- After every 840,000 blocks, every four years, the reward for mining Litecoin is halved.
- Since its inception in 2011, the blockchain has seen two halving events.
On August 2, 2023, at block 2,520,000, Litecoin will undergo its third halving. However, changes in the network’s hash rate may need a new target date. The goal of this halving is to slow the rate of inflation and promote a more steady development of the cryptocurrency by lowering the total number of coins in circulation.
After every 840,000 blocks, which happens every four years, the reward for mining Litecoin is halved. Since its inception in 2011, the blockchain has seen two halving events, with miners now being rewarded with 12.5 LTC.
Miners Reward Halved
The term “halving” refers to a technique that halves the reward for confirming crypto-mining transactions on a blockchain. In order to increase the value of a digital asset in accordance with the laws of supply and demand, this is done by reducing the pace at which new units of the asset are generated.
With the impending halving event, the Litecoin block mining reward will be halved to 6.25 LTC. The original mining reward for Litecoin was 50 LTC, however, this was halved to 25 LTC on August 25, 2015, at the block height of 840,000. The second halving happened at block height 1,680,000 on August 5, 2019, cutting the payout in half again.
Every day, the Litecoin network generates around 7,200 LTC by mining 576 blocks. The current daily output of LTC is 9,000, however, after the third cut that number will drop to 3,600. This will slow the pace at which LTC is being produced, which may cause an increase in demand from traders and investors. This may increase the value of the assets as a whole.
Increasing Active Addresses
Address activity on the Litecoin network has increased dramatically during the last several weeks. In addition to an increase in LTC transactions, the number of smaller wallets has also increased.
Litecoin [LTC] got swept up in a surge of bustling active addresses once it announced the LTC20 token standard. Santiment reports that the number of 24-hour active addresses increased from a disconcerting 200,000 on May 2 to 900,000 by the end of the eighth day.
The LTC online community responded with passionate debate. According to Santiment, the number of active addresses and tiny wallets capable of storing up to 0.001 LTC have both been on the rise. The number of “active” addresses for a currency represents its amount of user engagement. The number of transmitting and receiving wallets is used to calculate this.
Halving Impact on Price
The price of Litecoin has been the subject of considerable conjecture since the halving occurrence. Few experts predict that the asset’s value will rise after the halving, while others argue that the event will have little effect since it has already been included in market prices.
A positive perspective for Litecoin’s halving event may be traced back to the market movements of Bitcoin after its own halving event, which also occurs every four years. Bitcoin’s halving, like Litecoin’s, helps lower inflation and reduces miners’ block rewards by half.
Given Bitcoin’s prominence, its halvings have often resulted in substantial market fluctuations. Many cryptocurrency assets had significant price increases in the years after Bitcoin’s halving in 2016 and 2020.
On-chain information, however, suggests that earlier Litecoin halving occurrences have not had the same results. The network’s halving has no effect on LTC prices in 2015 and 2019. As a result, post-halving, the path of Litecoin’s price movement remains skeptical.