Recent network data shows that mining hashrate on Litecoin’s network dropped 28% since the block reward halving occurred on Aug. 5, as miners forego the decreased profitability from obtaining LTC.
Litecoin Difficulty Declining
Data form mining pool BTC.com shows that Litecoin’s mining difficulty was of 15.93 million on Aug. 4, one day before the halving, and has gradually fallen to 11.40 million as of Aug. 22. The hashing power for Litecoin’s network has dropped 28%.
Hash rate and mining difficulty give an indication of the amount of computing resources being contributed to a cryptocurrency’s network, which includes securing transactions on the blockchain. It also provides a snapshot of the competition involved for miners hoping to obtain a block reward.
However, following the Aug. 5 halving, Litecoin miners only receive 12.5 LTC, compared to the 25 LTC block reward they were previously receiving. In addition, the price of Litecoin has been on the decline since the beginning of August, slipping from $93 at the halving to its current price of $74.
Most analysts predicted there would be market turmoil for the cryptocurrency in the aftermath of the halving. While the cryptocurrency has a reduced supply in the form of regular block rewards, the uncertainty surrounding mining and profitability has caused the price to take a hit.
Charlie Lee, Litecoin’s founder, said in the build-up to the halving that it would be a shock for miners,
When the mining rewards get cut in half, some miners will not be profitable and they will shut off their machine.
However, Lee predicted that the readjustment in mining difficulty would largely smooth things out for the cryptocurrency.