Litecoin (LTC) is about to experience its third halving, a halving of mining rewards. Find out how this cryptocurrency, often referred to as “digital money“, is moving towards a deflationary future while preparing to dance with its past.
At the heart of the cryptocurrency universe, Litecoin (LTC) is about to write a new chapter in its history by completing its third halving. The fateful hour is scheduled for around 5:00 p.m. this Wednesday, when the rewards awarded to miners on the network will be halved, from 12.5 LTC to 6.25 LTC.
Born in 2011, Litecoin is often nicknamed “digital money” for its similarity to Bitcoin, also known as “digital gold”. The brainchild of computer scientist Charlie Lee, Litecoin is based on a Proof-of-Work transaction validation mechanism. Anxious to avoid any potential conflict of interest, Lee announced in 2017 that he was selling all his Litecoins.
Litecoin towards a deflationary future?
Halvings, events awaited by the crypto community, have often been accompanied by a rise in the price of the assets involved. The price of LTC has already risen by 55% in a year, and 36% since the start of the year, peaking at around $113 in early July. It’s worth remembering that Litecoin’s all-time high was around $400 in May 2021.
In the past, LTC halvings have been the precursors of significant market movements. In 2015, LTC had risen by 824% in the months leading up to its halving, then by 525% in 2019, as reported by a Fineqia International analyst on Blockworks.
With less than 24 hours to go before the next halving, some experts suggest that the 40% increase in LTC prices seen towards the end of June may well represent the price peak.
Charlie Lee himself spoke on the subject earlier this week in a chat room on X (formerly Twitter). Staying true to Satoshi Nakamoto’s original vision, the crypto developer pointed out that halvings, occurring every 4 years, make LTC a deflationary asset that promotes adoption while preserving network security.
“Satoshi chose to halve blocks over four years to give the network enough time to develop and for fees to eventually take over. The idea is that there will be enough on-chain usage creating enough fees,” he explained.
Compared to the undisputed queen of cryptocurrencies, Bitcoin, the halving of Litecoin (LTC) is generating less media coverage and expectations. With a much smaller market cap than Bitcoin, the impact of this event on the crypto market is unlikely to be major. Yet Litecoin, by moving towards a deflationary future, is dancing with its past and hinting at a promising future in the ever-changing world of digital assets.