- Binance Pool’s hash rate for Litecoin has dropped by more than 50% over the past seven months.
- The shift in mining power, coupled with the impending Litecoin halving event, signals potential market volatility.
In a turn of events that could potentially shake up the crypto market, Binance Pool’s hash rate for Litecoin has dropped significantly. As of July 25, on-chain data reveals that the hash rate dedicated to Litecoin’s proof-of-work network has decreased by more than 50% over the past seven months.
Unpacking the Hash Rate Decline
In crypto mining, the hash rate represents the collective computing power allocated to a network, ensuring its security, decentralization, and transaction confirmation. Currently, Binance Pool is supplying approximately 28 TH/s of hash rate to the Litecoin network, a significant drop from its January 2023 average of around 69 TH/s.
This shift has led to Binance Pool losing its standing as a dominant Litecoin mining pool, falling to the 7th position in the mining pool rankings, accounting for about 3.6% of the total hash rate share.
Interestingly, despite Binance Pool being backed by Binance, the world’s largest crypto exchange, miners are increasingly turning towards other pools. Competitors such as Poolin, F2Pool, and viaBTC now hold higher rankings. These changes indicate a possible shift in miner preference towards some of the earliest mining pools in the global scene.
The reasons behind this shift remain uncertain, although it is noteworthy that Binance is facing legal issues in several countries, particularly in the United States. Both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have sued the exchange for alleged violations of securities laws.
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The Current Mining Landscape
Based on the hash rate, viaBTC now controls the largest share in Litecoin mining, contributing to 33% of the total Litecoin network hash rate. F2Pool and antpool follow with market shares of 17.2% and 13%, respectively. Litecoin Pool and Poolin also supply more computing power than Binance Pool.
In this competitive mining landscape, miners must pool their resources and dedicate hash rate through a mining pool. Despite its drop in rankings and hash rate, Binance Pool continues to play a vital role in proof-of-work mining networks, including Bitcoin.
A Glimpse into Litecoin’s Future
Looking ahead, Litecoin miners currently earn 12.5 LTC and transaction fees for each block mined. However, this reward is expected to halve in the coming weeks, affecting block mining revenues. This impending halving, combined with a potential price increase, could inspire miners to upgrade their equipment and deploy higher hash rate miners.
As of now, Litecoin has a total hash rate of approximately 780 TH/s, with the network releasing 7,200 LTC to miners daily. The upcoming supply shock, coupled with the hash rate drop, leaves the future of Litecoin prices uncertain. Notably, past cycles hint at a possible rally, but the market awaits to see if history will repeat itself.
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