Litecoin Completes Third-Ever Block Reward Halving

Litecoin, the second-oldest blockchain network, completed its third block reward halving on Wednesday.

The Litecoin network will now issue 6.25 LTC as rewards for miners with each block, down from 12.5 LTC.

Litecoin’s block reward halving reduces issuance of new LTC by 50% for every 840,000 blocks processed, with LTC’s supply expected to reach its limit in the year 2,142.

LTC is down almost 6% in the past 24 hours after rallying by about 30% in the six weeks leading up to the issuance change.

Bitcoin Halving

The milestone comes as anticipation for Bitcoin’s fourth block reward halving is growing, with the event expected to occur around April next year. Historically, Bitcoin halvings have preceded or extended bull trends for Bitcoin and the broader crypto markets.

Block reward halvings function as a disinflationary mechanism for LTC’s supply. Without a coin-burning mechanism, Litecoin cannot become deflationary in the same sense as Ethereum, where the burning of base transaction fees offsets validator rewards and drives down the supply of ETH over time.

Transaction Fees

In a recent Twitter live stream, Litecoin founder Charlie Lee said transaction fees generated from increasing on-chain activity are expected to subsidize the income of miners.

“Satoshi chose four-year block halving so that it gives enough time for the network to grow in time for the fees to eventually take over,” Lee said. “The idea is that there will be enough usage on-chain creating enough fees. The fees will be enough to pay the miners to continue to help secure the network.”

The Litecoin Foundation teamed up with Ballet, a cold storage card manufacturer founded by Bobby Lee, Charlie Lee’s brother, to commemorate the event. Ballet will sell 500 cards made from 50 grams of silver ($40) loaded with 6.25 LTC.

The revenue generated from selling the cards’ sales will be donated to the Litecoin Foundation to support development and adoption, Charlie Lee said.