The Litecoin Block Reward Halving Explained
While Bitcoin has gone through multiple forks over the year, one of the first was the fork to Litecoin. It will soon be going through its second halving process on August 6, 2019. This event occurs once 840,000 Litecoin blocks have been mined and rewards are cut in half for future miners. If you want to understand exactly what that means, we’ll share the details below.
What Litecoin Halving Is
Similar to Bitcoin, halving occurs with Litecoin after a certain amount of blocks have been mined. That means the rewards are halved, so miners only receive half what they did in the past. This is the second time this is occurring with this particular cryptocurrency and the rewards will be going from 25 Litecoin down to 12.5 Litecoin when the halving takes place at the beginning of August.
The First Litecoin Halving
The first time Litecoin was halved was four years ago on August 26, 2015. The cryptocurrency came out in 2011 and in 2015, the reward for mining block went from 50 Litecoin down to 25 Litecoin. Less than two months after this happened, the price of Litecoin shot up over 500%.
Before the first halving happened, Litecoin set the block reward high for a number of months. In addition, many of the investors speculated that prices would boom and made a lot of money off of the event.
The Upcoming Litecoin Halving
The next halving takes place very soon and many investors are counting on the price going up once again. This only makes sense as having a lower supply drives a higher price. However, it’s likely some miners will choose to leave the market due to having computers that can’t compete against others after the halving occurs. This leads to a decrease in difficulty and a price decline, so it’s hard to say where prices will go.
Changes in Litecoin Price
Whenever a new coin is created using mining, it adds selling pressure as miners need to pay for their living expenses and electricity bills. That means if there is not enough demand for the coin, the price can drop. When the halving happens to Litecoin, selling pressure will likely drop even if demand doesn’t. That means that it’s less likely that the price will drastically drop. The impact on pricing is also affected by the fact that the inflation rate drops after halving.
Impact on the Miners
As we mentioned, some miners will find exiting the market is best after the halving. This is something that happened the first time Litecoin was halved. This can affect anyone, even owners of mining pools. When the coin has a high value, people hurry to buy the best machines to mine the crypto. The halving makes it harder to become profitable mining Litecoin and time to profit changes.
Are you ready for the halving to Litecoin? Whether a miner or investor, it’s worth considering the possibilities and what might happen in the future. You never know, there may be money out there waiting for you.