tl;dr – If you think Bitcoin is an interesting concept, at least in theory, consider a new fork of it, and start mining … this Wednesday/Thursday.
Interpret this graph as you wish, Bitcoin has risen X5 in the last 6 months (I still think it will continue to rise, despite the price decline in the last few months).
LiteCoin is extremly similar to Bitcoin. It also has a pre-set limit on the number of coins (84 million). The generation rate halves every four years, just like Bitcoin.
Its major feature, at least IMO, is that it’s fair:
- By now, a lot of people have at least heard of Bitcoin (certainly the readers of this blog), so they won’t take so much time to digest the idea. If you decide not to buy/mine, that’s fine, but it won’t be because you’re not aware of it.
- There are no per-mined coins, unlike some other alternative chains.
- You can actually mine them! When I learned of Bitcoin, I was disappointed to learn that they’re very difficult to mine. They require dedicated GPUs, which the official client did not support. Mining them wasn’t impossible, but it was much too complex, and simply wasn’t worth it for almost everyone that encountered them at this stage. Buying them was much more lucrative (for me, at least).
- LiteCoin uses scrypt, which cannot be run well on GPUs, and is intended to be “CPU friendly”.
- Windows binaries are already availble (on testnet, not functional until the release date) – you can prepare in advance, and don’t have to race other people to start mining first.
LiteCoin might succeed, and it might fail – just like Bitcoin. While I might buy some in the future (after an exchange starts trading in them), for now I’ll be content to mine them, starting either this Wednesday or Thursday. It’s dead simple – just download the client, and run it on your spare CPU cores. You can run it on a low priority, so it won’t boggle down your day to day work.
There is one issue – botnets. If this turns out very profitable, it’s possible botnets will use the infected hosts to mine LiteCoin. Still, it remains to be seen whether this will be a major impact or not. Not that even today some botnets mine Bitcoins with the GPUs of their infected host.
I find the very fact I can actually generate money on my computer exciting. It will not be worth a lot at first, but its value might appreciate, like Bitcoin did. I invite you to join the experiment and try it out for yourselves.
Important note – don’t run the miner without making sure your CPU is properly cooled. Even though summer is just ending, the core will run at 100% X how many threads you run. It should be ok as long as your computer case is properly ventilated.
P.S. – to premept any comments in the style of “Bitcoin is a scam”, please read Is Bitcoin a Ponzi Scheme? before posting. The same reasoning applies identically to LiteCoin.