Litecoin is one of the earliest forks of Bitcoin, which is going to go through its second halving process, wherein the Litecoin halving date is scheduled for August 6, 2019. Litecoin Halving event happens after 840,000 LTC blocks are mined and the miner rewards are cut into half. In order to understand a particular set of things that dictate how much of Litecoin would be released, and how and when the supply is reduced overtime, leading to a phase where no new Litecoins will be released.
Just like Bitcoin, Litecoin goes through the halving method every 4 years after 840,000 LTC blocks are mined and the miner reward gets halved or becomes 50% lesser than before. This time is the second time this event is taking place, and the miner reward will decrease from 25 LTC to 12.5 LTC at the respective time it’s happening.
Back in 2015 on August 26th, the first LTC halving process took place since its inception in October 2011. At that time, the block reward dropped from 50 LTC to 25 LTC. After 48 days of the halving, Litecoin skyrocketed by over 500%.
Litecoin is going to undergo the halving process in August 2019, which is just a couple of months away. As we know, a decrease in supply leads to high price, hence many investors will price in the block reward event predicting that its supply might fall in the future. Some miners might exit the market when they realize their computing power can’t compete with others. When they exit, the difficulty decreases and price tends to decline.
Click here to watch the Litecoin Halving 2019 detailed video
At present, the miners mine one LTC every 2.5 minutes and receive 25 LTC as a block reward, which is going to get halved in another two months. Some of the factors which would get affected are the miners, the users and the price by default. A breakeven cost is when the miner’s profitability can cover only his own cost. So, when Litecoin’s price falls below the breakeven point, the miner is bound to suffer losses. (LTC Halving 2019)
Whenever new coins are generated by mining, it tends to have that selling pressure as the miners need to cash out to pay salaries and electricity bills. So, the price of Litecoin can go down if there’s not enough demand. When the reward is halved, the selling pressure will be lesser, so if the demand doesn’t change, the probability of the price falling will be lower. Even the inflation rate reduces drastically after halving, hence the impact on pricing.
When the computational power increases, the miners would find it difficult to compete and eventually exit. Similar kind of mining adjustment problem happened last time Litecoin underwent halving. Even the mining pool owners get affected by this. When LTC has high value, the pool owners and the retail investors scramble to buy the machine and vice versa. Moreover the halving would cause the profitability of Litecoin mining smaller and the time for profit more uncertain.
The halving would by default, have an effect on the fees or usability and the common things generally worried about is delay in transactions and unfavorable fee recommendations.
This is the Litecoin halving countdown box, where you can track the Litecoin halving date and time here.
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2019-05-03 13:11:31.925367 | 2 min
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