What is Litecoin?
Litecoin is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Inspired by and technically nearly identical to Bitcoin, Litecoin creation and transfer is based on an open source protocol and is not managed by any central authority. Litecoin is intended by its developers to improve upon Bitcoin, offering several key differences. As of November 2013, Litecoin had received extended coverage by mainstream media with agencies such as the Wall Street Journal, CNBC and The New York Times citing it as an alternative (or possibly even successor) to Bitcoin. Litecoin is the second largest cryptocurrency by market capitalization.
Crypto-currency can be obtained by a number of different ways. One method is to simply exchange hard cash online for litecoin, bitcoin, or a currency of your choice. Another method is to contribute to the crypto-currency network and receive rewards in the form of Litecoin. This way you contribute to the transactional process of Litecoin and make money doing it. to learn more about Crypto-currency read the url marked "understanding crypto-currency".
- A windows based computer
- An AMD graphics card
- An account with one or more mining pools
- A bit of patience
URL's used in this guide:
feel free to look over these before you begin
http://support.amd.com/en-us/download(update your graphics drivers)
http://notepad-plus-plus.org/download/ (optional text editor)
Information about the mining potential of your graphics card:
- Setting up a personal LiteCoin wallet
- Registering with a mining pool
- Downloading sgminer
- Configuring sgminer
- Download GPU tuning software
- Tune video card accordingly
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Step 1: Setting Up Your Very Own Litecoin Wallet
Visit https://litecoin.org/ and download the latest version of the LiteCoin wallet.
Once the download is complete double click on the downloaded file (litecoin-0.8.7.1-win32-setup.exe) and follow the onscreen setup.
Upon running the wallet for the first time, the wallet will need to sync with the LiteCoin network to ensure that it has the latest version of the block-chain (ledger of transactions).
Ensure that the install location of the wallet has plenty of storage space (5-10 gb) set aside. The wallet can take up a relatively large amount of storage space when it syncs up to the LiteCoin block-chain network.
Step 2: Picking a Mining Pool
Next you will need to register with a mining pool. Because mining requires copious amounts of computing power, miners pool their computing power into a "pool". This pooling of resources means miners are able to efficiently work and in return expect steady LiteCoin rewards.
There are quite a few mining pools to choose from:
Offers miners to choose from many different crypto currencies, or allow the pool itself strategically put the pools computing resources towards the most profitable crypto-currency.
LiteGuardian is a LiteCoin specific mining pool that offers competitive transaction fees and a easy to use interface.
I would recommend to do independent research to find a pool that works for you as new ones are being put out regularly. A great resource for information is the Litecoin Wiki, which provides a great list of mining pools as well great general information. (https://litecoin.info/Mining_pool_comparison)
Step 3: Installing Sgminer
Next, we are going to download sgminer. Sgminer is the program that allows your computer to connect to your mining pool of choice and begin crunching numbers for the LiteCoin block-chain.
There are a number of solutions to accomplish this:
The setup is primarily the same for most mining programs, with the exception of GUIMiner which provides a user interface. We will use sgminer for this tutorial.
Begin by downloading the sgminer client (http://www.sgminerwindows.com/)
Once your download is complete. Extract the contents of the .zip file to a easy to access location of your choice. In this example we will use the desktop directory.
Inside the folder you will find the various files required for the program, here you will configure your pool information as well as fine tune your video card for mining purposes. Without any configuration launching the sgminer.exe file will present you with a command prompt window asking for pool and user information. Because this process is cumbersome and tedious we will make a simple batch file to quickly feed in the required information to the miner and provide you a simple way to fine tune your configuration.
Step 4: Configuring Sgminer
For this process all you will need is a Notepad text editor and some basic information on sgminer configuration.
A great resource for the various options that are available for sgminer are located in the documentation of the program, which is found in the sgminer directory we created. The ‘README.md’ file can be read with either a text editor such as Notepad++ or Wordpad. We will be using Notepad++ in the example.
Please take a minute to look over the documentation to understand the basic functionality.
Using Notepad++ we will create a simple batch file to run sgminer with our customized parameters.
Create a new file in Notepad++ and save it in the sgminer directory we created. Name the file what ever you like, just make sure to save it as a “Batch File”. See image above.
Once created we can go ahead and input our parameters. The first line of code will be:
setx GPU_MAX_ALLOC_PERCENT 100
This will ensure your graphics card is being fully utilized while mining.
From here we will pass on mining pool information as well as the user information for that pool, this will ensure that you will be rewarded for the work that is contributed to the pool. This should be the next line:
sgminer.exe -o stratum+tcp://usa.liteguardian.com:3334 -u Username -p Password
Replace “tcp://usa.liteguardian.com:3334” with the URL of your chosen pool. This information will be available on the pools website. Along with that replace “Username” and “Password” with the credentials you created when registering with the mining pool.
At this point if you were to save the batch file and double click it in the directory (should be saved in the same folder as sgminer), sgminer should launch and begin its mining process. While the program now knows where to look for work, it is not optimized for your hardware and will run inefficiently
Step 5: Optimizing Sgminer
Mining benefits greatly from overclocking graphics hardware
Using utilities such as MSI Afterburner allows for quick and easy tuning of your video card as well as monitoring of the its temperature.
Download the utility here: http://event.msi.com/vga/afterburner/download.htm
The LiteCoin Wiki page is a great source of information regarding the hardware configurations of various graphics cards.
The article can be found here:https://litecoin.info/Mining_hardware_comparison
This is a repository of many users experience with various configurations and setups for the many video cards supported. Take your time looking through the list to get an understanding of what to expect.
Using the various options in the Wiki page as well as the README document you are able to define what speeds your card should run at as well as temperature controls to keep the card from overheating during operation.
In this example we will use an AMD 7950 video card, our batch file will look like this:
setx GPU_MAX_ALLOC_PERCENT 100 sgminer.exe -o stratum+tcp://usa.liteguardian.com:3334 -u Username -p Password -I 17 --thread-concurrency 30756 --gpu-engine 1000 --gpu-memclock 1600 --gpu-vddc 1.169 --temp-target 80 --auto-fan
Once optimized, the mining rate should be substantially higher.
Step 6: Profit
Once sgminer is up and running, the mining pool you signed up with will track your contributed mining work and reward you accordingly. The reward you will receive will vary on the number of individuals working in the pool, the difficulty of the crypto-currency itself, and the amount of work you contribute.
Once the pool recognizes your work it will put your earnings into a holding wallet on their end, to cash in your work you will need to transfer the currency to your own wallet we setup in Step 1. Many pools allow you to configure auto-deposit to streamline this process. Setting that up will vary from pool to pool, be sure to read their instructions.
Want to know more?
If you wish to learn more about the bitcoin protocol as whole and understand what your computer is actually doing while its mining, you should check out Michael Nielsen's write up of the bitcoin protocol.