Posts Tagged ‘Litecoin (LTC)’

Litecoin Network Difficulty Still Rising Seriously

9, Jul 2014

litecoin-network-difficulty-on-the-rise

With the shipment of more and more Scrypt ASIC miners the network difficulty is still on the rise and the percentage it increases at each difficulty readjustment is increasing as well. At the same time the price of the Litecoin remains under $8 USD with the most likely reason being that there are more sell orders and buy orders due to new miners willing to get as fast as possible ROI of their ASIC mining hardware. As a result these people mine LTC and sell it immediately and thus the exchange rate is going down and people start panicking about the future of Litecoin. This also makes more and more people rethink their plans for purchasing, especially on pre-order, new Scrypt ASIC miners.

What you can do to actually get better profit mining LTC and at the same time help in bringing the exchange rate up and not down is to mine in multipools such as LTC Rabbit and Coin King and others where you mine the most profitable Scrypt coin and can get payments in Litecoins. This helps LTC in a way that you are usually getting slightly higher profit than directly mining for Litecoins and the miner altcoins are sold for BTC and the earnings in BTC are used for purchasing LTC. This creates more buy support for the Litecoin, though it might not be as good for other alternative Scrypt crypto currencies such as DOGE that is suffering quite a lot because of this mining method used by multipools. Do note however that mining in a multipool does not always mean you will be getting better profit as often the pool might be mining directly for LTC if there is no more profitable alternative crypto currency.

Litecoin Difficulty vs Litecoin Price in the Last Month

3, Jul 2014

litecoin-difficulty-graph

In the last month or so we have seen a steady increase in the network difficulty of Litecoin, the second biggest crypto currency at the moment after Bitcoin, in terms of market capitalization. This is direct result from more and more Scrypt ASIC miners being shipped to customers by companies such as Gridseed, Zeus and Innosilicon, even though most of the GPU miners have already moved to other crypto algorithms that do not yet have ASICs such as X11, X13 and others. What we are essentially seeing is centralization of the Scrypt mining hashrate in the hands of larger miners and mining farms, even though there are still quite a few small miners that have purchased some of the more affordable Gridseed and ZeusMiner Scrypt ASIC miners. In fact, what is getting more attractive for the normal small time miner are the services offering to host miners or even for cloud mining, as these cloud be easier to calculate and are more predictable over the long term and most of all no delivery times, extra cost and having to manage and monitor hardware all of the time. Unfortunately there is yet not enough competition like in the Bitcoin cloud mining segment for such services, so the price and features offered to customers are not yet that great, but hopefully we are soon going to see some more advancement in this field as well.

litecoin-price-graph

At the same time, with Litecoin getting harder to mine because of the increase of the network difficulty, what we are seeing is also a decrease of the price instead of increase. Interestingly enough, up until recently, Litecoin’s price was reacting pretty much the same way as Bitcoin’s, so it went up and down as the price of BTC increased or decreased, but that is not happening anymore. If this is a good sign or not is still early to tell, but since LTC is not yet as established as Bitcoin and the hardware manufacturers, especially the companies making ASIC miners may still see LTC as an extra source of income, apart from their sales of mining hardware, by mining in their own mining farms and dumping coins on the market instead of using some of their profits in order to support the crypto currency to be able to sell more hardware. As the moment with the current prices of most Scrypt ASICs and the performance they offer it is hard to decide to invest in them or not, especially when knowing that in a month or two there will be much more powerful solutions starting to hit the market, products that will seriously increase the network difficulty.

Furthermore, apart from LTC (number two) and maybe DOGE (currently number 7 in terms of market cap), there are no other more established and serious in terms of market capitalization Scrypt-based crypto currencies among the top 20. Feathercoin (FTC) is the closest one that takes the third place in terms of market capitalization among Scrypt crypto currencies in 23rd place at the moment, but it is much smaller than DOGE, let alone LTC. Then there is Karmacoin at 26th place, however the team behind this coin has already announced plans to move away from Scrypt, CureCoin at 27th place, PotCoin is 28th and a few others close by. There are also not a lot of new Scrypt-based coin launches happening lately, with maybe only Razor being a more interesting recent launch. So what will be the near future of Litecoin and other Scrypt currencies, it is still hard to predict, but we are still remaining positive about it and hope to see more decentralization of the network, instead of centralization as that is never a good thing in the world of crypto currencies.

Scrypt ASIC Prices Still High in the Current Market Situation

3, Jun 2014

gridseed-g-blade-chips

As more and more Scrypt ASIC manufacturers start shipping their products or are close to the announced shipping dates, the people are busy considering if it is really worth investing into that mining hardware or they should just move forward to new GPU mining options. Let us face the truth, with the current market situation, the price of the Litecoin (LTC) remaining pretty low, but quite stable lately, if you buy a Scrypt ASIC for mining LTC and do the math with the current prices and hashrates you will not like the result. The time to break even with the smaller Scrypt ASICs ranges from never to an year or two maybe and only the top-end $10K USD systems that are supposed to start shipping in a month or two may eventually manage to get you a quicker ROI. Mind you there are no guarantees with them as well as there are many factors that may influence the market while you are waiting for your pre-ordered hardware to arrive at your doorstep. There is even the chance that Alpha Technology and KnCMiner, among others that have not yet started shipping, would not be able to deliver what they have promised in terms of specifications. We’ve already seen such an example with Zeus as their ZeusMiners that are consuming much more power than what was initially announced, according to the people that already have received their hardware. So even if the calculations seem fine at the moment when you get your pre-ordered Scrypt mining hardware, they might not be as good as the current situation. With Scrypt ASICs and in general with ASIC hardware you should be ready for the worst and hope for the best…

