The expected third halving of the Litecoin network took place this Wednesday, marking the beginning of a new phase of rewards for miners.
Anticipation of the halving has come to an end for the community of investors and miners of the Litecoin network since it was activated today at noon (Argentina time). Precisely at that moment, the expected automatic reduction of the rewards for the processing of block transactions took place.
This is the third cut of this type in the Litecoin Blockchain, which is one of the oldest and most secure. It is worth mentioning that this chain has been working uninterruptedly since 2011, the year it was split from Bitcoin.
The 50% cut in rewards occurred at the height of block 2,520,000. The first cut in this network occurred in 2015 at block 840,000 and the second was in 2019 at block 1,680,000. With the current cut, the block rewards for miners dropped from 12.5 to 6.25 LTC. What’s next for the community?
Halving Impact on Litecoin Price
As we have already pointed out in previous works, the halving in Litecoin, or in any other PoW currency, is considered an event with bullish characteristics. However, it should not be confused with an instant price increase, but rather a gradual one.
To the extent that the community adapts to the new reality of scarcity in the issuance of new coins, the price goes up. The latter does not mean that in the short term, there cannot be a strong boost in the price of the digital currency. However, the nature of this possible increase would be merely speculative.
The last scenario is of high risk since a situation of rapid collection by the whales could arise. Just before the halving took effect, the price of the cryptocurrency was already beginning to experience slight upward movements, which could intensify.
The historical trend of the Litecoin price after the halving is to regress in the short term. As shown in the image below, during the first and second halving there was a negative reaction from investors.
In any case, these types of events have their real results in the long term, and that is when they accumulate. The succession of several halvings causes a notable scarcity of the asset.
Some Network Data to Start this New Stage
Now that the halving has come to life and inaugurated a new stage of more scarce supply for Litecoin, it is worth reviewing some interesting data. The Blockchain entered this new post-third halving phase with a total circulation of approximately 73,500,000 coins out of a supply ceiling of 84 million. This means that so far 87.5% of all LTCs have been mined and 10.5 million remain to be mined.
Every four years (840,000 blocks) new 50% reward cuts will occur, suggesting that there will be a hash war to mine the remaining 10.5 million.
As for the market capitalization, it is counted at $6.77 billion dollars. This leaves Litecoin at number 11 in the CoinMarketCap ranking.
This network processes approximately 572 blocks per day, which means that the daily supply will now be 3,575 LTC for the miners. Until today, they extracted a total of 7,150 coins daily. If the pre-halving price of Litecoin holds, then daily miner rewards expressed in US dollars will take a significant plunge. These will drop from $657,000 to $328,900.
By Audy Castaneda
