Litecoin (LTC) is a peer-to-peer cryptocurrency that was created as an open-source project in October 2011 by Charlie Lee, a former Google engineer. Lee designed Litecoin as a “lite” version of Bitcoin, aiming to address some of the limitations and improve certain aspects of the original cryptocurrency.
The creation of Litecoin was motivated by a few key factors. First, Charlie Lee recognized the growing popularity and potential of Bitcoin but saw room for improvement in terms of transaction speed and cost. Bitcoin’s blockchain had a 10-minute block time, while Lee believed that a shorter block time would allow for faster transaction confirmations.
To achieve this, Litecoin was created with a block time of 2.5 minutes, allowing for quicker confirmations and a higher transaction throughput. Additionally, Litecoin utilizes a different hashing algorithm called “Scrypt” instead of Bitcoin’s “SHA-256.” Scrypt was chosen to make Litecoin mining more accessible to a broader range of individuals, as it required less computational power and specialized hardware.
Charlie Lee’s vision for Litecoin was to create a digital currency that complemented Bitcoin and could be used for everyday transactions. Litecoin shares many similarities with Bitcoin, including its decentralized nature, limited supply, and blockchain technology. However, Litecoin’s technical differences, such as faster block times and a different hashing algorithm, make it a distinct cryptocurrency.
Since its inception, Litecoin has gained popularity and established itself as one of the prominent cryptocurrencies in the market. It has been widely adopted by merchants and integrated into various payment platforms, making it a viable option for transactions.
It’s important to note that while I strive to provide accurate information, cryptocurrency projects and their histories can evolve rapidly. Therefore, it’s advisable to consult reliable sources and official project channels for the most up-to-date and accurate information on Litecoin.
LITECOIN HALVING… SOON…
The Litecoin halving refers to an event that occurs approximately every four years on the Litecoin blockchain. It involves a reduction in the block reward miners receive for validating transactions and adding them to the blockchain. This reduction happens through a programmed adjustment in the protocol, which cuts the reward in half.
The purpose of the halving is to control the inflation rate of Litecoin and ensure its scarcity over time. By reducing the block reward, the supply of new Litecoins entering the market slows down, leading to a gradual decrease in the rate at which Litecoins are created. This is similar to Bitcoin’s halving mechanism.
The first Litecoin halving occurred on August 25, 2015, when the block reward decreased from 50 Litecoins to 25 Litecoins. The second halving occurred on August 5, 2019, reducing the block reward further to 12.5 Litecoins. The next halving is expected to happen in August 2023, and the block reward will be reduced to 6.25 Litecoins.
Historically, Litecoin halvings have had mixed effects on the price and market dynamics of Litecoin. In some cases, the anticipation of the halving led to increased buying activity and a price rally leading up to the event. However, the actual impact on the price can vary and is influenced by various factors, including market sentiment, demand, and overall cryptocurrency market conditions.
Looking to the future, the halving events will continue to occur at regular intervals until the maximum supply of 84 million Litecoins is reached. As the supply of newly minted Litecoins diminishes, the potential for scarcity and increased demand may have an impact on the price. However, it’s important to note that future price movements are uncertain and depend on various market dynamics and factors beyond the halving alone.
More data about Litecoin
What is a block halving event?
As part of Litecoin’s coin issuance, miners are rewarded a certain amount of litecoins whenever a block is produced (approximately every 2.5 minutes). When Litecoin first started, 50 litecoins per block were given as a reward to miners. After every 840,000 blocks are mined (approximately every 4 years), the block reward halves and will keep on halving until the block reward per block becomes 0 (approximately by year 2142). As of now, the block reward is 12.5 coins per block and will decrease to 6.25 coins per block post halving.
Why was this done?
Litecoin was designed as a deflationary currency. Like gold, the premise is that over time, the issuance of litecoins will decrease and thus become scarcer over time. As litecoins become scarcer and if demand for them increases over time, Litecoin can be used as a hedge against inflation as the price, guided by price equilibrium is bound to increase. On the flip side, fiat currencies (like the US dollar), inflate over time as its monetary supply increases, leading to a decrease in purchasing power. This is known as monetary debasement by inflation. A simple example would be to compare housing prices decades ago to now and you’ll notice that they’ve increased over time!
Predictable monetary supply
Since we know Litecoin’s issuance over time, people can rely on programmed/controlled supply. This is helpful to understand what the current inflation rate of Litecoin is, what the future inflation rate will be at a specific point in time, how many litecoins are in circulation and how many remain left to be mined.
Who controls the issuance of Litecoin?
The network itself controls the issuance of litecoins, derived by consensus through all Litecoin participants. Ever since Litecoin was first designed, the following consensus rules exist to this day:
· 84,000,000 litecoins to ever be produced
· Target of 2.5-minute block intervals
· Halving event occuring every 840,000 blocks (approximately every 4 years)
· Block reward which starts at 50 and halves continually every halving event until it reaches 0 (approximately by year 2142)
Any change to these parameters requires all Litecoin participants to agree by consensus to approve the change.
Past Halving event dates
The first halving event occurred on the 25th of August, 2015 at block height 840,000.
The second halving event occurred on the 5th of August, 2019 at block height 1,680,000.
The next halving will coming around 31th of July, 2023 at block height 2,520,000.
The super chart for Litecoin
In the following super chart, I have identified an area where the price, roughly, could already be finding support before the halving, and then start an upward trend.
Finally, the price fell a little more, to re-emerge strongly, seeking after this new descending minimum in an uptrend, to climb prices again. We have to take into account the special situation of this cryptocurrency.
I remember back in 2017, when the price was above 300 USD and again in 2021.
Will he get it a third time?
Let’s have a reflection on how prices move in the long term:
Analyzing with a logarithmic graph, its entire price structure, the price… is informing us that in the long term, it will be able to do it, again.
No buy recommendation, that’s what I see.
What do you observe in the following graph (2014/2023)? Take your time to think if this type of investment is in line with what you are looking for.
As always, remember, it is not a recommendation, but a fundamental and technical vision, this time, of Litecoin, the digital silver that is approaching its new halving, its new halving of the block reward.