There has been a surge in Litecoin wallet address registrations as the cryptocurrency’s fourth-ever block reward halving approaches. Litecoin’s block reward is set to halve from 12.5 LTC to 6.25 LTC on August 23, 2023 , with these events historically accompanied by price rallies.
Blockchain data shows that both the number of new addresses and active addresses had begun a sharp upward trend from May into June as the halving draws near at just over six weeks away.
Litecoin researcher Shan Belew drew comparisons to Litecoin and Bitcoin’s halving cycles as a potential indicator of what the halving event could mean for LTC adoption and its value:
Litecoin is a cryptocurrency modeled off Bitcoin created by cryptocurrency proponent and software engineer Charlie Lee in 2011.
The early impetus for Litecoin’s creation was to avoid centralization of its mining ecosystem by using a different proof-of-work hashing algorithm from Bitcoin’s SHA-256. Nevertheless, ASIC miners still make up the bulk of its mining pools.
Litecoin is touted to have lower transaction fees, faster transaction confirmations and faster mining difficulty retargeting than the preeminent Bitcoin.
Lee famously coined Litecoin as “the silver to Bitcoin’s gold,” with its Bitcoin-inspired deflationary monetary protocol envisioned to see the cryptocurrency increase in value over time while its issuance decreases and eventually stops.
Litecoin miners are rewarded LTC a new block is produced that will house transactions. When Litecoin first went live, a miner bagged 50 LTC per block produced.
After every 840,000 blocks are mined, the block reward is reduced by half. There have been two prior halvings in Litecoin’s existence, in August 2015 and August 2019. The current reward of 12.5 LTC set to decrease again to 6.25 LTC with the third Litecoin halving.
The block reward will eventually reach 0 in the year 2142, by which time miners are expected to be incentivized by transaction fees for running the network.
Litecoin’s halving cycle is similar to Bitcoin’s, with the latter also having halvings every 4 years, while slower block creation times of 10 minutes mean that the BTC block reward is reduced after every 210,000 blocks.
Data from litecoinblockhalf.com shows that the previous Litecoin halvings weren’t initially followed by major LTC price rallies. Following the 2015 halving, the price of Litecoin remained relatively stable up until midway through 2017 as Bitcoin took the markets on its most prolific bull run it had seen up until that period.
The second halving was followed by another period of stable price action before the wider cryptocurrency markets entered the bull market of 2021.
With wallet address registrations and active daily user numbers increasing, the data seems to suggest that there is mounting momentum for the network as its latest halving milestone approaches.