How to Mine Litecoins and Dogecoins

Mining cryptocoins is an arms race that rewards early adopters. You might have heard of Bitcoin, the first decentralized cryptocurrency that was released in early 2009. Similar digital currencies have crept into the worldwide market since then, including a spin-off of Bitcoin called Bitcoin Cash.

Today, there is very much a digital gold rush where people can make a small profit by investing a few hundred dollars in equipment, and then spend months mining for digital coins before any return on their investment sets in.

If you do decide to try cryptocoin mining, definitely do so as a hobby with a very small income return. Think of it as 'gathering gold dust' instead of collecting actual gold nuggets.

If your objective is to earn substantial money as a second income, then you are better off purchasing cryptocoins with cash instead of mining them, and then tucking them away in the hopes that they will jump in value like gold or silver bullion. If your objective is to make a few digital bucks and spend them somehow, then you just might have a slow way to do that with mining. 

How Cryptocoin Mining Works

This brief tutorial below is written for beginning miners who want to keep up-front costs to less than a thousand dollars. This tutorial focuses on mining 'scrypt' coins, namely Litecoins, Dogecoins, or Feathercoins.

The whole focus of mining is to accomplish three things:

  1. Provide bookkeeping services to the coin network. Mining is essentially 24/7 computer accounting called 'verifying transactions'.
  2. Get paid a small reward for your accounting services by receiving fractions of coins every couple of days.
  3. Keep your personal costs down, including electricity and hardware.

The Laundry List: What You Will Need to Mine Cryptocoins

You will need ten things to mine Litecoins, Dogecoins, and/or Feathercoins.

  1. A free private database called a coin wallet. This is a password-protected container that stores your earnings and keeps a network-wide ledger of transactions.
  2. A free mining software package made up of cgminer and stratum.   
  3. A membership in an online mining pool, which is a community of miners who combine their computers to increase profitability and income stability.
  4. Membership at an online currency exchange, where you can exchange your virtual coins for conventional cash, and vice versa. 
  5. A reliable full time internet connection, ideally 2 megabits per second or faster speed.
  6. A hardware setup location in your basement or other cool and air-conditioned space.  

Why Not Mine Bitcoins?

If you had started mining Bitcoins back in 2009, you could have earned thousands of dollars by now. At the same time, there are plenty of ways you could have lost money, too.

Now, Bitcoin mining is reserved for large-scale operations only. Over the years, the mathematical difficulty of discovering Bitcoins has grown far beyond what a regular individual can achieve at home. The current up-front investment and maintenance cost to mine Bitcoins is no longer worth it for small-scale consumers.

Unless you are willing to spend tens of thousands of dollars on industrial hardware and rent an air-conditioned office to house your hardware, there is no profit in mining Bitcoins. You are better off purchasing cryptocurrency with your regular money, and tucking it away in the hopes it will further climb in value.

Litecoins and Dogecoins are the popular digital currencies that are still within the grasp of consumer-level users with hobby budgets, with Feathercoins being a third option that is gaining traction.




Comments