Litecoin was created back on 7th Oct 2011 by Charlie Lee, an ex-Google employee, who quit working in order to focus on Litecoin full time. Charlie is very active on Twitter. You can read his blog here. Litecoin was designed to complement Bitcoin by solving issues like transaction timings and concentrated mining pools.
Originally, Litecoin was a fork or spinoff from Bitcoin but with some modifications. Charlie Lee modified the code and protocol in the way he considered best in order to achieve large-scale adoption of the currency.
Lee wanted to reduce block confirmation timings of 10 minutes to 2.5 minutes, which would allow for both faster transaction clearance and in turn, lower transaction fees than Bitcoin.
By doing so, Lee enhanced the Litecoin transaction speed and now Litecoin is capable of facilitating payments around 4x as fast (when compared to Bitcoin).
The original Bitcoin core’s algorithm of SHA-256 was changed to the Scrypt algorithm. The Scrypt algorithm is very memory-consuming and makes it difficult to operate concentrated mining pools.
Let’s remind ourselves of a short definition of mining:
Litecoin mining is the processing of a block of transactions into the Litecoin blockchain. Litecoin mining requires solving for algorithms, and being the first to reach a solution is rewarded with tokens as payment.
Types of crypto mining algorithms
A hashing algorithm is a cryptographic hash function that maps data of any random size to a hash of a fixed size.
The most popular ones are:
SHA-256 Algorithm: algo generates a unique 32-byte (256-bit) signature for text strings. The block time in SHA-256 varies between 6 to 10 minutes and hash rate is measured in Giga hashes (GH/s). Popular digital currencies that are based on SHA-256 include Bitcoin, Bitcoin Cash, Peercoin, Terracoin, JouleCoin and several others.
Scrypt Algorithm: This is a much faster algo than the SHA-256 algorithm. You can mine on CPUs and GPUs using Scrypt. The hash rate is measured in kilohashes(KH/s). Litecoin, Dogecoin, Latium, Bitmark are a few among several more that are based on the Scrypt algorithm.
X 11 Algorithm: It is highly energy efficient and the GPUs can run on 30% lesser wattage. The XII algorithm runs a sequence of eleven hashing algorithms for PoW (Proof of Work). The hashrate is measured in megahashes (MH/s). Some of the cryptocurrencies that use X11 algorithm are Dash, StartCoin, CannabisCoin, XCurrency etc.
CryptoNight Algorithm: This algo was created with home miners in mind – it is designed to support mining on personal computer CPU. This is the algo most of the privacy focused coins use. CryptoNight hashrate is measured in Hashes (H/s). Popular cryptocurrencies that are based on CryptoNight are Monero, Dashcoin, Bytecoin, FantomCoin etc.
Ethash Algorithm: Dagger Hashimoto is a proposed mining algorithm meant for Ethereum. It is a combination of two currently used works.
A] Dagger algorithm that comes as an alternative to the memory-intensive algorithms like Scrypt. But dagger was susceptible to pressure in shared memory hardware acceleration.
B] Hashimoto algorithm meant to attain ASIC resistance by being IO-bound.
Dagger Hashimoto hash rate is measured in Megahashes (MH/s). The popular cryptocurrencies that are based on it include Ethereum, Ethereum Classic, and Expanse.
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Solo Mining vs Pool Mining
Solo mining used to be a thing in dawn of the cryptocurrencies. Right now, as the mining industry gets professionalized and corporated, solo miners are endemic species. But, the differences are still worth explaining.
It completely depends on the “pool fee”. If you mine solo, the blocks you mine will be completely random. You could mine two blocks in a day. You could go three weeks without a block.
If you mine in a pool, you take the pool fee right off the top. A 3% pool fee means you make 3% less. Also, most pools don’t pay transaction fees. But your revenue is more predictable. You’ll get paid on a regular basis and your payments won’t vary much.
One disadvantage of a mining pool is its centrality – most pools today have central nodes that can be DDOSed, and if not configured accordingly when a DDOS happens the miner will just sit idly instead of reverting to a different pool or to solo mining.
Unless you have a lot of computing power (several ASICs), you should probably mine in a pool.
How to choose a mining pool?
What is the criteria you should consider when choosing the right mining pool to join? Well, most of the below listed criteria points are rooted in basic common sense, like fees (the lower, the better), pool reputation and uptime.
Trustworthy pool operator ties into the pool reputation factor that we mentioned above. You don’t want to mine for people that will scam you out and run away with your money. This is probably the most important criteria to examine: do your research on the internet, ask questions in mining and crypto communities to see if there are negative reports and personal experiences with the pool.
Fees are self-explanatory; the lower the fees a pool charges for itself, the more money is left for you. Industry standard is around 1% so anything around that figure is basically the norm.
