Experts say that the new trimmed profit margin and the drop in digital currency prices threaten the profitability of mining operations, especially those that have older devices.
The difficulty rate of Litecoin (LTC), a coded measure of how difficult it is to solve the mathematical puzzles used to write blocks on the network, was reduced from 15.93 million on August 4th (one day before the halving of LTC) to 11.40 million.
According to BTC.com mining group, in addition to the difficulty rate, the hash levels on the network also decreased by 28%. This reflects a decrease in interest in Litecoin mining, which is not surprising. It should be noted that on August 4th, the halving of the network had reduced block rewards from 25 to 12.5 LTC, significantly reducing the profitability of current miners.
Fall in Difficulty Levels
The fall in mining difficulty by 28.44% is said to represent the lowest level since April 29th. Even BTC.com data estimated that it would continue to decrease by another five percent until the next adjustment date.
The Litecoin mining difficulty is designed to automatically adjust every 2,016 blocks, approximately every 4 days, to ensure that the block production interval remains approximately 2.5 minutes, according to the average hashing power in the current cycle.
The average 4-day hashing power on the Litecoin network also decreased from 456 TH/s recorded on August 4th to 326 TH/s by August 22nd, when the last difficulty adjustment occurred (representing a drop of 28%).
The data for the distribution of the hash rate within three days indicate that the miners currently connected to the Poolin group represent 23% of the total computing power of the network, followed by those connected to Bitmain’s F2pool and Antpool.
F2pool data show that the most profitable miners on the Litecoin network, manufactured by InnoSilicon and FusionSilicon, now have a return of between 10% and 20%, since the price of LTC has dropped from US $93 to US $74.83 by the time of writing this note.
If LTC Continues Being Mined
According to CoinDesk, and assuming that the electricity needed to power the miners costs US $0.04 per kWh, it is estimated that these models generate a daily profit between US $0.20 and US $0.50. At the current price of the LTC, older mining equipment such as Bitmain’s AntMiner L3 and L3 + would earn just over US $0.01 per day, according to the F2pool index.
Actually, the figures indicate that many miners, which work to support the Litecoin (LTC) block network and compete for rewards, disconnected their machines after the recent halving.
In any case, there is no certainty about whether this fact is leading the cryptocurrency to continue falling in price, although some studies indicated that it would not.
A recent research by Strix Leviathan said that Bitcoin and Litecoin prices would not be affected by halving. Regarding this, the researchers indicated that these updates do not usually have a significant impact on or against the value of such cryptocurrencies.
By Willmen Blanco