Many people are interested in cryptocurrencies as ways to make money. The most common way of making profits with cryptocurrencies is by “hodling.” This term refers to buying digital coins and keeping them for a long time (years) in hopes the price will rise.
This investment strategy works. By hodling, many early Bitcoin (BTC) investors made their fortunes. However, this strategy has a drawback. Cryptocurrencies are volatile and highly unpredictable. If you hold crypto for long, its price may increase. But it could also decrease and you may end up losing your investment.
Therefore, some crypto enthusiasts prefer trading cryptocurrencies within shorter time frames. Crypto traders have developed very sophisticated strategies to make profits with short-term trading. There are crypto converters that help traders by swapping specific coins. For example, one can find converters for crypto pairs like BNB Matic, DOGE Ethereum, and many more.
“Mining” is another way of making money with cryptocurrencies. It is the process of verifying data blocks that include details of transactions to be added to a blockchain. It involves the solving of cryptographic equations. To solve them within an acceptable time, one needs to use powerful computers. For this service, miners get rewards from the blockchain in the form of cryptocurrency.
As time passes, mining a specific coin is more and more difficult. For example, mining Bitcoin was possible with a regular personal computer in the early years of this cryptocurrency. However, today, it requires the use of application-specific integrated circuit (ASIC) miners to be profitable. ASIC miners are very powerful computers that consume a lot of electricity.
Mining for Litecoin in 2021
Although mining for Bitcoin is hardly profitable for individuals, doing it for other cryptocurrencies could still yield some profits. That’s the case with Litecoin (LTC). This cryptocurrency was created to address some of the problems of the BTC network like scalability and transaction speed. Also, the mining process is supposed to be easier. Hence, if you learn how to mine Litecoin 2021, you still could have some gains.
First, you should know that Litecoin uses the so-called Scrypt hashing algorithm. Bitcoin uses the SHA-256 algorithm. Scrypt has the advantage of supporting a higher degree of parallel processing. To mine Litecoin you need to buy an ASIC miner compliant with the Scrypt algorithm. Once you have the hardware, there are three possible ways to proceed:
- As a solo miner. This modality consists of using your ASIC miner to confirm blocks on your own. It was profitable in the early years of this cryptocurrency. Considering that Litecoin was launched in 2011, solo mining is hardly profitable nowadays;
- Joining a mining pool. This option can be profitable. In this modality, different miners contribute their computing power toward confirming blocks. The rewards are later divided proportionally to the computing power each miner contributed. So, the more money you invest in ASIC hardware, the more rewards you will get;
- Use cloud mining. In this modality, you don’t need to buy hardware. Instead, you can buy a mining package from a reputable company. They will use your payment toward covering the expenses of the mining process. Later, you will get some profits.
These are the different ways to mine Litecoin. Choose the one that you see as more convenient to your interests.