Litecoin is frequently referred to as Bitcoin’s silver counterpart, bearing many similarities to the most renowned and ancient cryptocurrency. Fixed scarcity, proof-of-work mining mechanisms, and pre-scheduled halving events are common characteristics of both assets. Nonetheless, notable variations lie between Litecoin and Bitcoin halving.
But let us first delve deeper into the essence of a halving event and its repercussions on the wider cryptocurrency industry before we dive into those differences. Experience the revolution in AI trading with Immediate Peak which offers AI-based trading options that can ease the pressure of analyzing the market, making tedious calculations, and trade.
How do Halving Events operate?
Halving events keep coins at a good value in the crypto community. Litecoin and Bitcoin have these events to ensure they do not lose their worth, while regular money can lose its value as a result of the surplus supply of money. Central banks make use of conventional currencies to implement actions like interest rate changes in controlling inflation. Decentralized regulatory agencies might be necessary to deal with such issues, but cryptocurrencies are missing in these kinds of systems. That is the reason the halving Event idea is such a great way to protect against the shortage of cryptocurrencies.
The halving happens by actually halving the blocks created on a cryptocurrency network, which slows down the speed of new coins made in achieving the number. At the moment, the circulation of Litecoin is more or less 72.5 million coins, and that means less than twelve million coins can continue to be created. While Bitcoin offers a similar halving structure, each halving event has several fundamental differences.
Difference Between Litecoin and Bitcoin Halving
Litecoin came into existence three years after Bitcoin
Even though Litecoin’s halving event will occur in 2023, that is before the subsequent halving of Bitcoin in 2024, Litecoin has existed for 3 years following Bitcoin. What this means is that Litecoin’s halving in 2023 is only going to be getting up with Bitcoin’s halving that took place in 2020.
It is because the LTC offered to miners this season will drop to 6.25 at the same price as Bitcoin now. Bitcoin’s subsequent halving event is scheduled in 2024, lowering its incentive for miners to 3.125.
Miners might be attracted to the larger quantities of LTC to gain access
Nevertheless, this implies that miners right now have a considerably larger quantity of LTC out there when compared with BTC. Based on CoinGecko’s information, now there are under 1.7 million BTC remaining to mine and yes it might take over a hundred years to mine the final Bitcoin, with upcoming halving happenings increasing the quantity of BTC readily available. For people that are wanting to know the number of Litecoins mined, you will discover that there are presently 11.5 million LTC, which is over 6 times the quantity of Bitcoin mined.
Litecoin’s halving event doesn’t create the same effect on the market as Bitcoin’s halving does
Because of Bitcoin’s reputation in the cryptocurrency market, the halving events have an alternative effect on the marketplace compared to Litecoin’s events every 4 years. Proof indicates that Bitcoin’s standing as the top cryptocurrency has hardly ever been challenged, therefore the consequences of Bitcoin’s holdings have usually been more important when compared with Litecoin.
As an example, in 2017 and early 2018, numerous coins hit new all-time highs, and the ensuing halving of 2020 resulted in a general market rally in 2021. Litecoin’s halving events though didn’t produce the same substantial market moves in 2015 as well as 2019.
Without any substantial correlations between Litecoin’s halving functions as well as the stock’s overall performance, it may be tougher for investors to find purchasing possibilities for LTC. The biggest price rises for Litecoin typically happened after Bitcoin’s halving event instead of by themselves.