2023-07-31clock5 minutes

Introduction: Litecoin Halving – Everything you need to know

Litecoin holds the distinction of being the original and renowned "altcoin," which signifies an alternative to Bitcoin. Its inception dates back to October 2011 when it emerged as the counterpart to Bitcoin, often referred to as "silver" alongside Bitcoin's status as "gold." As a result, Litecoin proudly stands as the second-oldest cryptocurrency that remains actively traded in the market.

Although Litecoin and Bitcoin bear several similarities, a prominent distinction lies in their mining algorithms. Bitcoin relies on SHA-256, demanding substantial computational power for mining, which often proves financially unattainable for the majority. Conversely, Litecoin employs the Scrypt algorithm, a much more resource-friendly option. This grants users the opportunity to mine Litecoin using their personal computers, efficiently and cost-effectively.

Similar to Bitcoin, Litecoin miners receive block rewards as compensation for validating new transaction blocks. Initially, in 2011, Litecoin offered a reward of 50 LTC for every newly created block. However, in August 2015, this reward was halved to 25 LTC. Following the most recent halving in August 2019, the reward further decreased to 12.5 LTC per block. As Litecoin approaches its upcoming third halving, the payout will be reduced once again to 6.25 LTC for each block validated.

So, in this blog we will be talking about Litecoins Halving, what it is and how it will affect prices and crypto traders.

What is the Litecoin halving?

Cryptocurrency miners play a crucial role in maintaining the efficiency of blockchains and ensuring prompt execution and recording of transactions. They dedicate their time and energy to serve as the backbone of the networks they support. In recognition of their significant contribution, miners are granted block rewards for successfully completing each new transaction block. These rewards serve as a form of appreciation for their essential work in sustaining the cryptocurrency ecosystem.

At regular intervals of every 840,000 blocks mined (equivalent to 1% of the maximum coin supply), the block reward given to miners undergoes a halving process. This strategic approach serves to decelerate the influx of new coins into circulation, effectively curbing inflation and fostering scarcity.

The underlying concept is to stimulate a rise in demand while simultaneously reducing the circulating supply. While the precise impact of halvings on cryptocurrency prices remains uncertain, their purpose is to uphold and enhance the value of a cryptocurrency over the long term. By implementing halvings, cryptocurrencies aim to maintain their value proposition and promote sustainable growth in the market.

What to expect from Litecoin Halving?

Halvings are highly significant milestones in the lifecycle of cryptocurrencies, attracting considerable attention and excitement. Just like the upcoming 4th halving for Bitcoin, scheduled around April 16, 2024, Litecoin halvings have historically sparked periods of volatility and price surges before and after the event.

Based on historical data, it is observed that LTC prices have followed a particular pattern around halving events. Typically, LTC prices tend to rally in the period leading up to a halving and experience significant gains. However, immediately after the halving takes place, there is often a sharp pullback in the prices.

For instance, during the first LTC halving, the coin reached its bottom point 122 days before the halving event. Subsequently, it rallied impressively by 820% in the lead-up to the actual halving.

Similarly, during the second halving, the coin's price hit its bottom approximately 243 days before the halving occurred. Following this low point, LTC witnessed a substantial climb of around 550% leading up to the halving.

Litecoin Halving dates and the next event

The first halving occurred on August 25, 2015 when the reward was reduced to 25 LTC. At that time the price of the coin was around $3. The next one as scheduled, took place on August 5, 2019 and the reward was halved once again to the 12.5 LTC.

The third one is going to occur on August 2, 2023 and the reward will be decreased to 6.25 LTC.

Conclusion: Litecoin Halving is going to greatly affect crypto industry

While Litecoin is one of the most used cryptocurrencies around the world, it’s important to monitor closely the halving process.

While you might not be the miner to receive the reward, which will be once again halve on August 2, it will affect the upcoming prices and the speed of transactions.