Litecoin just had its third halving, which marks another crypto milestone. As one of the earliest crypto projects, LTC is recognized as “the lite version of Bitcoin”. Thanks to its superior throughput, faster transactions, and lower fees. Litecoin creator Charlie Lee modelled the LTC halving, a major feature of the coin, after the underlying design of Bitcoin.
Like Bitcoin, Litecoin also halves the block reward approximately every four years to ease inflation. In the early days, this mechanism was introduced to control the influx of LTC into the market. So that the coin would not be devalued by excessive inflation or suffer a liquidity crisis due to severe deflation.
LTC miners will bear the brunt of the halving. In the LTC network, the mining revenue consists of the block reward and miner fee (excluding DOGE rewards), with the former accounting for over 90% of the pie. Miners have seen a 50% drop in their daily coin production following the halving. This drives up the cost, and they will face potential losses if the LTC price fails to keep up with the rising cost.
Besides, the BTC mining community will have to confront the same challenge after the BTC halving next year. How should miners improve their mining experience to navigate halving?
01 Upgrade to Mining Rigs with Larger Hashrates
As miners cannot control block rewards or coin prices, they focus on the hashrate arms race. In today’s miner community, one of the primary strategies is to obsolete outdated models. That fall below the shutdown price and to maximize their mining performance, thereby staying ahead even in the worst-case scenario.
Models like ANTMINER L7 and WhatsMiner M50S++ come with a cost of roughly 20-40% of the revenue. They are great options to mitigate halving risks, allowing miners to continue their operations without having to shut down, even if the post-halving market uptrends do not materialize as expected.
02 Smart Mining: Auto Switch Between BTC and BCH for Maximum Revenue
According to ViaWallet Explorer, the BCH halving is expected to take place on April 5, 2024, with 35,588 blocks remaining. The BTC halving, which is 38,691 blocks away, is projected for April 27, 2024. Although the exact dates may vary, the BCH halving will happen before the BTC halving. By then, miners will be able to optimize returns by switching their hashing power to the most profitable coin, provided they joined a pool like ViaBTC Pool that features [Smart Mining].
03 Financial Tools: Capture Opportunities with Crypto Loans and Hedging Service
As mining operations become more specialized, miners have to acquire more skills to thrive in the complex, volatile crypto market. Apart from know-how on mining rigs, proficiency in financial tools will also give miners an edge. Miners who can master financial tools often maximize the returns on existing funds and achieve greater capital efficiency compared to those solely focusing on mining.
ViaBTC offers two financial tools, [Hedging Service] and [Crypto Loans]. Based on traditional financial principles, they help miners maximize returns using limited funds under different market conditions.
*Find out more about Crypto Loans and Hedging Service at:
https://www.viabtc.com/finance/loan-tutorial
https://www.viabtc.com/finance/hedging-tutorial
In a market downturn, miners proficient in financial tools can borrow coins through [Hedging Service] and sell them at current market prices to secure profits in advance. Similarly, during bullish periods, they collateralize assets for more liquidity via [Crypto Loans], instead of dumping the cryptos they mined.
Conclusion
So far this year, the BTC hashrate has grown by nearly 50%, and the LTC hashrate has gone up by almost 40%. As traditional giants like BlackRock, Deutsche Bank, and Fidelity Investments embrace crypto, the mining industry has been presented with new growth opportunities. The rising hashrates, fast iterations of mining rigs by upstream manufacturers, and global regulatory uncertainties present mounting challenges for miners focusing on small-scale operations. To survive in this dog-eat-dog world, small-scale miners must always stand ready to improve mining strategies and adjust fund allocation.
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