CNET 丨Digital silver Litecoin will usher in halving2023-05-24
“Halving” refers to the technique of halving the reward for confirming cryptocurrency mining transactions on the blockchain. Control the total amount of digital assets by reducing the number of mining rewards, thereby increasing their scarcity and value. Just as Bitcoin halved every once in a while, Litecoin will also usher in its third halving in August this year. This incident may have a certain impact on the market performance and price of Litecoin, and it will also become a focus topic for investors.
Litecoin was created based on Bitcoin in 2011 with faster block times and a different mining algorithm. Litecoin, like Bitcoin, halves the block reward every 4 years to reduce inflation and increase scarcity. Litecoin’s initial mining reward was 50 LTC, which was halved to 25 LTC at block height 840,000 on August 25, 2015. On August 5, 2019, the block height was 1,680,000, and the Litecoin block reward was halved again to 12.5LTC. On August 2, 2023, at block 2,520,000, Litecoin will undergo its third halving, and the Litecoin block mining reward will be halved to 6.25 LTC. This event will affect the market supply and demand for Litecoin.
Bitcoin halvings tend to cause wild market volatility, and in the years following the 2016 and 2020 Bitcoin halvings, many crypto assets saw significant price increases. This also provides some reference for the market performance of Litecoin after halving. The Litecoin network generates approximately 7,200 Litecoins per day by mining 576 blocks. The current daily production of LTC is 9,000, however, after the third cut, this number will drop to 3,600. This will slow down the production of LTC, which may lead to increased demand from traders and investors, increased scarcity in the market, and the overall value of the asset may also increase to a certain extent.
However, the halving of Litecoin does not guarantee that the price of the currency will increase, and the market situation is unpredictable, not to mention that the Litecoin halving event does not receive much attention at the moment. A halving event reduces the number of rewards and thus revenue for miners, which reduces the diversity of types of participants who can profit and secure the network. Therefore, while the halving event increases scarcity, it also weakens the security of the network. When people bid on the halving event, it is effectively a vote of confidence that the security of the network is worth protecting. Because the halving event affects the security of the network, if investors believe that the security of the network will be protected, they will bid for it. This is one of the reasons why the halving event has an impact on the market.
As an established currency in the currency circle, Litecoin has a certain user base and market influence in the cryptocurrency market. The halving of Litecoin is expected to bring some support to its price, but the volatility and uncertainty in the cryptocurrency market still exist. Investors need to carefully evaluate risks and opportunities in order to formulate reasonable investment strategies and risk control plans. At the same time, it is also necessary to pay close attention to market changes and the development of digital assets in order to make wise investment decisions.
The above information is compiled by the CITEX content group, which is for learning and exchange purposes only, and does not constitute investment advice. For more information, please pay attention to the follow-up content. As the world’s No. 1 mining exchange, CITEX always puts users’ interests first and is committed to providing safe, transparent, open and efficient digital asset services. In the future, CITEX will continue to be oriented by the market and user needs, with multiple depths and multiple innovations, to launch more high-quality products, and to provide users with more investment opportunities and satisfactory services.