Litecoin’s Soon-Approaching Block Reward Reduction Could Mean Increase In LTC Value
Litecoin [LTC]’s Soon-Approaching Block Reward Reduction Could Mean Increase In LTC Value
It has come to our attention that Litecoin [LTC] is expecting a reduction in its block reward. As per news outlet, Crypto Slate, the digital asset’s block reward is supposed to reduce in 100 days from Saturday, April 27, 2019. This could mean that mining tokens will become ever more difficult, ultimately, increasing the value of the tokens already in circulation. (cryptoslate)
Said process has been deemed as, “halving”, which reduces a miner’s rewards for creating the token. This leads to a decreased supply moving forward. According to the claims made, said reduction occurs when 840,000 LTC blocks are mined. Interestingly, it occurs in a cyclical pattern, that is, every four years (with 576 blocks created per day).
The anticipated date has been shared as August 6, 2019, where miners who normally earn 25 LTC for every block, will instead get 12.5 LTC (hence the name, halving). This process terminates when the total supply reaches 84 million LTC.
Source 1: Obtained from Cryptoslate.com: As you can see the inflation rate is expected to increase until about 2027, with it plateauing afterward. So, we have time in which the market can potentially become more liquid, that is until the increasing trend halts. That’s when the digital asset becomes more static, which is typically not preferred.
As for the number of times, halving has occurred. It seems like LTC has only experienced it once, on August 26, 2015, where miners saw their rewards get slashed to 25 LTC per block mined from 50 LTC.
After said halving, LTC’s token value eventually saw a gradual increase (at a relatively small rate) and then the bull run started on March 30, 2017, reports Crypto Slate – leading the token to reach as high as $370. All this being said, one could either expect the prices to drive up or down, but many trusts that the project is surely to push its way up.