The monetary policies for POW coins are shockingly primitive. Centralized authorities having the ability to print money and spend it however they want is obviously a problem. Not only does POW decentralize the ownership of a currency, most of them come built in with the block reward halving event to promote scarcity and lessen inflation in an atmosphere of hyper-inflation terror.

Personally I think the halving event is a bad idea. I think the most consistent POW coins will eventually have no halving event. The reason for this is that the halving event creates these insanely volatile cycles in between said events.

As far as gambling on the market is concerned, this is actually kind of nice because this somewhat predictable volatility creates a lot of opportunity to capitalize on all the FUD, FOMO, and just normal market cycles.

However, this volatility also burns a lot of people and makes them skeptical of the market. Would it really be so bad if Bitcoin blocks rewarded 50 coins every 10 min? Linear inflation is not that big of a deal, especially as the pool grows very large and the percentage of the linear inflation becomes less and less of the total pool.

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A POW coin with consistent inflation will have less volatility and act like more of a currency.

Just look at Steem. Do we have consistent inflation? Nope! Because when the market goes crazy we are printing out SBD like it's $1 when it is actually worth much more than that. All those SBD that we create are guaranteed to be liquidated only after the market crashes into the dirt. There's an easy fix for this problem,, but there are very few who can actually sign off such a thing and make it a reality.

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In the end, this thought experiment is pointless. We have what we have, so let's take a look at the facts and make some conjectures.

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Here we see Bitcoin's first halving event November 28, 2012. The market didn't know it was a big deal, so there was no speculation regarding the fundamental gain. Four months later, there is a pump and dump, but the dump is very light and most everything stays in the green.

It takes a full year for the liquidity drain to fully kick in and a bear market to begin.

Of course you can't really call it a bear market because they are really just corrections. Bitcoin went x100 in a year and then went ÷10 a year after that. Yeah, not a bear market. Bitcoin has never been in a bear market. It has shown nothing but explosive exponential growth since its inception.

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Here we see the second Bitcoin halving on July 9, 2016. The market has wised up to the idea that lower inflation is super bullish. There's a pump and dump here with the halving date right in the middle.

For quite some time the market must have been quite disappointed with the outcome; the exact same thing that just happened with Litecoin. However, when the fundamental gain of reduced liquidity actually starts to kick in (~4 months) Bitcoin goes on another year long run of insanity that no one can believe. Then we had the audacity to say the next year of corrections was a bear market, once again.

The Litecoin halving event is a bit harder to analyze. This is because Bitcoin is heavily linked to Litecoin and big events on Bitcoin create big waves on Litecoin as well.

For example, I believe the most recent Litecoin dump wasn't from halving speculation, but from the Bakkt pump/dump crash on Bitcoin. This is one reason why I'm uber bullish on Litecoin right now. It might capitalize on both of these fundamental gains over the next year in tandem.

Greedy market

We see the market did the same foolish pump and dump regarding the Litecoin halving event. These gains can't be captured early, but we can certainly count on the market to try every time because the market is dumb and will forever be dumb and impatient.

News

All the news I've read basically discounts the Litecoin halving as a flop. I feel like I'm living in the twilight zone. It's been less than 2 months. Does everyone have amnesia?

Conclusion

Personally I think there are a lot of better projects out there than Litecoin. Steem is one of them. However, from a speculation point of view, this doesn't matter. Litecoin has a solid community that isn't going anywhere, and the fundamental gains from reduced inflation have already proven themselves multiple times.

There may be a lot 'better' projects out there than Litecoin, but in my opinion no project can currently compete with the fundamental gain of a halving event over the next 10 months.

Combine this with a firm tether to Bitcoin (the world's top asset class ever) and you really have something.

Litecoin is going to moon over the next year,

and everyone will act surprised.

#shill