What is Litecoin?
Created in 2011, Litecoin is a decentralised and peer-to-peer payment system. It’s a project fork of Bitcoin’s code, that looks to improve what Bitcoin could offer as a payment solution. Bitcoin has been criticised in the past for the cost and speed of making a transaction on its network.
Litecoin aims to be a faster and more efficient alternative to Bitcoin traditional money transfers. While it shares some similarities with Bitcoin, Litecoin has some technical differences, including a different algorithm for mining and a faster block generation time. Overall, Litecoin is a digital currency designed for everyday transactions and is considered one of the popular cryptocurrencies in the market.
Why we’re watching
Litecoin is having a major fundamental event unfold later this year, a halving event.
What is a halving?
Like Bitcoin, Litecoin has a halving event roughly every four years where rewards given to miners will decrease by half.
Why does this matter?
The primary impact of the Litecoin halving is on the supply of newly issued Litecoin. By reducing the mining reward, the halving slows down the rate at which new LTC are created, effectively reducing the supply and creating more scarcity.
Looking at a chart from Litecoin, we have seen that historically leading into previoius halving events, price has accelerated to the upside, with a sell-off into the actual event. However, the global economic position is vastly different then the last two event, so what will occur is anyone’s guess. As always, past performance is not indicative of future performance.