Litecoin (LTC )has been one of the best-performing big-cap tokens over the last several months, and its hashrate just hit a new all-time high, signaling some potential bullish activity on the network.
After falling to a low of $40.60 back in July 2022, LTC has risen by more than 125% from its 2022 low, outperforming ETH and BTC over the same period.
The importance of hashrate for Litecoin
The calculated numerical value of the hashrate is generated by active Litecoin miners during a process known as proof-of-work, generated by miners who use their collective computing power to solve increasingly complex blockchain algorithms on the network. Essentially, the more digital picks and axes digging around, the higher the hashrate and the more participants actually using the network.
Some analysts say that increases in hashrates are indicative of a stronger, more secure network.
A higher hashrate means that more miners are participating in the network, thus making it difficult for bad actors to launch what is known as a 51% attack, as they would need to yield control of a greater proportion of the network’s hashrate in order to make such an attack viable.
However, sudden surges in hashrates can have some potentially negative impacts on a cryptocurrency as well, given that with all the increased computational power now needed to mine a coin, this, in turn, requires more energy, which can lead to a higher carbon footprint and negative impact on the environment, research has shown.
Another potential drawback of a sudden surge in hashrates is that it may be more difficult for small and individual miners to compete. This can lead to a more centralized mining ecosystem, analysts say, where only large mining pools or corporations with significant computational power and capital are able to mine and earn rewards.
Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.
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