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Beginner's guide to mining Litecoin, Dogecoin, and other Bitcoin variants

Alex Castle | May 7, 2014
What's all the hubbub about Bitcoins and its brethren? Here's how to find out for yourself.

Because altcoins are less popular, and because many altcoins use a different kind of mining algorithm called "scrypt" that can't be solved by the ASIC boards, you can still feasibly earn these altcoins by running the mining program on your personal computer. You can then spend the altcoins or swap them for bitcoins at a cryptocurrency exchange. Unlike most altcoins, bitcoins can be spent at a number of e-tailers like Overstock.com and Tiger Direct.

For obvious economic reasons, the ease of mining an altcoin is basically inversely proportional to that altcoin's value. Turning altcoins into cold, hard cash is also more difficult than monetizing bitcoins. Altcoins are great way to learn more about cryptocurrencies, but we wouldn't suggest you quit your day job just yet.

So how do I mine altcoins?
The mining process involves writing a short script to run in the command prompt. It's only a few steps, which you muist follow exactly to ensure success.

First, select a currency to mine--you can find a list of the most active altcoins at CoinMarketCap. You can pick any coin you'd like (we chose Litecoin for this article), but the process will be virtually identical for any other coin.

Go to the homepage for the currency (Litecoin's site is at https://litecoin.org) and download the client, which allows you to store coins in a "Wallet" on your computer. Once the client is installed it will have to download the entire blockchain for the altcoin. You can join a mining pool before this process is done, but because you might need to run it overnight you should start now.

Before you start mining there are two important decisions to make.

To pool or not to pool, that is the question
The first is whether to mine solo or participate in a mining pool. When Bitcoin mining, payments aren't received in a steady, gradual flow. Instead, they're given out in big chunks when particular milestones are hit, to whoever hits those milestones. If you're not running a bunch of super-fast mining computers, it's possible you'll never be the one to hit the milestone and receive the payment.

In a mining pool, many users join forces to mine as a group, and all reward payments are split up among the group, according to how much computing power they've been contributing. This streamlines the reward structure and makes your payments more reliable. You can choose to mine solo, but for anyone just getting into altcoin mining, a pool is a better choice--especially if you're not mining with a room full of powerful PCs. The rest of this guide will assume that you're mining in a pool.

 

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