What do you need to know?

What do you need to know?

The third halving of Litecoin is officially 100 days away, whereby the event is expected to take place in Block 2,520,000 on August 2, 2023. However, the date can change due to the fluctuations in the Network rate.

halving is a mechanism in which the rewards that crypto miner get for the validation of transactions on a blockchain are halved. This happens to slow down the speed with which new units of a digital asset are created, which creates scarcity and the value of the asset is potentially increased in accordance with the principles of supply and demand.

By reducing the number of coins in circulation, the halving of inflation should counteract and promote a sustainable and stable growth course of the cryptocurrency.

The effect of the halving on the Litecoin network

The halving of Litecoin takes place every four years after 840,000 blocks, with miner receiving 50 % fewer coins than before. The blockchain has undergone two halving events since its introduction in 2011, and Miner is currently receiving 12.5 LTC as a reward.

The block mining rewards from Litecoin are reduced to 6.25 LTC with the upcoming halving event. When the Litecoin was created, Miner received 50 LTC, but after the first halving on August 25, 2015, with a block height of 840,000, the reward was shortened to 25 LTC. On August 5, 2019, the second halving at block height took place 1,680,000 and the reward was further reduced by half.

currently in the Litecoin network around 576 blocks are broken down every day, which creates 7,200 LTC. After the third halving, however, the daily LTC production is reduced to 3,600. As a result, LTC's offer rate will decrease, which may trigger an demand for investors. This could have a positive effect on the total value of the assets.

How will the third halving of Litecoin affect LTC?

A lot about the effects of the halving event on the price of Litecoin was speculated. While some members of the crypto community believe that the value of the asset will increase after the event, others believe that the halving will have no effect because it has already been praised.

The optimistic view of the halving event of Litecoin is rooted in the historical price trends of Bitcoin after his own halving, which also takes place every four years. Like Litecoin, Bitcoin is halved helps to lower the inflation rate and reduce the block rewards of the miners by 50 %.

In view of Bitcoin's dominance, his halves have led to considerable disorders on the market in the past. After halving Bitcoin in 2016 and 2020, the Rally's market experienced that many crypto-assets achieved new all-time highs in the following years.

on-chain data, however, show that the previous halving events of Litecoin have taken place failed to achieve the same effects. The LTC prices in 2015 and 2019 largely did not respond to the halving of the network. Before the last half of Litecoin decreased and after the event. Therefore, it is uncertain in which direction the price of Litecoin will move after halving.

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