Jeremy Martinez is a modern day coin collector.He collects bitcoin and litecoin and luckycoin and zeitcoin and leafcoin and infinitecoin.Behind his living room television set, Martinez has set up 99 tiny USB devices, and each is equipped with a pair of custom-built computer chips.One chip is designed to mine bitcoin–the world’s most popular digital currency–and the other mines a raft of bitcoin wannabes.As these devices perform countless computations that help drive the worldwide internet software that runs these digital currencies, a pair of 6-inch tall, white, USB-powered fans buzz above the rows of mining chips, blowing cool air over the 150-watt system.It’s an impressive setup.But Martinez doesn’t do this just for kicks.In exchange for all those calculations, he receives some digital currency of his own.Last year, we wrote about the arms race to build customized bitcoin miners — number-crunching machines that process transactions on the bitcoin network and simultaneously compete to solve math puzzles, with the winning computer awarded a bonanza of digital currency.

Over the past year, the value of a bitcoin has jumped from $100 to $450, and as a result, the bitcoin mining game has become highly professionalized.But bitcoin isn’t the only digital currency headed down this road.Litecoin and other digital currencies are also experiencing an arms race of their own.The DualMiner USB system that Martinez uses is based on chips made by a company called GridSeed, which also sells mining computers based on the chip.But a number of other companies are working to offer new litecoin rigs.Bitcoin rig-makers Innosilicon and KnC Miner say they’ll soon be shipping litecoin rigs of their own, and a Los Angeles, California company called Hash Master has sold about 10,000 mining rigs over the past two months–all based on the GridSeed chip–and is readying new systems based on several new generations of custom chips, says Alon Peleo, the company’s owner.These systems are designed to process a different algorithm from the one used by bitcoin.It’s called Scrypt, and it also happens to be the same algorithm used by dozens of alternative currencies, including luckycoin, zeitcoin, and dogecoin.

“Dogecoin and litecoin are the leaders in Scrypt coin,” says Peleo.As new miners jump onto to the network, however, litecoin payoffs become rarer for folks like Jeremy Martinez.Litcoin mining is now about nine times as difficult as it was back in November.But there’s a bright side.All of this processing power also makes the currency’s network harder to take over.Both litecoin and bitcoin could fall victim to something called the 51 percent attack, which would let an attacker with control of more than half of the network’s processing power do things like send the same digital currency to two different addresses.bitcoin casino directoryThat’s why litecoin’s creator, Charlie Lee, likes to see the new chips, known as ASICs.mine litecoin on windows“Having ASICs come out to mine litecoin means that it’s really gotten to a point where it’s succeeded,” he says.tesla bitcoin mining

“Now litecoin is being protected by its own hardware.” But for Martinez, the extra difficulty has driven him and his army of dual-miners off of the litecoin network.Recently, his behind-the-TV mining rig was mining fedoraCoin and infinteCoin.He’s programmed it to make the sound of a cash register every time it mines a block, and every few minutes, an alert pops up on his screen and there’s be a pleasant “Ca-Ching!”sound coming from his computer.“I could just go and buy these coins, but it’s not as much fun,” he says.litecoin thread“Every time I see my little pop-up, it’s like I hit the jackpot on my slot machine.”ethereum slidesNumerous ASIC Scrypt Miners have already been purchased and their shipping dates are fast appropriating, but are these powerful mining machines worth their cost?litecoin gpu miner for windows

By now there’s a good chance you’ve already looked at purchasing yourself one or two asic scrypt miners to replace your CPU or GPU mining rig.If you haven’t you can learn more about them here.They’re less expensive, don’t take up near as much space and won’t send your power bill through the roof, but is it profitable?With the expected increase in difficulty for many of the altcoins out there, can you realistically expect any return on investment or will you end up with an expensive paperweight?bitcoin kurs chinaAre you better off purchasing altcoins rather than mining them?bitcoin news bitfinexWhat does Litecoins stagnating price yet increase in difficulty mean for miners?and litecoin rigThere are several questions you should ask yourself before purchasing your asic miner.

The first two questions are easy to calculate.Using a mining calculators – this one., a website that has useful features including a mining calculator and currency converter.If you plan on using a multipool you can expect slightly better numbers, but this is still a good place to being.Using these tools you should be able to calculate the amount of coins you expect to mine, and if you can expect a positive ROI.Assume you have $20,000 to invest in an asic scrypt miner and here are your specs.What are some of the variables you should consider?While you can’t know the answer to these questions, that doesn’t mean we can’t make some educated guesses and calculate estimated ROIs in several different scenarios.Using excel combined with a mining calculator I was able to produce these projections.If you haven’t turned a profit in four months, there is little chance you are ever going to.Setting the difficulty at 21772 gives time for your asic to be shipped, arrived and set up as many asics are still only preorders with promised shipping dates.

Looking at this chart, we can see that the mining difficulty will greatly determine how many coins you are able to mine, and so the question of ROI is that of difficulty increment and Litecoins value.In short, the graph confirms what we already know, but gives us some numbers to work.What can possible miners hope for then?Can you make money mining?Looking back on history, we can see that when asic mining came out for Bitcoin, there was a huge leap in the difficulty for awhile before leveling back out.The truth of the matter is that the difficulty can double, but it takes an equal amount of hasing power to be added for this to happen.It would take double the hasing power to increase for the difficulty to increase by double.The current network hash rate for Litecoin is 400,792 MH/s, or 400.792Gh/s and the entire scrypt base network hash rate is 1.573+ Th/s as of June 29th, 2014.A miner with 1.2G/h mining power would only represent a .0029% increase in difficulty for Litecoin, but a hundred of these units would be nearly a 30% increase in hashing power and a thousand of them would be near 300% increase.

It’s not crazy to think the entire network hashrate will double, and with multipools we can expect to see this hash rate divided among the most popular coins, with Litecoin taking a large portion of this – right now Litecoin makes up 25.477% of the total network hashrate.Yes, you can turn a profit, but with the imminent increase in difficulty, your profit is more than likely too small to make the risk worth it.At the current rate of Litecoin ($8.83USD) you could purchase 2265 coins with $20,000.That’s more than you’d expect to mine if the difficulty increased at a rate of 9% or even 8%.But let’s not forget mining is one of the best way to be apart of the system and that it is what keeps cryptocurrency decentralized and working.The best thing for investors is a mix of proof-of-work and proof-of-stake investing.In the end, you have to ask yourself two question.How much faith do you have in cryptocurrency and how risk adverse are you?Carter Graydon is not promoting nor invested in any ASIC Mining companies nor cryptocurrencies mentioned.