Sunday, December 1, 2013

Litecoin Mining Part 1: Creating a Litecoin Wallet

I've been mining Bitcoins with a couple of ATI Radeon 6700's for about a year and a half.  It's not really profitable to continue mining Bitcoin with these, so I'm looking for something else I can do with them.  Yesterday, I spent some time working on it and figured it out.  I'm going to mine Litecoins.  Litecoin is an online cryptocurrency similar to Bitcoin.

My first step is to setup a LiteCoin wallet.

Get a Litecoin Wallet.

A Litecoin wallet is an address and a private key that let you send and receive litecoins.  The litecoin client is available at https://litecoin.org/.  The installer is very simple, and doesn't require any configuration.  When complete, there will be a LiteCoin icon on the start menu.  Run it.

When you first run the litecoin client it will create a new wallet for you and start downloading the "blockchain".  The blockchain is quite large and takes a couple of days to download.  This is normal.  You can continue setting up your litecoin miner while waiting for the download to finish.  You can still receive coins while the blockchain is downloading; The coins won't show up in your wallet until the download catches up.

If you don't want to use the local client, there are dozens of companies that offer online litecoin wallets.  To get a wallet you simply sign up.  I choose not to use an online wallet, as I trust my security a lot more than I trust some guy on the Internet.

Encrypt your Litecoin wallet.

Immediately after launching the litecoin client, encrypt the wallet.  To do this, open Settings -> Encrypt Wallet.  Enter a password you will never forget, re-enter it, and click okay.


Write this password down.  Human memories suck, write it down.  Forgotten coins are lost coins.

Create your "Receive Address".

A "Receive Address" is the address where people can send you litecoins.  To create one, click the receive arrow in the litecoin client.

Your first address is already created.  It's on the right.  This is the address you give people to send you litecoins.


Optional: If you want more than one address, you can use the "New Address" button at the bottom of the page.  You MUST update your wallet backup every time you add a new address.  I'm going to store my backup of this wallet in an inconvenient location, so I went ahead and added 10 addresses.  I've labeled these as "Unused".  This way I'll have extra addresses I can use for other things without having to dig up and replace my backup.



Backup your Litecoin wallet.

Backup.  Backup!  BACKUP!

Why do I reiterate this point so much?
http://www.electronista.com/articles/13/11/28/hard.drive.with.7500.bitcoins.lost.in.landfill/
This guy lost a "few" (million) dollars when he tossed the wrong hard drive out of a desk drawer.  Those coins are gone.  Forever.


Open your litecoin folder.  To do this, click Start -> Run and enter %appdata%\Litecoin\

Copy the wallet.dat file onto a USB stick or other removable device.  Put this USB stick and a written copy of the password somewhere safe.


Safe is loosely defined as a place unlikely to be affected by a tornado, earthquake,hurricane, theft, fire, or electronic failure at the same time as your main PC.  Your definition of safe will be different than mine based on the number of coins you expect to have and your risk tolerance/laziness ratio.

Side Note: If you plan on have a non-trivial amount of coins in your wallet, add a note to your will explaining what coins you have and where they are backed up. 


If this series of Litecoin posts is useful to you, let me know.  I'll be happy to do more.



Litecoin Donations: LQzRDLbMRfuxpqLYbR2TuwQAsufbtsobgg

No comments: