No one cares about the halving, how can the long-silent Litecoin get out of the ecological development dilemma?

Original author: Grapefruit, ChainCatcher

At 23:00 on the evening of August 2, Litecoin (LTC) completed the third block reward halving at block height 2520000, and now the reward for each block is 6.25 LTC.

Usually, the halving event will trigger market attention and discussions, often accompanied by narratives of rising cryptocurrencies.

However, the four-year halving narrative of Litecoin, which has always claimed to be "Bit Gold, Lite Silver", has not attracted much attention from users in the encryption market. Litecoin-related discussions are rarely seen in the encryption community, and there are only a few news related to the countdown to the eve of halving.

As a representative of POW tokens in ancient times, Litecoin's token price performance after halving will determine the user's attention to it. Before and after the halving, the token LTC also performed mediocre in the secondary market. According to Coingecko, the drop was 5% in the past 14 days. The price did not fluctuate much on the day of halving. It fluctuated slightly as usual, with a drop of 4.4%. The current quotation is $86.3.

However, just a few days before the halving, Litecoin founder Charlie Lee (Charlie Lee) and his brother announced that they will jointly launch 500 "Litecoin halving silver commemorative physical cards", each card is made of 50 grams of silver. There are 6.25 LTC in the package, the tentative price is 1,000 US dollars, and the estimated revenue is at least 500,000 US dollars. This behavior was also ridiculed by users as: Litecoin seems to be useless, and the founder brothers can only use hot spots to sell cards to make money.

When the founder was selling cards during the halving period, as a user, he was actually more concerned about whether the halving could bring back the attention of Litecoin, which had been silent for a long time? Can it have a positive impact on its ecological development?

On the eve of the halving of Litecoin, no one cares about it, and the secondary market is deserted after the halving

This halving is the third halving in the history of Litecoin since its launch in 2011. However, judging from the reaction of the encryption market, it was a little deserted, and its token LTC also fell in the secondary market.

The halving design of Litecoin refers to Bitcoin. According to the halving schedule defined in its protocol, the halving cycle occurs every 840,000 blocks (about once every four years). Each halving means that miners will only You can get half of the rewards before the halving.

As of August 3, 2023, the Litecoin halving event has been completed three times. The first time was in 2015, the block reward was reduced from the initial 50 LTC per block to 25 LTC; the second time was in 2019, the block reward was halved from 25 LTC per block to 12.5 LTC; the third time was This time on August 3rd of this year, the block reward was reduced from 12.5 LTC per block to 6.5 LTC.

By analogy, the fourth halving of Litecoin will occur around 2027, when the block reward will be reduced from 6.5 LTC to 3.125 LTC.

The total number of LTC tokens issued is 84 million, and the current circulation is about 73.5 million. About 87% of Litecoins are in circulation. The current market value is about 6.34 billion US dollars, ranking 12th among encrypted assets.

The halving narrative that occurs every four years is often regarded as good news by the encryption market, especially the halving of Bitcoin often means that it will be accompanied by a bull market. Because the design of halving or production reduction is usually to avoid the problem of token inflation, the price is more conducive to rising by controlling the supply. Therefore, whenever a halving occurs, it will attract the attention and discussion of the encryption market.

The halving occurs in the Token of the POW mechanism, which has the greatest impact on its network and related miners (such as mining pools, mining machine manufacturers), because halving means that the number of mining rewards will decrease, the difficulty will increase, and the cost of mining will increase significantly. This will have a direct negative impact on the network. After the income decreases, some miners will leave or switch to mining other mainstream tokens, and the security of the network will be tested.

People usually think that halving will lead to price increases. There are two main reasons. One is that the reduction of miner rewards after halving is equivalent to an increase in cost, which will theoretically drive up the price of tokens; the other is from the perspective of supply. It will break the dynamic balance of output, resulting in a decline in the supply rate of tokens. If the demand remains the same or increases, then the demand will be greater than the supply due to the reduction in supply, which may cause the price of tokens to rise.

However, the rise in token prices after halving is not inevitable. The price of cryptocurrencies is the result of a combination of factors, including the macro environment and overall market sentiment. For example, the price of DASH tokens, which completed the production reduction on June 23 this year, has remained at around $30 for more than a month after the production reduction.

Before and after the halving of Litecoin this time, there were very few discussions and news related to the encryption community. Some users even asked in the community, "Will LTC be halved tomorrow?" Many users replied, "No one cares anymore, and everyone doesn't care about this ancient POW coin anymore."

In addition, regarding the halving of Litecoin, most users' views are "short". In this regard, crypto player Lin mentioned: "During the bull market in 2021, the Litecoin Foundation official tweeted and reposted a false message that Wal-Mart supported LTC payments, and then deleted it, but this caused very large fluctuations in the market, so I understood at the time The original mainstream currency can only rely on news to manipulate the market, and there is no consensus to dominate the market. In the long run, the halving of LTC is not worthy of attention.”

On the day of the halving, LTC experienced a short-term decline in the secondary market, with an intraday drop of 4.4%, and the current quotation is $86.3. This seems to further verify users' bearish predictions about its halving.

The founder launched the "Halved Commemorative Silver Card"

When Litecoin community users are paying attention to the halving market, Litecoin founder Charlie Lee (Charlie Lee) and his brother Bobby Lee (Bobby Lee) jointly launched a physical collectible card made of 99.9% pure silver " "Halving Commemorative Silver Card", used to commemorate Litecoin's four-year halving event, is expected to sell for $1,000 each.

On July 27th, Charlie Lee and his brothers announced in a live broadcast about the halving of Litecoin that they jointly produced 500 silver physical collection cards made of 99.9% pure silver to commemorate the third Litecoin known as silver. halving.

Bobby Lee is the CEO and co-founder of Ballet, the maker of cold-storage cryptocurrency special cards (similar to supermarket gift cards).

According to the introduction, each silver card is made entirely of 50 grams of 99.9% sterling silver (also known as "999 sterling silver"), and only the silver coins are worth $40 per card. In addition, this card will be preloaded with 6.25 LTC, The tokens are worth about $555, which means the card itself is now estimated to be worth about $595. Expected to sell for around $1,000, the premium is a potential expectation for buyers. In addition, Charlie Lee stated that all proceeds from the sale will be donated to the Litecoin Foundation to promote the adoption and development of the blockchain.

According to Bobby Lee, the collectibles are about the size of a credit card and have double-layered QR code stickers, with the top layer showing the Litecoin deposit address and the hidden bottom layer showing the encrypted private key (EPK). The passphrase 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 drops to zero, it will still be worth 50g of silver. In addition, he also said that some of these silver cards may also be auctioned, such as the first 20, 21, etc., and the rest will be sold at a fixed price, which has not yet been decided.

At present, the Litecoin halving commemorative silver card has not yet been launched, and it is reported that it will be sold sometime after the halving in August.

The issuance of the "Halving Commemorative Silver Card" jointly launched by the two founders of Litecoin can be said to kill two birds with one stone. With the help of the Litecoin halving event, the Ballet cryptocurrency gift card website not only gained the attention of users, but also earned at least $500,000 by the way. This move was jokingly called by users, the two founder brothers of Litecoin can be said to be the most active people in the currency circle, and they easily circled 500,000 US dollars while promoting the project with the help of hot spots.

Halving may be difficult to solve the ecological development dilemma of Litecoin

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, since the birth of the Ordinal protocol in 2023, the POW leader, Bitcoin, has seen its ecological development in full swing. Half of miners see the possibility of on-chain fee income in addition to block rewards.

Naturally, Litecoin, as a fork of Bitcoin, is also expected to have high ecological development.

During the BRC 20 fire in May this year, the Litecoin community launched the BRC 20 standard fork version LTC 20, which supports users to engrave NFT, text and other content on Litecoin.

Driven by the wealth creation effect of BRC 20, LTC 20 has attracted a large number of users into the Litecoin ecosystem in a short period of time. According to data, on May 9, the number of daily transactions on the Litecoin chain exceeded 570,000, and the number of active Litecoin wallet addresses exceeded 810,000.

However, as the popularity of BRC 20 cools down, LTC 20 has been shut down before entering the mainstream market.

According to Litescribe, the Litecoin inscription trading market, on August 3, the total market value of LTC 20 related assets was 27.91 million US dollars, and the trading volume was only 12.65 LTC.

Originally, many users hoped that under the blessing of the halving of Litecoin in August, the capital and flow of the market would be focused on Litecoin, which would promote the ecological development of Litecoin.

However, judging from the current situation, most of the LTC 20 projects in the Litecoin ecosystem are imitations of the Bitcoin ecosystem, and there are more hypes than others. The expectation of Litecoin halving narrative empowering ecological development has not been seen in the current development, which is not good news for the old mining coins that have faded out of people's vision.

If it does not solve its ecological dilemma just by hyping the currency price as before, Litecoin is destined to be eliminated by the market and gradually disappear in the long river of encryption history.