When joining a pool you certainly don’t want to be part of a pool that has just a bit more hashpower than you. You want the pool to have a big hashrate to make sure it will mine a lot of blocks and your payouts will be regular.
Server location and uptime – location plays role because of the latency – you need to be quick in broadcasting that found block, especially when mining a coin with huge hashrate and big mining difficulty.
Uptime is a big deal. Just like with regular websites, if it is offline when someone visits, the owner loses money. Same with mining pool servers – if they are offline, all miners in the pool lose money as nothing gets broadcasted to the blockchain.
Payout schedule is also a minor factor. It is an individual preference as some people like few bigger payments while others like a lot of smaller payments. If you need to choose, the latter is better just in case something happens with the pool – you don’t lose too much in that case.
Payout schemes are also a condition to pay attention to. There are numerous payout designs, some of the most common are
- PPS – Pay Per Share. Each submitted share is worth certain amount of BTC. Since finding a block requires shares on average, a PPS method with 0% fee would be 50 BTC divided by . It is risky for pool operators, hence the fee is highest.
- SMPPS – Shared Maximum Pay Per Share. Like Pay Per Share, but never pays more than the pool earns.
- ESMPPS – Equalized Shared Maximum Pay Per Share. Like SMPPS, but equalizes payments fairly among all those who are owed.
- CPPSRB – Capped Pay Per Share with Recent Backpay.
- Prop. – Proportional. When block is found, the reward is distributed among all workers proportionally to how much shares each of them has found.
- PPLNS – Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries.
- Score – Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more in the function of time t since start of current round. For each share score is updated by: score += exp(t/C). This makes later shares worth much more than earlier shares, thus the miner’s score quickly diminishes when they stop mining on the pool. Rewards are calculated proportionally to scores (and not to shares). (at slush’s pool C=300 seconds, and every hour scores are normalized)
Best Litecoin Mining Pools 2019
Similarly to bitcoin mining, litecoin mining is concentrated within three biggest mining pools that constitute more than 50% of the hashing power.
LitecoinPool is one of the most renowned and oldest Litecoin mining pools, launched in November 2011 by one of the main Litecoin developers that goes under a moniker Pooler.
It’s a pay-per-share (PPS) pool that also supports merged mining as well, which can yield the best results at times thanks to the mining of the secondary coin (payouts for both coins are carried out in LTC). Plus, with the PPS system you are paid even if a block gets orphaned by the Litecoin network.
One of the main reasons to pick this pool is due to its eight servers spread all over the world.
It’s also worth noting that this is one of the first pools to offer secure mining over TLS-encrypted Stratum connections.
It is currently 4th largest LTC pool by hashrate, producing 32.6 TH/s of hashes.
ViaBTC is a Bitcoin, Litecoin, Ethereum, Ethereum Classic, Zcash, Dash, Monero, BTM and Bitcoin Cash mining pool which always hovers at the top of the hash rate percentages. ViaBTC.com opened its mining pool in 2016.
The pool initially mostly utilized the Antminer S9 hardware, at the time one of the most powerful ASIC mining devices. Since its establishment, ViaBTC has managed to maintain an uptime of greater than 99.9%, signaling consistency and dedication.
The pool takes a percentage of the mining income to acquire funds for managing the accounts and covering all normal maintenance, including costs for the mining farm, deployment, repairs, staff salaries, risk prevention, and any other necessary expenses. 4% fee is charged for the PPS payment system and a 2% fee for the PPLNS. Profits are distributed daily at 0 AM Beijing Time (minimum payout offered by ViaBTC site is 0.0001 BTC). Their user UI is also lauded for its simplicity and usefulness.
ViaBTC is currently 5th largest LTC pool, behind Litecoinpool.org and the three big ones we mention below.
Owned and operated by Bitmain, world’s largest mining hardware producer, the pool was launched in 2015. The pool is said to be the one utilized by past Bitcoin community member and current most famous Bitcoin Cash promoter, Roger Ver. The pool is one of the most prominent ones out there and offers a native Bitcoin wallet as well as a related forum with an active community.
The pool operates on a Pay per Share model where the operator gives an instant, guaranteed payout to a miner for his contribution to the probability that the pool finds a block. regardless of how many valid blocks the pool finds. This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool’s operator. The pool lets its users mine currencies like Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Ethereum Classic, Grin, Beam and Decred.
BTC.com has fees which range from 1.5% to 4%. The pool offers three types of cloud mining contracts and there is usually a requirement to join a waiting list to get one. It is one of available pools that offer a chance to profit from Bitcoin mining. The payments miners get based on their contracts are delivered daily. Overall, the pool is considered legitimate by the community even though there are split opinions on Bitmain and their business practices.
BTC.com sits at the 8th spot of the litecoin pool rankings.
