Litecoin (LTC), the second-oldest crypto in existence, has been gaining some attention just lately, and for good reason as it has a potential price-boosting event coming up - it's "halving".
Those with a passing, vague, or even tiny-to-zero interest in crypto tend to have heard of at least three digital assets - Bitcoin, Ethereum and Dogecoin. Oh, and probably Bored Apes, too.
But Litecoin is one of the OGs in the space, once upon a time a regular top 5 crypto by market cap. It currently sits at position 14 on CoinGecko, with a market cap valuation of about US$6.7 billion, changing hands for US$91.71 per token and down about 78% from its all-time high of US$410, which it hit a couple of years ago.
Before we explore its halving narrative, what that actually means, and also why the Litecoin network has seen a burst of positive activity just recently, let's quickly look at.
Created by Charlie Lee, a former Google engineer, in 2011, just a couple of years after Bitcoin (BTC) first came to prominence, Litecoin (LTC) is a "fork" of the Bitcoin blockchain. And that simply means it was based on Bitcoin's source code tech, with, in this instance, some modifications.
Those modifications were designed to create a crypto that supposedly improves some of the original Bitcoin's shortcomings - for example slow transaction processing speeds. Lee essentially created LTC to be a fast, secure, low-fee crypto for use as a currency in everyday payments transactions.
While many see Bitcoin as something akin to digital gold and a store of value, the premise often attached to Litecoin is that it aims to have greater everyday utility and therefore has been described as "crypto's silver".
Like Bitcoin, Litecoin functions as a Proof-of-Work (PoW) mining-powered cryptocurrency, as opposed to Ethereum, for example which uses a Proof-of-Stake validating mechanism to secure its network.
You may have heard of the Bitcoin halving, which famously occurs every four years and has historically precipitated a bullish period in the crypto market?
Well, in case you're new here, here's how Coinhead's 'Cryptionary' defines halvings.
"An event scheduled into a blockchain protocol that serves to halve the reward of Proof-of-Work miners that operate in the network. Halvings reduce the rate at which new coins are created, effectively reducing the supply.
"The most notable "halving" event is Bitcoin's and occurs every 210,000 blocks, or roughly every four years. In the past, Bitcoin halvings have subsequently resulted in price surges."
With regards to the Litecoin halving, it also occurs every four years, but is on a different schedule to that of Bitcoin. Its first halving event occurred in August 2015, and its second happened in August 2019. The next Litecoin halving is due to happen in just over two months, around about August 10.
Litecoin, like Bitcoin, has a set limited supply of tokens. There will only ever be 84 million LTC in existence (21 million for BTC).
Halvings are seen as a big deal because they propagate the deflationary narrative, with issuance of coins decreasing. If demand for the coin rises, while supply issuance decreases, it created a potentially explosive situation for the price of the token. Supply 'n' demand and FOMO, innit.
One important thing to note, however, when looking at past price action with reference to halvings, is that the price of BTC has tended to rip up months beyond its official halving dates, while LTC has surged leading into its halving date, with something of a sell-off occurring just before or almost immediately after.
This might suggest that some LTC action is due very soon. Several analysts we're spotting out there in Crypto Twitter Land seem to think so.
Another interesting thing to note about Litecoin at present is its surge in network activity, as well as investor and trader interest, indicated by an increase in LTC addresses.
As blockchain data analysts IntoTheBlock reveal, since March 30 about 1.5 million Litecoin addresses (holders) have been added. As of last week, the total number of LTC addresses with a balance is now more than 8.5 million - a significant uptick since the end of March, when there were just over 7 million.
Adding to this, another analytics firm, Santiment recently wrote about Litecoin and its halving, noting that the address increase is "a great signal that addresses were stocking up on what may be the only 'discount' before August 10th."
"The LTC20 halving coming up on August 10th will be a significant event for the Litecoin network," wrote Santiment. "Most experts expect the event to have a positive impact on the price of Litecoin, and we would be included in this belief."
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