The Litecoin hashrate is down 60% due to the latest block halving which occurred on 5 August 2019. Since peaking in July, the network hashrate has fallen considerably, as mining profitability has reduced significantly.

What is Litecoin?

Litecoin is the 6th largest cryptocurrency according to market cap. At the time of writing, Litecoin is worth $3,613,648,507, with a total supply of 84 million LTC, with the current litecoin price at $55.17. Litecoin was founded in 2011 by Charlie Lee, a former Google employee and Engineering Director of Coinbase.

Litecoin was originally a software fork of Bitcoin, and works on a Proof-of-Work consensus algorithm. This means that miners are compensated with fees for validating transactions on the network. Litecoin has a finite coin supply, so the network needs to generate enough usage to fairly compensate miners and maintain a good hashrate once the total supply is reached.

INVEST IN CRYPTO NOW

Your capital is at risk.

Hashrate down

Litecoin’s halving happened on 5 August 2019, when the reward for mining a block dropped from 25 LTC to 12.5 LTC. The Litecoin hashrate has experienced a significant drop, reducing from 523 T/H to 181 T/H in a little over three months which also affected the litecoin price.

Litecoin hashrate down more than 60% in 3 months

👀 pic.twitter.com/lOtASQerAc — hodlonaut🌮⚡🔑 (@hodlonaut) November 4, 2019

Litecoin mining profitability has reduced substantially, which has caused many miners to switch off their mining equipment or move to other networks. This decrease in mining activity is not exactly a good sign for Litecoin. A lower hashrate means that participation in the network is reduced, which further decreases the security of a Proof-of-Work (PoW) blockchain like Litecoin.

However, the Litecoin halving is widely considered to be a positive long-term move for the blockchain, as it decreases inflation. In the meantime, miners will need to cover the shortfall of their operating costs, which leads to the decrease in hashrate and causes mining profitability to fall.

Improving profitability

While things might not be looking good for Litecoin on the surface, the fact that it’s built on a PoW blockchain actually benefits it. Even with a falling hashrate, there are some positives to be found. A lower hashrate means that hashing blocks becomes less difficult. So, Litecoin’s difficulty has fallen by 60% – coinciding with the decreasing hashrate.

The difficulty adjustment mechanisms helps to balance mining profitability, and can help smooth things out when the hashrate falls. Litecoin should recover when miner interest picks up.

While the Litecoin hashrate is down 60% due to the latest block halving, it’s not all doom and gloom for the coin. The Litecoin halving has affected the mining profitability and the hashrate, but there is still a chance for recovery in the near future. With that being said, things are definitely not looking so good for the cryptocurrency at this point in time.

INVEST IN CRYPTO NOW

Your capital is at risk.

With eToro CFD trading you can make money by anticipating the market. Ready to make some money off of Litecoin? Learn more at www.etoro.com, the world’s leading social trading platform.

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.