Prohashing is a multi-cryptocurrency mining pool that pays miners in any coin. You can mine hundreds of coins on ProHashing, as they support SHA-256, X11, Scrypt, CryptoNightV8, and many other algorithms.
It uses the PPS payment model and was founded back in 2014 by three engineers. Prohashing also takes it a step further by merge mining at the same time to further increase profits. They offer other detailed statistics such as mining efficiency, miners count, hash rate etc. For anyone who owns a Scrypt miner this is one pool that is recommended, the ability for payout in any cryptocurrency or even USD via Coinbase is excellent.
It is currently buried down in the rankings as 15th largest litecoin pool.
3 large pools to avoid
The pools listed below are all big pools that we do not recommend joining because it would go against the ethos of the whole cryptocurrency idea which rests on the premise of decentralized, leaderless, peer to peer power relations. The three pools below already control more than 50% of the hashpower which makes them central points of failure/control and possible threats to the long-term continuance of litecoin network and Litecoin token. Additional hashrate you would provide the pools with, would only cement their power and make litecoin network suspect to a 51% attack by these three pools.
One very young mining pool, created in 2018 in China. Launched by Blockin, a global online platform focused on developing blockchain related technologies and enterprises. Poolin.com is a multi-cryptocurrency mining pool, supporting mining of Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), Dash (DASH), Ethereum (ETH), Monero (XMR), ZCash (ZEC), Monero Classic (XMC), and Decred (DCR).
Poolin offers a website with extensive FAQ’s and instructions on how to configure your mining setup and on pretty much anything mining related that would interest you. Each of the minable coins comes with its own fee and payment method which are detailed here. Poolin might not be among the oldest and most talked about pools out there, but their hash rates speak for themselves.
As we can see from the diagram, Poolin controls 60TH/s of hashing power on litecoin network, as of March 30th 2019.
F2Pool is a Chinese mining pool which was created in 2013. Also among the network hash-rate heavyweights, it lets its users mine Grin, Litecoin (LTC), Ethereum (ETH), and Zcash (ZEC) besides Bitcoin. But the list doesn’t end here, below are all the coins you can mine on F2PPool:
It also offers merged mining with Namecoin, Syscoin and Dogecoin. Called the “Discus Fish” mining pool, which is a nickname stemming from their Coinbase signature. As the website was in Chinese and had no official English name people decided to call it 七彩神仙鱼 (Discus Fish), which was the nickname of one of the operators. Since then they’ve introduced the English interface option.
The website utilizes PPS payment method with 4% fees on transactions. The pool uses the Stratum mining protocol and offers port 25/80 mining, with daily automatic payouts enabled. It has minimum withdrawal limits which sit at 0.001 BTC, 0.01 LTC, 0.01 ZEC or 0.1 ETH. Their website is HTTPS protocol ready and can be criticized for not having 2FA enabled. The UI is simple and well presented, thus being suitable for beginners.
F2pool is currently second biggest litecoin pool by hashrate, controlling 56.5 TH/s of the blockchain.
Another one of the popular mining pools, AntPool has been founded in 2014. The pool was founded by Xu Lingchao and Tian Xin and operates from China. The pool currently lets you mine a fairly solid number of cryptocurrencies, including BTC, BCH, LTC, ETH, ETC, ZEC, DASH, SC, XMC & BTM. There have been very few complaints about the legitimacy of this pool throughout the past.
The pool is said to be supported by 2000 servers running all across the world to ensure it remains up all the time. The pool markets itself as “the most advanced mining pool on the planet” and currently supports 4 payment methods: PPS (2.5% fee), PPS+, PPLNS (0% fee) and SOLO (with daily settling of payments if they exceed 0.001 BTC).
AntPool offers three types of mining contracts. It also offers a wide variety of tools including a native phone app, APMiner Tool, Worker IP configuration Tools and AP connectivity. Finally, the pool has a variety of security options, including two-factor authentication, email alerts, wallet locks, as well as a sleek interface suitable for beginners.
Overall AntPool is also seen as a trusted mining pool that will let you profit by mining coins. Some people cite their fees as being on the higher side but they justify this with the quality of mining service they offer. Overall, another solid pool to be a part of, whether you are an up and coming miner or a mining veteran.
Is Litecoin mining still profitable?
Depends on your gear, but if you don’t own an ASIC miner, it is not worth the setup and electricity. GPU and CPU mining are long unprofitable on litecoin network. According to coinwarz.com, mining litecoin is only barely more profitable than bitcoin (assuming you can produce same hashrate on both networks).
After a big slump in hashrate, back in January, Litecoin network is back up in terms of TH/s capacity (above 300 TH/s). However, we personally don’t see any long-term future for litecoin (read our prediction to see why) and would recommend you join pools that mine bitcoin instead, as that is your safest bet when it comes to cryptocurrencies’ survival.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com