Following the mining reward halving in August, Litecoin (LTC) hashrate chart displays a tremendous decrease in the hash power. That just confirms all the problems that LTC’s ecosystem is facing since the halving. The lower reward may have put miners out of the job since their equipment is no longer profitable. Be that as it may, it has pushed the hashrate down to the lowest values this year.
Litecoin hashrate graph 60% down – miners fleeing
To better depict what is really going on, we have reached for Coinwarz’s hashrate charts.
Litecoin reached the highest hashrate on July 14th, with 511 Th/s. However, that was only because miners probably wanted to use the time left before the halving. Halving happened on August 5th and since then, miners have been abandoning ship.
The Litecoin hashrate chart above shows that the current rate is just below 200 Th/s, which is a bit more than 60% from July’s value. If LTC supporters aren’t worrying yet, now they should start. The hashrate decline means that the overall security of the network has dropped which may lead to all kinds of security issues. Naturally, potential security issues can lead to a further price decline.
Halving (and a few other things) gone wrong
Halving is a mechanism that was originally incorporated into Bitcoin’s system to keep a certain level of asset scarcity. Of course, scarcity means that there is the potential for the price of the asset to rise. However, it seems that that isn’t the case with Litecoin.
Miners obviously evaluated that the possible scarcity-driven price rally will not be enough to cover for their losses caused by the halving. Therefore, they have turned off their equipment or put it to good use elsewhere.
Moreover, the creator of the network, Charlie Lee revealed that there is low interest for contributing to the Litecoin code among the developers. This means that market rivals could eventually leave LTC behind. Tech-wise as well as price-wise. Nevertheless, this may not concern Lee too much as he publically declared that he sold his LTC during the 2017 bull run.
Meanwhile, Litecoin’s price also keeps declining since early July. Currently, it stands at $57, which is an 87% drop from $145 on June 27th.
Nonetheless, it is still early after the halving and results will be visible in 6 to 12 months. Finally, it always took Bitcoin about a year to materialize on the halving.
Will something similar happen to Bitcoin?
Litecoin is a fork of Bitcoin. As such, it shares many similarities with the first cryptocurrency. Looking at the described situation, this may be a good warning sign for all those anticipating the Bitcoin halving and skyrocketing price in the aftermath. Will miners also flee towards other cryptocurrencies? Will their support for other assets lead to a big change in the market? That remains to be seen.
However, there is a positive detail for BTC enthusiasts. Satoshi never publically announced that he sold all his Bitcoins. Even if he did, nobody would believe that he is the real Nakamoto.