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.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.Litecoins, Dogecoins, and Feathercoins are three Scrypt-based cryptocurrencies that are the best cost-benefit for beginners.At the current value of Litecoins, a person might earn anywhere from 50 cents to 10 dollars per day using consumer level mining hardware.Dogecoins and Feathercoins will yield slightly less profit with the same mining hardware but are becoming more popular daily.Is It Worth It to Mine Cryptocoins?As a hobby venture, yes, cryptocoin mining can generate a small income of perhaps a dollar or two per day.In particular, Litecoins, Dogecoins, and Feathercoins are very accessible for regular people to mine, and a person can recoup $1000 in hardware costs in about 18-24 months.As a second income, no, cryptocoin mining is not a reliable way to make substantial money for most people.

The profit from mining cryptocoins only becomes significant when someone is willing to invest $3000-$5000 in up-front hardware costs, at which time you could potentially earn $50 per day or more.Now, there is a small chance that Litecoins, Dogecoins, or Feathercoins will jump in value alongside Bitcoin at some point.Then, possibly, you could find yourself sitting on thousands of dollars in cryptocoins.Note: the emphasis here is on 'small chance', with small meaning 'slightly better than winning the lottery'.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.How Cryptocoin Mining WorksThis 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:Provide bookkeeping services to the coin network.Mining is essentially 24/7 computer accounting called 'verifying transactions'.Get paid a small reward for your accounting services by receiving fractions of coins every couple of days.Keep your personal costs down, including electricity and hardware.The Laundry List: What You Will Need to Mine CryptocoinsYou will need 10 things to mine Litecoins, Dogecoins, and/or Feathercoins.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.A free mining software package made up of cgminer and stratum.A membership in an online mining pool, which is a community of miners who combine their computers to increase profitability and income stability.Membership at an online currency exchange, where you can exchange your virtual coins for conventional cash, and vice versa.

A reliable full time internet connection, ideally 2 megabits per second or faster speed.A hardware setup location in your basement or other cool and air-conditioned space.A desktop or custom-built computer designed for mining.Yes, you may use your current computer to start, but you won't be able to use the computer while the miner is running.A separate dedicated computer is ideal.Tip: Do not use a laptop, gaming console or handheld device to mine.These devices are not effective enough to generate income.dogecoin value 1 dollarAn ATI graphics processing card (GPU) or a specialized processing device called a mining ASIC chip.litecoin strategyThe cost will be anywhere from $90 used to $3000 new for each GPU or ASIC chip.coinbase api

The GPU or ASIC will be the workhorse of providing the accounting services and mining work.A house fan to blow cool air across your mining computer.Mining generates substantial heat, and cooling the hardware is critical for your success.Personal curiosity.You absolutely need a strong appetite for reading and constant learning, as there are ongoing technology changes and new techniques for optimizing coin mining results.The most successful coin miners spend hours every week studying the best ways to adjust and improve their coin mining performance.litecoin pool mining chartWhy Not Mine Bitcoins?If you had started mining Bitcoins back in 2009, you could have earned thousands of dollars by now.list litecoin poolsAt the same time, there are plenty of ways you could have lost money, too.Now, Bitcoin mining is reserved for large-scale operations only.bitcoin difficulty in may 2014

Over the past five 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 good third option that is gaining traction.litecoin symbolOver the past year Litecoin has solidified its place alongside Bitcoin as a viable digital currency.mises institute bitcoin

Accompanying increasing prices has been a deluge of new miners hoping to help run the Litecoin network and earn some coins.Traditionally Litecoin mining has been more efficient with Radeon GPUs, but recent improvements in mining software for NVIDIA cards has significantly increased their efficiency.No longer is cryptocurrency mining with graphics cards the sole territory of AMD/ATI/Radeon.So for all you NVIDIA card owners, here’s your guide to mining Litecoin with NVIDIA graphics cards on Windows as well as a brief overview of cryptocurrency mining.bitcoin solo setupIf you’re brand new to Litecoin and don’t yet have a Litecoin wallet I’d suggest checking out our guide to Getting Started With Litecoin.It provides an overview of Litecoin and a guide to setting up a wallet.Also note that the following guide and mining software is compatible with other Scrypt based cryptocurrencies such as Feathercoin, Dogecoin and Worldcoin.

If you want to get started as quickly as possible with mining then skip ahead to the Installing GUI Miner Scrypt section.Litecoin mining is the process of using your computer’s resources in order to help run the Litecoin network.Like most cryptocurrencies, Litecoin is initially distributed through block rewards, where miner’s get a certain number of Litecoins by solving a certain amount of cryptographic work.Originally mining could be done individually, referred to as solo mining.However, over time it became too difficult to do individually as the probability of finding a block solo mining became very low.This led groups of miners to develop what is referred to as pool mining.Today nearly all miners use pool mining, where they mine in groups resulting in steadier payouts.Originally Bitcoin was mined solely by CPUs (Central Processing Units).The original Bitcoin client included a CPU miner that beginners could use to solo mine.Eventually programs were developed that allowed users to mine with their computer’s GPUs (Graphics Processingi Units).

GPUs offered much faster speeds than CPUs.Following GPU mining came the development of specialized hardware such as FPGAs (Field Programmable Gate Arrays) and ASICs (Application Specific Integrated Circuits).Litecoin’s original design was intended to prevent GPU mining and did so by using the memory intensive Scrypt hashing algorithm as opposed to the SHA-256 algorithm used by Bitcoin.Eventually mining programs were developed for GPU mining Litecoin, though the difference between CPU mining and GPU mining remained smaller with Litecoin than it had been with Bitcoin.While there is at least one company that has announced they’re developing specialized mining hardware for Litecoin, no one has actually demonstrated a working product yet.Today Litecoin mining is dominated by GPU mining rigs and has recently become a more profitable endeavor than Bitcoin mining.Until recently GPU mining with NVIDIA graphics cards was much less efficient than mining with AMD/Radeon graphics cards.However, a recent rewrite of some of the software involved with NVIDIA mining has lessened the gap.

