Is the halving over? Four major impacts of Litecoin halving that you must know

Author | Gu Mengting

After experiencing the first block mining reward halving in August 2015, Litecoin is about to experience its second halving in August this year.

What does halving mean?

According to the latest data from Litecoinblockhalf, based on the current block speed, the estimated time for Litecoin production reduction is around 10 am on August 6, 2019.

The current Litecoin mining reward is 25 LTC, which will become 12.5 LTC after the halving this year, and the annual inflation rate will also be reduced from the current 8.94% to 4.26%.

The halving of block rewards will lead to an increase in mining costs and a halving of output, which will significantly support the price of Litecoin and its intrinsic value.

Litecoin was born in 2011 and was one of the earliest "competitive coins" derived from Bitcoin. Its mining mechanism and other models are highly consistent with Bitcoin.

According to the pre-set, the Litecoin mining halving cycle is 840,000 blocks, that is, the reward will be halved every 840,000 blocks. Litecoin produces one block every 2.5 minutes on average, so like Bitcoin, it will experience a halving of rewards every four years on average.

Halving will bring four major impacts

Litecoin's first halving took place in August 2015. At that time, the price of LTC soared from $1.4 in early May to $8.5 in mid-July, the highest level of the year, due to the early start of the expected halving. After that, the price of LTC began to fall, hovering around $3 after the halving on August 26, but rebounded quickly within two weeks.

It is less than four months away from the next halving of Litecoin. Judging from the price of the currency, the halving market has already started to warm up in advance. Since the beginning of the year, LTC has been advancing all the way, from less than $40 to more than $90, and the price has more than doubled, which has also led to the overall recovery of the cryptocurrency market.

It can be seen from this that the market trend of currency halving expectations usually starts 3 to 6 months before the halving, during which time it often shows a beautiful upward curve, but the currency price will fall back after the positive effects of the halving expectations are fully released.

Based on historical experience, the halving of Litecoin block rewards may bring four major impacts:

The price of the currency will continue to rise before reaching a new high: LTC has soared more than 200% since the beginning of the year, while the overall crypto market has risen by 40%;

Increased computing power before halving: Given that the block reward will be halved in the second half of the year, more miners are now focusing on mining more Litecoin;

Mining profitability is affected: If miners withdraw from the competition or switch to other more profitable currencies, the Litecoin hashrate will decrease. As competition decreases, the profitability affected by the halving may be compensated;

The profitability of the mining industry may decline permanently: If the LTC price approaches its historical long-term median within 90 days after the halving, all other conditions remaining unchanged, the profitability of all Litecoin miners will be affected.

Since last week, Litecoin’s upward momentum has been insufficient and its price has fallen slightly. The halving expectations that were launched ahead of schedule may also end ahead of schedule. However, before Litecoin’s halving actually comes again, everything is still full of variables.