In the next few days, the Litecoin halving will happen. About 3 days and 16 hours according to Litecoin Block Reward. Litecoin and bitcoin as you probably know are quite similar from a technical perspective. Because they are so similar, it is possible the impacts of the halving might be similar from Litecoin to bitcoin. But what impact will the halvening have on bitcoin? Bitcoin’s past may be able to help us learn about the future.
From the point bitcoin was worth 1,200 dollars a coin to now, the price of bitcoin has been generally bearish, or in other words, has lowered. Why is this? Well one reason is the process in which new bitcoins are created, mining. When new coins are mined, they are added to the the market. To maintain the same price per coin, more money has to be added to the system. So when bitcoin was worth a thousand dollars a coin, every 10 minutes twenty-five new coins would be mined, and 25,000 dollars needed to be added to the system to maintain the $1,000 price.
But, 25 bitcoins won’t always be the amount of new bitcoins created per block. On July 27, 2016 at 12:30:03 UTC , a halving event will occur, meaning that 12.5 bitcoins will be created per block. This reduces the amount of capital required by half. At least that is what bitcoinclock predicts. The actual time of the halving may change slightly as that prediction assumes 10 minutes to solve a block. It is on the 420,000 block that the reward will be halved.
The implications of this change are huge. Bitcoin, with its increasing supply, has been bearish by its nature. With the block reward decreasing, it will be half as bearish.
Now, this is all theory, but what people actually do in response to changes can vary. After all, economics is a social science. Litecoin will be halving in just 3 days. This change in the amount of litecoin mined per block might be telling of bitcoin’s future. If the price of litecoin does in fact change, it is likely bitcoin will follow a similar pattern when it halves.
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