So finally it has happened – the Litecoin mining reward halving, which was due for a long time and was leading to a surge in the price of LTC, has happened now. According to Litecoin block explorer the trigger block height of 1,680,000 was reached at 3:46 PM yesterday, and now the reward for every successful mining of Litecoin blocks has been reduced to 12.5 LTC from 25 LTC. Litecoin mining rewards are successful mining of every 840,000 blocks, which roughly take 4 years to mine. That’s why these events are marked as significant developments in the lifetime of Litecoin.
The block production time of Litecoin network is roughly 2.5 minutes. What this means is that approximately 576 new blocks of Litecoin are mined every 24 hrs. Since mining of every successful block will now lead to a reward of 12.5 LTC, it means that 7,200 LTC will be produced in the ecosystem every single day. Previously, when mining reward was 25 LTC, the amount of new LTC entering circulation was double – 14,400 LTC per day. Now when the number of new LTC coins entering the system has been reduced by half, it will automatically increase the price of Litecoin as per increasing demand. This is how inflation management is automated in cryptocurrencies.
At the time of writing this article, the number of total LTC in circulation is 63 million. 84 million LTC have been issued, but 63 million in circulation. Remaining 21 million LTC are reserved for block mining rewards, which amounts to coins worth $2 billion as of current market value. That’s how huge LTC has become since its creation after a fork from Bitcoin. And at the moment it has also delivered impressive returns to its HODLers. Its price was $30 at the beginning of this year, but now it has reached $100. Heck… it made a high of $120 in June, around the same time when Bitcoin had surged to $13,000!
Litecoin’s hash rate and mining difficulty have also adjusted along with its price. There has been a jump of more than 200% in both these key metrics since December, which has left a big impact on the mining network of Litecoin. Many of the machines that could earlier be used to mine Litecoin are not able to offset even their electricity costs now, which means that either they need to be replaced, or they need to run at a loss! Obviously, who would want to run a mining node at loss? So a lot is going to change in the mining network of Litecoin over next few weeks.