Let us give you a real world example, let us say we have an option to get a Gridseed G-Blade currently being sold for $615 USD (a very attractive price actually) that offers 5.2 MHS hashrate at 140W power usage. Then we also have an option for a 13 MHS GAW Black Widow, based on Zeus ASIC chips, that uses 520W of power and costs $1,799.95 USD. And a third option for an 24-28 MHS A2Mini Miner, based around Innosilicon A2 ASIC chips, using only about 250W of power. If we are to reach the same hashrate of the Black Widow we would need 3x G-Blades (15 MHS) and we are going to have 420W of power usage for a price of $1845 USD. So for just a few dollars more we are going to get 3x Gridseed G-Blade miners that will provide 2 MHS more of hashrate, consume less power and we are not going to have to wait for them to be ready for shipping. Next up 5x G-Blades totaling around 26 MHS hashrate with 700W of power usage will cost us about $3075 USD, while the 24-28 MHS A2Mini with 250W of power usage will cost us $3900 USD. There is a higher power usage for pretty much the same hashrate, but we are going to be saving over $800 USD if we go for the already available for a while Gridseed G-Blades.

What is wrong with the above example, is the Gridseed G-Blade just too cheap or the other Scrypt ASIC miners are just too expensive, so that we can get similar or even better results with the Gridseed hardware? The price of about $615 USD is just about right for what the G-Blade currently offers, so it seems that the other ASIC manufacturers are trying to maximize their profits, but by doing that they may be driving away customers. If the ASIC business is working as it should be, when you do the math and are going for a more powerful ASIC hardware in terms of hashrate, it should be more attractive price wise and not the opposite, so if you have the money you would consider to go for the bigger and more powerful systems. Apparently this is not happening at the moment and as a result more and more potential customers are deciding against investing in expensive Scrypt ASIC hardware. What companies making Scrypt ASIC hardware should do is not to keep trying to maximize their profit while they can, as apparently they cannot do that anymore, but instead have to try to provide products at prices that will be attractive for the mass of people that are mining crypto currencies. The 300 MHS KnC Titan may sound great, but not many typical small miners are able to pay $10K USD for, we actually need more smaller and affordable Scrypt ASIC miners, so that more and more people will use them in order not to centralize the hashing power in just a few big mining farms. We need to have a lot of people mining and using LTC and other Scrypt crypto currencies if we want to have them survive and develop further, otherwise Litecoin and Scrypt can just die and be replaced by new GPU mineable crypto currencies such as DarkCoin for example.

What we are already seeing is that a lot of miners using GPUs are no longer mining Scrypt crypto currencies, and are moving to other alternatives. X11 and more specifically DarkCoin (DRK) has recently surpassed the price at which Litecoin is being traded at. This, along with the fact that there are almost no new Scrypt crypto currencies being launched anymore, is a serious signal that the mass of miners is already not so interested in Scrypt crypto currencies. The reason for that are of course the Scrypt ASICs and if the business model of the companies making these does not change in the right direction, then some companies might be out of business before they even have products ready for shipping. If you believe in the future of Litecoin and other Scrypt crypto currencies, what you can currently do is to buy the coin on an exchange and wait for its rate to get higher in the future instead of buying a Scrypt ASIC and hoping that you would be able to mine more than what you have paid for the hardware in a reasonable amount of time. With the current prices for most of the Scrypt ASIC hardware, investing the same amount of cash directly for buying the coin could be more profitable than to spend your money for ASIC miners. After all what makes a crypto currency is the community behind it, the larger and more active in mining and using the crypto the community is, the better it is for the coin on the long run. And with all of the currently released and upcoming expensive Scrypt ASIC miners, things may start to get more and more centralized and the community to start getting smaller and smaller, and that is precisely what most of the crypto currencies are trying to avoid.

So we do not need only $10K ultra powerful Scrypt ASIC miners that will go to just a handful of people and will be used in big mining farms – really making a lot of money mining with them. We need more affordable solutions that still offer a decent return of investment in reasonable time, so that more and more people could continue using Litecoin and other Scrypt crypto currencies. Because even if only a few people mine most of the Litecoins, there should still be somebody interested in buying them in order for the whole thing to be worth it, but what happens if there is nobody interested in buying? And a direct comparison with Bitcoin and when the first SHA-256 ASICs started appearing is not not a good example, because now there are way more people mining and way more alternatives available, and while Bitcoin is already here to stay we cannot say the same thing for Litecoin and the many other Scrypt currencies. There are already a lot of other non-Scrypt based alternatives available, and people are already turning to them, so something has to be done by the Scrypt ASIC manufacturers in order for them to have business in the future. Making a big profit quickly by selling expensive hardware and not investing back to further develop the crypto community is clearly not the way that things should be happening, or you are not going to be able to do it for long.


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