Often dubbed "the silver to Bitcoin's gold," Litecoin shares many properties with the world's oldest and most famous cryptocurrency. Both assets have a fixed scarcity, a proof-of-work (PoW) mining system, and, crucially, both have pre-programmed halving events.

However, many crucial differences exist between Litecoin and Bitcoin halving. But before we explore them, let's take a deeper look at what a halving event is and its impact on the broader crypto market.

In the world of cryptocurrency, halving events protect a coin from inflation. While fiat currencies can suffer from inflation due to an abundance of cash in circulation, cryptocurrencies like Bitcoin and Litecoin have regular halving events to prevent their devaluation.

Traditional currencies rely on a central body imposing higher interest rates and other measures to calm inflation. However, a crypto's decentralized nature means no governing body will help prevent issues like this. That's why halving events are an excellent means of protecting a crypto's scarcity.

For instance, the total capped supply of Litecoin is set at 84,000,000 LTC, and once this limit has been reached, there will be no fresh supply of LTC to be mined. You should check out our primer on Litecoin halving if you want to know more about this event in the context of this coin.

Halving events work by literally halving the blocks produced on a cryptocurrency's network, which slows the rate of new assets created in reaching this number. At present, Litecoin's circulating supply stands at just over 72.5 million, meaning fewer than 12 million coins can still be minted.

Although Bitcoin operates a similar halving setup, both halving events have many critical differences. So let's take a deeper look at the differences to keep in mind:

Bitcoin's four-yearly halving events may operate in a similar timeframe to Litecoin, but the dominance of BTC means it carries a different impact on the market.

As CoinMarketCap data shows, Bitcoin's market dominance has rarely been challenged within the cryptocurrency landscape, so the impact of Bitcoin halvings has always carried more weight than that of Litecoin.

While Bitcoin's 2016 halving saw many coins reach new all-time highs in 2017 and early 2018, and Bitcoin's subsequent 2020 halving event led to a widespread market rally in 2021, Litecoin's halving events, which have thus far occurred in 2015 and 2019 have failed to produce the same significant movements.

In fact, looking at CoinGeck's Litecoin price chart, we can see that Litecoin's biggest rallies have come in the wake of Bitcoin halving events rather than on its own.

With no significant correlations between Litecoin's halving events and the asset's performance, it can be more difficult for investors to discover purchasing opportunities for LTC.

Although Litecoin is set to undergo its halving event in 2023, with Bitcoin's next halving occurring in 2024, Litecoin actually trails its older counterpart by three years. This means that LTC will simply replicate Bitcoin's 2020 halving event in real terms.

This is because the LTC awarded to miners this year will fall to 6.25, the same rate as Bitcoin today. When Bitcoin's next halving event occurs in 2024, its reward for miners will drop to 3.125. To know more about Litecoin's halving rate and more, check out our quick guide to mining Litecoin.

While Litecoin's fixed supply amounts to 84,000,000 coins produced, Bitcoin's is limited to just 21,000,000. Because of this, miners have to deal with a severely limited supply of Bitcoin as opposed to LTC.

This has caused cryptocurrency commentators to acknowledge Litecoin as the silver to Bitcoin's gold. As such, more miners are likely to turn their attention to the considerably more scarce BTC than opting to tap into the far more widespread supply of LTC.

On the flip side, this also means that the volume of LTC available to miners is considerably higher than that of BTC. With CoinGecko data suggesting that there are now fewer than 1.7 million BTC left to mine, and with future halving events limiting the volume of BTC to be mined further, it's likely to take more than 100 years for the final Bitcoin to be mined.

If you're asking, "How many Litecoins are there? How many are left to be mined?" The answer is 11.5 million LTC as of the time of writing, more than six times greater than Bitcoin's remaining supply.

Although it may be fanciful for investors to expect Litecoin's upcoming halving event to lead to significant price movements, it will undoubtedly play an important role in galvanizing a cryptocurrency market still seeking a change in fortunes following 2022's crypto winter.

Litecoin's halving event will represent one of the cryptocurrency market's most significant moments of the year and drive more market sentiment toward the asset. The event itself will be pivotal in highlighting the scarcity of LTC, of which 87% of coins have already been mined, so this can be significant should market demand follow.

It may be that Litecoin's halving event will be a catalyst in driving demand back to one of the cryptocurrency marketplace's oldest assets. Should sentiment revert to Litecoin, we may see an impressive price rally from one of the ecosystem's old favorites.

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What's the Difference Between a Litecoin Halving and a Bitcoin ... - MUO - MakeUseOf