Cgminer setup wallet update#

Initially, the reward was 50 LTC per block, but using the halving concept, the reward keeps dropping after every 840,000 blocks (taking roughly four years). Every miner who successfully solves the equation and creates a block is given a block reward in the shape of new LTC tokens. Unlike fiat currency, where central banks can print and issue as many bills as they prefer and create devaluation of the currency, the limited numbers of LTC mean that over time as demand increases, the simple rule of economics comes into play (supply vs demand), thereby ensuring deflation.Īt the same time as demand increases, Litecoin supply also dwindles. The limited amount of LTC is a crucial factor. Litecoin Mining LimitationsĪn early fork of Bitcoin, Litecoin still works on the deflationary principle (albeit with a higher limit of 84 million coins that can ever be created) and a faster block time of 2.5 minutes in comparison to the 10 minute average of BTC. At the same time, the hashrate increases, and so does the competition to solve the cryptographic problems first, requiring more and more energy leading to more decentralisation. The more miners there are, the more secure the network. They are compensated through the block rewards, serving both as a means of paying for their efforts and incentivising them to keep running the mining operations for network integrity and to guard against illegitimate entries. Since LTC works on the PoW principle, the miners have to expend a lot of energy running their computers to solve mathematical problems. If this happens, the network automatically rejects the transactions and blocks, thereby ensuring that there is only one chain and the whole ecosystem is secured against fraudulent transactions. This creates an immutable record, showing that the transactions are already done, and another block should not contain these.

Cgminer setup wallet update#

To solve this, each batch of the transaction is time-stamped before being broadcasted on the network for other miners to update their ledgers. This means that more than one miner can add the same block and that would lead to more than one recording of LTC transactions, or double-spending. Since there are a lot of miners vying to be the first to solve the cryptography and create a block, more than one can achieve it in a given time. They confirm all transactions through PoW and therefore ensure that double spending is not possible. Miners are the backbone of any blockchain network and as such, they are the ones that not only secure the Litecoin network but are also progressing the chain. The problems are solved with computers, and as such, the energy and time spent are a testament to the efforts of the miner therefore, this process is called Proof of Work (PoW). In this process, anyone who solves the problem receives a block reward of newly minted LTC. Using PoW, Litecoin allows anyone to solve complex mathematical problems to note down the transactions made by users and create new blocks. Litecoin, as a decentralised cryptocurrency, does away with the centralised authorities and uses miners to run the ledgers, transactions, and the creation of new coins. The transmission is controlled through other banks, which note down the transactions in their ledgers. In traditional monetary systems, the creation and issuance of newly minted money and bills are controlled through a central authority, referred to as Central Banks. After reading this, you will have a clear understanding of what it is, and you can get started with mining Litecoin. Let’s get down to understanding mining in a bit of detail.