Litecoin entered the market in 2011, and its founder, Charlie Lee, didn’t mean to compete with Bitcoin that started already gaining in popularity. He himself used to call Litecoin “Silver” in comparison to the “gold” of Bitcoin.
Litecoin was launched to solve some issues that Bitcoin started facing. The Litecoin project was the first hard fork on the Bitcoin Core client. So, the main features are similar:
Halving is the most frequently asked about event. It is one of the most interesting events in cryptocurrency history. That’s why this event is worth special attention.
Every time, when a transaction in Litecoin is confirmed, new coins are formed. The miner who has managed to mine a block receives an award. This reward includes a transaction fee and a specific number of coins.
However, if the coins are mined too frequently, they devalue inevitably. That’s why halving is implemented in the Litecoin algorithm.
When a specific number of blocks is mined, the reward for every confirmed transaction is divided in a half. That’s why it is called halving. The Litecoin halving occurs more or less every 4 years. Every halving is accompanied by a specific price fluctuation pattern. If you check the price fluctuations on thehttps://letsexchange.io/ live chart, you will see clearly how it works.
The main idea of halving is to keep the production of coins under control. With it, the excess of the coins in the market can be avoided, and thus, the devaluation of coins is prevented.
Also, halving allows keeping those miners only who are interested in the coin and eliminate those who are there just by accident. Usually, after a halving, many miners switch to mining other coins and come back only when the mining difficulty drops. Also, the drop in coin supply causes a surge in the coin price. Thus, even though halving decreases the number of coins given as a reward to a half, it is compensated with time with the price increase. This factor also influences the miners and makes them come back to Litecoin mining.
Now, you might be wondering whether halving is applied to all cryptocurrencies. No, different coins choose different ways to regulate the supply of coins and avoid a coin devaluation.
For example, Ripple has a limited number of coins released. They are all in circulation and cannot be mined. Ethereum sets a specific number of coins annually, and similar. Thus, there are different ways to regulate the coin supply and prevent devaluation.