic server farms to attempt and specie te on Litecoin. Yes, if you mined hundreds of Bitcoins inbetween 2011 and the present day, you might have just lodged your retirement &ndash, but the chances of predicting an essentially unpredictable market are too high. Don&rsquo,t risk money you can&rsquo,t afford to lose.

A peak of the hat to reader Justin Jaynes at Seeking Alpha, who alerted mij to the unexpected Radeon shortage and the LTC shift.

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