aberdeen times - The Halving Explained (LitecoinBitcoin)

With Litecoin's first ever halving soon
to be upon us we are already beginning to see the affects. So, what a better time to discuss exactly
that. Sit back because this going to get interesting. By no means is Litecoin the first
coin to be halved.

In fact, back on November 28th, 2012 Bitcoin underwent its first-ever
halving. So we alredy have a good idea of what to expect just by looking at history. Okay, so what
do we actually mean when we refer to a coin as "halving?" Well, it's pretty simple: it means the mining
reward halves. In the case of Litecoin, miners are
currently awarded 50 new coins for solving blocks.

After halving, miners will be rewarded 25
Litecoins per block. This process only takes place once
half of all the coins are in existence. And then another half, and another half,
and so on and so forth. The halving process doesn't just happen
once.

For both Bitcoin and Litecoin this is set to
happen every four years as is stated in their code.
But for other coins, this may vary. While nobody really
knows for sure when the last few coins will be mined, we
expected to it be around 2142 for Litecoin and 2140 for Bitcoin. Based on the reward over this time. Of course by then, only 0.00000672 Litecoins will be mined each day.

Until eventually all 84 million Litecoins are in existence. Clearly, this is a positive thing as
inflation slows each time, less coins for the market, and therefore
everyone's coins rise in price as a result. So why does Litecoin
actually look like this before the halving? Well, the most
likely answer is that people are expecting the price to rise so in anticipation they are buying up these "cheap" undervalued coins--in their mind-- while they are at this current price. We
should also point out that crypto currency has come a long way since 2012
when Bitcoin underwent its first halving.

Thus in turn, this sudden rush and
demand of people wanting to buy-in has, in turn, pushed the price of Litecoin
higher. There is however, one more part to the
equation: the miners.  As we know miners invest in specialized equipment in order to
actually mine the coins. Just like any other business, they need
to make a profit.

Otherwise it's just not worth them doing
so. And now that income is about to be cut in half a lot of their ineffective equipment is about to be shut off. That is, unless the market price of the
coins rise to a point where they can continue to make a profit. By the way, the miners face one of two
options.

Those being: the price rises and everything stays
pretty much the same as it is now. However if it doesn't, a lot of miners
will no longer be able to operate. In turn, the network hash rate will drop
as they begin to shut off. Leaving only mining farms in places
such as China working.

Resulting in a less
distributed network. If a network hash rate drops low enough, The mining difficulty will automatically adjust itself. Meaning those who stopped, may be able to
start mining again at a profit. While we do not know
how high the price of go during this period, we do expect that after all is said and
done, the price will settle higher than it was in the few months leading up to the halving..