Charlie Lee sought to make Litecoin an easy-to-mine cryptocurrency with the implementation of the Scrypt algorithm.
Scrypt is a memory-hard algorithm that favors users to mine Litecoin using their home PCs and diminishes the power of ASIC rigs. However, through the years this situation has slightly changed, and large mining devices have been optimized for the Scrypt algorithm.
Mining is a process that requires computational power to solve complex mathematical puzzles. Once a puzzle is solved, a new block of transactions is verified and incentivizes the contributors (miners) with new Litecoins.
Mining is an expensive activity influenced by numerous parameters like electricity consumption, mining difficulty, and mining hardware investment. A prospective miner should always consider these factors and is strongly advised to consult one of the profitability calculators, which may be found online. Mining profitability varies based on location, hence purchasing Litecoins in the open market could be more sensible than mining them. There can be occasions that mining Litecoin may not be profitable at all.
Miners should always be aware that mining is a dynamic environment that could change in both directions, as more miners enter. Profitability is not guaranteed in the long-term, similar to mining hardware that could become obsolete and non-effective.
After these steps are followed, the setup is ready to start mining Litecoin. As mining pushes the hardware to its limits, a miner should always be careful that his/her system doesn’t reach high temperatures, which could reduce the hardware’s lifetime. Additionally, the miner should always follow up with the actual metrics to ensure that mining Litecoin is a profitable business.