Original Author: Xiyu, ChainCatcher
On the evening of August 2nd at 23:00, Litecoin (LTC) completed its third block reward halving at block height 2520000. The current block reward is 6.25 LTC.
Usually, halving events attract attention and discussion in the market, often accompanied by a narrative of cryptocurrency price increase.
However, the Litecoin halving, which occurs once every four years and has always been known as "Digital Silver," did not receive much attention from the cryptocurrency market users. Discussions related to Litecoin are also rare in the crypto community, with only a few news articles about the countdown to the halving.
As a representative of ancient era POW tokens, Litecoin's token price performance after the halving will determine the level of interest from users. Before and after the halving, the token LTC has shown mediocre performance in the secondary market. According to Coingecko, it has declined by 5% in the past 14 days. The price on the halving day also did not fluctuate much, with a decrease of 4.4%, and the current price is $86.3.
However, just a few days before the halving, Litecoin founder Charlie Lee and his brother announced the joint launch of 500 "Litecoin Halving Silver Commemorative Cards," each card made of 50g of silver and containing 6.25 LTC. They are being sold for $1000 each, with estimated revenue of at least $500,000. This action has been mocked by users as: it seems that Litecoin has no use, and the founder brothers can only make money by selling cards using the hype.
While the founder is selling cards during the halving period, as users, we are more concerned about whether the halving can bring back attention to the long-silent Litecoin and have a positive impact on its ecosystem development.
Little Interest Before the Litecoin Halving, Quiet Secondary Market After Halving
This halving is the third halving in Litecoin's history since its launch in 2011. However, the market reaction has been relatively quiet, with the token LTC experiencing a decline in the secondary market.
The design of Litecoin's halving is based on Bitcoin. According to its protocol-defined halving schedule, halving occurs every 840,000 blocks (approximately once every four years), and each halving means miners will only receive half of the rewards compared to before the halving.
As of August 3, 2023, Litecoin has completed three halving events. The first halving occurred in 2015, reducing the block reward from the initial 50 LTC per block to 25 LTC. The second halving took place in 2019, reducing the block reward from 25 LTC to 12.5 LTC. The third halving occurred on August 3 of this year, reducing the block reward from 12.5 LTC to 6.5 LTC.
Based on this pattern, the fourth halving of Litecoin is expected to occur in 2027, reducing the block reward from 6.5 LTC to 3.125 LTC.
The total supply of LTC tokens is 84 million, with a circulating supply of approximately 73.5 million. Around 87% of Litecoin is in circulation, with a current market capitalization of approximately $6.34 billion, ranking twelfth among cryptocurrencies.
The halving event, which occurs every four years, is often considered positive news in the crypto market. In particular, Bitcoin's halving is often associated with a bullish market. Halving or reducing production is usually designed to address token inflation issues by controlling supply and making prices more favorable for an increase. Therefore, whenever a halving event occurs, it attracts attention and discussion in the crypto market.
Halvings occur in POW (Proof of Work) tokens, and they have the most significant impact on the network and mining-related parties, such as mining pools and manufacturers. Halving means a reduction in mining rewards, increase in difficulty, and a significant increase in mining costs. This has a direct negative impact on the network, and some miners may exit or switch to mining other mainstream tokens. This puts the security of the network to the test.
It is generally believed that halving leads to price increases for two main reasons. First, the reduction in mining rewards after halving increases costs for miners, theoretically driving up token prices. Second, from a supply perspective, halving disrupts the dynamic equilibrium of production and leads to a decrease in token supply. If demand remains the same or increases, the decrease in supply can result in demand exceeding supply and potentially causing a rise in token prices.
However, it is not inevitable that the token price will rise after halving. The price of cryptocurrency is the result of multiple factors, including macro environment and overall market sentiment. For example, the price of the DASH token, which completed halving on June 23 this year, remained around $30 for more than a month after halving.
However, there have been few discussions and news related to Litecoin in the crypto community before and after halving. Some users even asked in the community, "Is LTC halving tomorrow?" and multiple users replied, "No one cares anymore, everyone no longer cares about this ancient POW coin."
In addition, most users have a bearish view on Litecoin halving. Crypto player Lin mentioned, "During the bull market in 2021, the Litecoin Foundation retweeted a fake news about Walmart supporting LTC payment, and then deleted it. But this caused a very large fluctuation in the market, so it was clear that the mainstream coins could only manipulate the market by news, and there was no longer a consensus to dominate the market. In the long run, Litecoin halving is not worth paying attention to."
