HomeCryptoAltcoinThe Litecoin (LTC) Halving was a success: all the details

The Litecoin (LTC) Halving was a success: all the details

A few minutes ago, the famous Litecoin halving  finally took place, leading to the reduction by half of the reward for each mined block destined to miners. Initially scheduled for August 6th, 2019, the date of halving has been anticipated in recent weeks due to the growing hashrate of the litecoin network, which has contributed to significantly shortening the average time per block. The halving was scheduled at the 1,680,000th block.

The average time per litecoin block, in fact, is usually set at 2.5 minutes, but in the last weeks and months, the sudden growth of the network hashrate momentarily lowered the block time to 2 minutes and 10 seconds, thus anticipating by almost one day the date of the halving foreseen last May 2019.

With the last block mined before the halving of the reward, 75% of the total litecoin available was issued in circulation, equal to 63 million out of a total of 84 million LTC.

Litecoin Halving occurred: inflation cut by half

One of the most important consequences of halving is certainly the reduction of inflation, caused by the reduction in the number of new coins mined by the miners by half. Prior to halving, in fact, for each mined and validated block, the miners received 25 LTC which, multiplied by an average of 576 blocks validated every day, meant 14,400 new litecoins issued daily.

At the current price of 95 dollars per LTC, litecoin thus featured a daily inflation of as much as 1.4 million dollars, equal to an annual rate of 8.7%, well above that of bitcoin and other currencies.

With the reward per block halved, the daily and therefore annual inflation was cut in half, falling to about 4,35%. Every day from now on, therefore, only 7,200 coins will be issued compared to the previous 14,400, drastically decreasing the number of coins mined by the miners and placed on the market.

Reduced inflation has always had a beneficial effect on the price in the long term, due to the rather significant drop in supply. Much will depend on what happens to the markets in the coming months, which is why it is very difficult to make a reliable forecast.

Litecoin: what will happen to the hashrate?

Litecoin halving is an intrinsic mechanism encoded in the LTC protocol – as is the case for bitcoin – since it will happen without any action on the part of the miners and the community, unlike what happens with the blockchain upgrade forks.

During a fork, in fact, all the nodes must update to the new releases, in which the new protocol updates have been encoded and the block in which the chain split will take place, in such a way that the miners and the nodes can remain synchronised on the right blockchain.

The main consequence of a halving is the 50% reduction of the reward for block and therefore of the mined coins. While for the user of the currency, as well as for traders, there is a relatively minor change, for the miners it consists of cutting their earnings in half. In the coming weeks, therefore, we could see a marked decline in the hashrate of the Litecoin network, due to the miners who will switch to other currencies because of the low revenue offered by LTC.

Much will depend on how the price of the coin behaves. Theoretically, in order to remain sufficiently profitable for most of the miners, LTC would have to undergo a substantial increase in its price, so as to compensate for the halving of the issuance. However, as always, the price will be decided by the market, which in turn, in this particular case, will affect the hashrate of the network, since it will decide the fate of a large group of miners.

For now, the network is pretty close to the maximum hashrate, not too far from the record peak reached in mid-July, when the network recorded a maximum hashrate of 523 TH/s, exceeding the previous records of June.

The situation in the coming days and weeks will have to be monitored, as the price and hashrate of the currency will have to find the right balance so as not to penalise the miners too much.

The price flies to 106 dollars, registering a +16%

A few minutes after the halving, the price of Litecoin has undergone a real surge, reaching 106.77 dollars, before undergoing a first retracement.

Considering that at 11 AM the price fluctuated around 95 dollars, Litecoin has undergone a rapid growth of 16%, breaking through the fateful $100 threshold.

Emanuele Pagliari
Emanuele Pagliarihttps://www.emanuelepagliari.it/
Telecommunications engineer with a strong passion for technology. His adventure in the world of blogging started on GizChina.it in 2014 and then continued on LFFL.org and GizBlog.it. Emanuele is in the world of cryptocurrency as a miner since 2013 and today he follows the technical aspects related to blockchain, cryptography and dApp, also for applications in the Internet of Things.