While Radeon cards still offer higher hash rates, NVIDIA cards are generally easier to tune.If you’re looking to build a fast, high end mining rig then Radeon is still the way to go.If you already have a decent NVIDIA card then the following guide will help you get started mining Litecoin.GUI Miner Scrypt Versus CUDA Miner This tutorial covers two mining programs.CUDA Miner is a command line program, meaning you have to use the command line in windows to run it.GUIMiner Scypt has a graphical user interface that runs CUDA Miner for you, which is easier for many people.I’ll be covering GUI Miner Scrypt first, though CUDA Miner is covered later.If you’re comfortable with the windows command line I suggest you use CUDA Miner.GUI Miner Scrypt currently does not output your hash rate, or mining speed, due to a small programming issue.Thus you’ll get more feedback, and it will be easier to debug, if you use CUDA Miner.The latest version of CUDA Miner is also considerably faster than the latest version of GUI Miner Scrypt.

You’ll need to download a couple of things in order to start mining Litecoin with your Nvidia GPU.For this portion of the tutorial we’ll be focusing on GUIMiner Scrypt, though you’ll need the same programs for CUDA Miner.In order for GUIMiner Scrypt to function correctly you’ll need to update your drivers directly from NVIDIA.If you’re looking to build CUDA Miner from source you’ll need the developer’s toolkit listed below.NVIDIA Graphics Card Drivers (Mandatory) NVIDIA CUDA Developer’s Toolkit (Optional) Once you have the latest drivers downloaded and installed then go ahead and download GUIMiner Scrypt from Mega at the the link below (See this Bitcointalk thread for further details on GUIMiner Scrypt or to donate to its developer, TacoTime).Download GUIMiner Scrypt From Mega V0.04 Once you’ve downloaded GUI Miner Scrypt you’ll have to set up an account at a mining pool., a prominent Litecoin mining pool which incorporates several modern pool mining features and has several servers located worldwide.

We’ll also be using their mining proxy program, which makes it a bit easier to setup your mining program.Make sure to record you login credentials or choose something you can easily remember.You’ll need them to manage your account and to receive the Litecoin that you mine.Once you’ve created and recorded your account you’ll need to setup a worker by navigating to My Account -> My Workers.You can setup multiple works for multiple miners, but for this tutorial you’ll just need one.You’ll also need to download their proxy program, which makes setup a bit easier and can make mining slightly more reliable and efficient for you. (Mandatory) First off go ahead and double click on stratum_proxy.exe in order to get it running, you should see something like the below window pop up.Once the proxy is up and running then you can open up GUI Miner Scrypt.You’ll need to setup your new worker, so go to File -> New Miner -> New CUDA Miner (Must be CUDA miner, other programs are not optimized for NVIDIA).

, it should look similar to the below screenshot.Once you have everything setup save your settings and then click Start.Because of a small issue, GUI Miner Scrypt will just continually say Starting in the bottom right hand corner.However, checking the proxy program should show you some activity.If you see activity similar to the below screenshot you should be good to go and hashing. via their web interface, though it can take up to 20 minutes to update and is an average over time, not exactly what speed you’re at at that moment.If you want better stats then I suggest trying out CUDA Miner from the command line, covered below.CUDA Miner is the command line program used for Litecoin mining with NVIDIA graphics cards.Since it is a command line program it’s not quite as beginner friendly.It works essentially the same as GUI Miner Scrypt but requires that you setup a configuration file or pass some arguments to it when it first starts.If this isn’t something you’re comfortable with then I suggest you stick to GUI Miner Scrypt.

Otherwise you can download the most recent version of CUDA Miner from the link below.Download CUDA Miner From MEGA (Mandatory) You’ll need to open up a command prompt and navigate to the folder containing CUDA Miner.Once in the folder with the version of CUDA Miner you need for your platform (x86 or x64), then run the following command, filling in your worker details.cudaminer.exe -o http://127.0.0.1:8332 -u Username.Workername -p password Here are my worker credentials for example cudaminer.exe -o http://127.0.0.1:8332 -y CryptoJunky.NVIDIA -p 12345 Once you’re up and running you should see something like the below screenshot.Mining speed is measured in number of hashes per second.For Litecoin mining, the most commonly used abbreviation is kh/s for kilohashes per second. to get an idea of how many Litecoin you’ll be earning based off of your hash rate.The newest version of CUDA Miner hashes considerably faster than the older version.At the moment, the newest version of GUI Miner Scrypt uses the older version of CUDA Miner.

For instance, using a EVGA GEFORCE GTX 660 for this tutorial, I managed to get around 127 kh/s with GUI Miner Scrypt, and about 174 kh/s using the most recent version of CUDA Miner.If you’re looking to get the fastest possible speed, try out the latest version of CUDA Miner or make sure to update GUIMiner Scrypt once a new version is available.Where To Go From Here One thing we didn’t cover earlier is that using the proxy program is not mandatory.You can connect to most pools directly by using a url they provide instead of a proxy and 127.0.0.1.Just follow the instructions your pool provides you for worker settings.At this point you should be mining Litecoin, congratulations!Once you get a little more comfortable with mining and cryptocurrencies in general you might take a look at Dustcoin or Coinwarz.These sites help to show which cryptocurrencies are the most profitable to mine at any given time.If you’re interested in adding GPUs you should check out the Litecoin Mining Hardware Comparison page in the Litecoin wiki.