Can Litentry LIT coins be mined?

Litentry's unique consensus mechanism, Substrate Proof-of-Stake, ensures network security, scalability, and energy efficiency, eliminating the need for traditional mining like Bitcoin or Ethereum.

Dec 31, 2024 at 09:29 am

Key Points:

• Litentry LIT coins cannot be mined traditionally like Bitcoin or Ethereum.
• LIT is an Ethereum-based ERC-20 token used within the Litentry decentralized identity network.
• Litentry uses a unique consensus mechanism known as "Substrate Proof-of-Stake" (SPoS) to secure the network.

Can Litentry LIT Coins Be Mined?

Litentry LIT coins cannot be mined using traditional methods like Bitcoin or Ethereum, which involve solving complex mathematical equations. Instead, LIT is an Ethereum-based ERC-20 token utilized within the Litentry decentralized identity network.

Steps on Acquiring LIT Coins:

• Purchase LIT on Exchanges: LIT can be bought and sold on various cryptocurrency exchanges, including Binance, Huobi, and OKEx.
• Participate in Liquidity Mining: Provide liquidity to decentralized exchanges (DEXs) like Uniswap and Sushiswap by staking LIT tokens in liquidity pools. This earns rewards in the form of additional LIT tokens.
• Secure Collator Nodes: Collators are responsible for collating transaction data in the Litentry network. Operating a collator node requires staking a significant amount of LIT tokens.

Substrate Proof-of-Stake (SPoS) Consensus Mechanism

Litentry employs a Substrate Proof-of-Stake (SPoS) consensus mechanism, a variation of Proof-of-Stake (PoS). In SPoS, validators are selected based on their staked LIT balance.

Stakeholders who wish to participate in the consensus process must:

• Have at least 1 LIT token staked.
• Run a Litentry node.
• Participate in the signature generation process.

Benefits of SPoS in Litentry:

• Security: The more LIT tokens a validator stakes, the more likely they are to be selected for block production, enhancing network security.
• Scalability: SPoS allows for parallel processing, increasing transaction throughput and reducing latency.
• Energy Efficiency: SPoS is significantly more energy-efficient than traditional mining methods.

FAQs:

Q: Why can't Litentry LIT coins be mined?

A: Litentry utilizes an SPoS consensus mechanism that does not require traditional mining.

Q: What is the purpose of LIT tokens?

A: LIT tokens are used for network governance, staking, and transaction fees within the Litentry decentralized identity network.

Q: How can I earn LIT tokens?

A: LIT tokens can be purchased on exchanges, earned through liquidity mining, or by staking to secure the network as a collator.

Q: What are the benefits of SPoS in Litentry?

A: Benefits include enhanced security, scalability, and energy efficiency.