August 5th saw Litecoin, one of Bitcoin’s hard forked blockchains, halve its reward value for miners.
Litecoin halving was a success! And price just hit $100! ?
Block 168,000 produced 12.5 LTC in block rewards.
Let’s do this again in August 2023! ? pic.twitter.com/aBvDJtH4FV
— Charlie Lee [LTC⚡] (@SatoshiLite) August 5, 2019
Quick Recap: What is the Litecoin halving?
Similar to the Bitcoin halving, the Litecoin halving is an event which sees the reward earned from mining Litecoin’s tokens cut by 50%. This is done in order to slow down the production of the cryptocurrency’s tokens to help maintain value.
Litecoin is limited to a supply of 84,000,000 LTC. Litecoin miners use nodes and computing devices to solve puzzles algorithmically and receive Litecoin as a reward. At present, the reward for mining one block is 12.5 LTC.
Essentially, if the reward remained the same, too many blocks would be mined because of the appeal of the full reward. This means that too many tokens would exist at the same time and the value of the token would be reduced. If the reward is halved, it means that there is more room for the value of the token to gain.
How did the halving affect the blockchain?
Shortly after the event, founder Charlie Lee posted an update saying that 12 blocks had been mined within 17 minutes following the halving.
In a follow-up post on 9th August, Lee noted that the network had seen its first difficulty change following the halving, showing a “4.4% drop in difficulty/hashrate.”
A week after the halving, he commented that the second difficult change had shown a difficulty decrease of 12%, saying equilibrium had been found with the hashrate:
Litecoin’s second difficulty retarget since the halving resulted in a difficulty decrease of 12%. We are pretty much back to equilibrium now with blocks mined every ~2.45 mins.
So, total difficulty change of -15.6% due to the halving, which reflects the total hashrate decrease. pic.twitter.com/tKGOMdmU21
— Charlie Lee [LTC⚡] (@SatoshiLite) August 12, 2019
At present, according to F2Pool, only two of the five miners are managing to pull a profit from their mining with three in the red for electricity cost rate.
How did the halving affect the price?
Looking at the chart of Litecoin’s value over the past month from CoinMarketCap, it’s evident that the token moved to see it’s 30-day monthly peak as a result of the halving. On 5th August, Litecoin moved to see a $105.59 price. Since then, the market as a whole took a dip as Bitcoin struggled to maintain $10,000. Currently, the token is sitting at $63.63, only slightly higher than its monthly low point at $62.61. It’s very unlikely that this decrease in price is as a result of the halving.
When is the next Litecoin halving?
According to the Litecoin Block Reward Halving Countdown, the next halving event is predicted to take place on the 4th of Aug 2023.