On the day of halving, LTC experienced a short-term decline in the secondary market, with a daily decline of 4.4%, and the current price is $86.3. This seems to further validate the bearish prediction of users towards its halving.
Founder launches "Halving Commemorative Silver Card"
When Litecoin community users were focusing on the halving market, Litecoin founder Charlie Lee and his brother Bobby Lee jointly launched a physical collectible card made of 99.9% pure silver called "Halving Commemorative Silver Card" to commemorate Litecoin's quadrennial halving event. The expected price for each card is $1000.
On July 27, Charlie Lee and his brother announced in a live broadcast about Litecoin halving that they had collaborated with Ballet to produce 500 silver physical collectible cards made of 99.9% pure silver to commemorate Litecoin's third halving event.
Ballet is a manufacturer of special cards (similar to supermarket gift cards) for cold storage of cryptocurrencies, and Bobby Lee is its CEO and co-founder.
According to the introduction, each silver card is made of 50 grams of 99.9% pure silver (also known as "999 pure silver"). The value of the silver coin on each card is only $40, and this card will also be pre-loaded with 6.25 LTC, with a token value of about $555. This means that the estimated value of this card itself is about $595. It is expected to be sold for about $1000, and the premium is a potential expectation for buyers. In addition, Charlie Lee mentioned that all proceeds from the sale will be donated to the Litecoin Foundation to promote the adoption and development of the blockchain.
Bobby Lee mentioned that these collectibles are about the size of a credit card and have a double-layer QR code sticker. The top layer displays the Litecoin deposit address, while the hidden bottom layer displays the encrypted private key (EPK). The password used to decrypt the private key can be accessed by scratching off the second part below the QR code.
Charlie Lee explained that this is a silver card, so even if Litecoin falls to zero, it is still worth the price of 50g of silver. He also mentioned that some of these silver cards may be auctioned, such as the first 20, 21, etc., while the rest will be sold at a fixed price, which has yet to be determined.
Currently, the Litecoin halving commemorative silver card has not been launched, and it is reported that it will be available for sale sometime after the halving in August.
This "halving commemorative silver card" jointly launched by the two Lee brothers, the founders of Litecoin, can be said to kill two birds with one stone. By leveraging the Litecoin halving event, the Ballet cryptocurrency gift card website not only gained user attention but also easily made at least $500,000. Users jokingly referred to this move as the Lee brothers being the most capable in the cryptocurrency circle, as they were able to promote a hot project while effortlessly making $500,000.
Halving May Not Solve the Litecoin Ecological Development Dilemma
In fact, in addition to the short-term price impact brought about by the halving narrative, users are more concerned about the long-term ecological development of Litecoin.
Today, as the POW leader and big brother, Bitcoin has seen rapid ecological development since the birth of the SegWit protocol in 2017. This has also shown people that besides its store of value, Bitcoin also has other possible applications, and it has also allowed miners facing the next halving to see the possibility of on-chain fee income in addition to block rewards.
Naturally, as a fork representative of Bitcoin, Litecoin also has high expectations for ecological development.
In May of this year, during the BRC 20 fire period, the Litecoin community released LTC 20, a fork version of the BRC 20 standard, which supports users to engrave NFTs, text, and other content on Litecoin.
Driven by the wealth effect of BRC 20, LTC 20 attracted a large number of users to enter the Litecoin ecosystem in a short period of time. Data once showed that on May 9th, the daily number of transactions on the Litecoin blockchain exceeded 570,000, and the number of active wallet addresses exceeded 810,000.
However, as the popularity of BRC 20 waned, LTC 20 had already fizzled out before entering the mainstream market.
According to Litescribe, the Litecoin engraving trading market, on August 3rd, the total market value of LTC 20-related assets was 27.91 million US dollars, with a trading volume of only 12.65 LTC.
Originally, many users had hoped that with the narrative boost of Litecoin's halving in August, the market's funds and flow would converge on Litecoin and promote the development of the Litecoin ecosystem.
However, from the current situation, most of the LTC 20 projects in the Litecoin ecosystem are imitations of the Bitcoin ecosystem, and speculative trading outweighs other aspects. The expectation of the halving narrative empowering the ecosystem development of Litecoin has not been seen in the current development. This is not good news for an old mining coin that has already faded from people's view.
If Litecoin is destined to be eliminated by the market and gradually disappear in the river of crypto history, it will not solve its ecological dilemma by relying solely on speculative price manipulation as it did before.
