Litecoin, a peer-to-peer currency and open-source global payment network, announced it will be halving on Tuesday, Aug. 25, marking what the Litecoin Association calls a milestone in the cryptocurrency’s 4-year history. The association has produced a video that describes the halving’s significance to Litecoin.
After the halving, Litecoin will reward miners 25 coins rather than 50 new coins per block for solving blocks, Litecoin explained in a video. “The halving process doesn’t just happen once,” the video explained. This process happens every four years for both Litecoin and Bitcoin, as stated in their respective codes.
Video Explains Halving
As inflation slows, there are fewer coins for the market and everyone’s price rises, the video notes. Acknowledging there has been a price decline prior to the halving, the video notes the most likely reason is that people expect the price to rise. “We should also point out cryptocurrency has come a long way since 2012 when bitcoin underwent its first halving,” the video notes.
Another part of the equation is the miners, who invest in specialized equipment to mine the coins and must make a profit. Because their mining income will fall by 50 percent, they shut off a lot of their equipment unless the price rises to the point where it makes sense to continue.
Miners face two options. One is the price rises and miners continue to operate. If the price doesn’t rise, the miners will no longer be able to operate. If this occurs, the network hash rate will drop as mining declines, resulting in a less distributed network. If the network hash rate drops low enough, the mining difficulty will automatically adjust itself. Those miners who stopped mining could be able to resume.
“After all is said and done, the price will settle higher than it was” leading up to the halving, the video notes.
Pricing Concerns Overstated?
The Litecoin Association acknowledged in a release that there are concerns about the halving’s effect on Litecoin’s pricing, but noted that the price is not the currency’s paramount goal. Instead, the goal is to allow for the ability to send remittances within minutes, to store legal information digitally (eliminating fear of document shredding), and to provide self banking, all in a decentralized manner.
To be able to accomplish these tasks are so momentous that it has attracted the attention of governments and trillion dollar industries! This is why we do what we do as an industry,
the association said.
Litecoin came into existence on Oct. 7, 2011, with the processing of its genesis block. Developer Charlie Lee mined three blocks to test the network, and Litecoin launched on Oct. 13, 2011, via Bitcoin Talk.org.
Also read: What just happened to Litecoin and bitcoin?
Association Touts Litecoin’s Success
While not the first altcoin, Litecoin has been the most successful, based on its adoption and acceptance within crypto communities, outside businesses and industries, and regional, state and governments, the association claimed.
Meanwhile, Litecoin activity grows daily among miners, traders, developers, merchants, exchanges and the public at large. It is listed on most crypto currency exchanges while businesses are beginning to accept and hold it as a form of payment. Such businesses include REMAX London, Cheapair.com, BTC Trip and eGifter.
“Beyond community involvement, Litecoin has one of the strongest and most secure networks on Earth,” the associated noted.
Litecoin Progress Continues
Litecoin surpassed the 1 terahash milestone in October 2014. This milestone was first achieved by bitcoin and only achieved by cryptocurrencies with specialized mining equipment known as application-specific integrated circuits (ASICs). This milestone ensures the strength and security of the network as a payment method.
We at the Litecoin Association are both proud and humbled that we can play our small part in the crypto currency ecosystem and industry. The halving is a significant milestone for Litecoin, and with the support of the multiple communities, one step closer to defining the future for the world.
Litecoin’s price was 0.01527150 BTC as of Aug. 16, according to Coinmarketcap.com. Its market capitalization was 637,322 BTC, volume was 13,546 BTC and available supply was 41,732,760 LTC.
Images from Shutterstock.