How to Mine Litecoins and Dogecoins

Mining Cryptocoins: a Beginner's Guide
Mining Cryptocoins: a Beginner's Guide.


Mining cryptocoins is an arms race that rewards early adopters.  It is very much a digital gold rush where people can make a small profit by investing a few hundred dollars in equipment, and then putting in months of mining time before the enforced difficulty 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 can earn 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.

Is It Worth It to Mine Cryptocoins?

As a hobby venture: yes, cryptocoin mining can be a really interesting hobby with a small income of perhaps a dollar or two per day. In particular, Litecoins and 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 you are willing to invest $3000-$5000 in up-front hardware costs, at which time you could then earn $50 per day or more.

Granted: there is a small chance that Litecoins / Dogecoins / Feathercoins will jump in value by 2016, at which time 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 Works

The tutorial that follows 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 or Dogecoins or Feathercoins.

The whole focus of mining is to accomplish three things:

1) Provide bookkeeping services to the coin network. Mining is essentially 24/7 computer accounting called 'verifying transactions'.

2) Get paid a small reward for your accounting services by receiving fractions of coins every couple of days.

3) Keep your personal costs down, including electricity and hardware.

The Laundry List: What You Will Need to Mine Cryptocoins

You will need 10 things to mine Litecoins / Dogecoins / Feathercoins.

1) 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.

2) A free mining software package made up of cgminer and stratum.  More software details will follow.

3) A membership in an online mining pool, which is a community of miners who combine their computers to increase profitability and income stability.

4) Membership at an online currency exchange, where you can exchange your virtual coins for conventional cash, and vice versa.


5) A reliable full time internet connection, ideally 2 megabits per second or faster speed.

6) A hardware setup location in your basement or other cool and air-conditioned space.  

7) 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.  Do NOT use a laptop or gaming console or handheld device to mine, as those devices are not effective enough to generate income.

8) The expensive part:  an ATI graphics processing card (GPU) or a specialized processing device called a mining ASIC chip.

 The cost will be anywhere from $80 used to $600 new for each GPU or ASIC chip. The GPU or ASIC will be the workhorse of providing the accounting services and mining work.

9) Recommended: a house fan to blow cool air across your mining computer.  Mining generates substantial heat, and cooling the hardware is critical for your success.

10) 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. 

Why Not Mine Bitcoins?

If you started mining Bitcoins back in 2009, you would have earned thousands of dollars by now. Alas, Bitcoin mining is now reserved for large-scale operations only.  Over the last 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 BTC with your regular money, and tucking them away in the hopes they 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.

Next: how you could lose money mining cryptocoins...