Litecoin Hash Rate Hits Record High: Is It a Crucial Sign of Confidence?

According to Litecoin.com and the data published by BitInfoCharts, the hash rate of Litecoin achieved a new all-time high on April 8 at 359 terahash.

The rapid increase in the hash rate of the Litecoin blockchain network, which represents computing power that protects and secures the protocol, comes amidst the demonstration of a strong performance of LTC in recent months.

Potential Factors of the Rise of the Price and the Hash Rate of Litecoin.

While a noticeable increase in the hash rate of any blockchain network is generally considered a positive indicator of confidence, arguments are often made that improvements in hardware and mining equipment can lead the hash rate to rise.

The recent surge in the hash power of the Litecoin network was likely affected by the momentum of the short-term price trend of LTC. But, it is possible that the overall improvement in the efficiency of mining equipment may have fueled the network's hash rate.

Why LTC Price Seems to be Going Up. In 2017, JP Vergne, a professor at Ivey Business School, discovered in a study that developer activity is the most accurate predictor of the price movement of a cryptocurrency.

The study released by Vergne entitled "Buzz Factor or Innovation Potential: What Explains Cryptocurrencies' Returns?" noted that while new cryptocurrencies consistently emerge, if they are not backed by active development, investors may lose confidence.

Although it can be claimed that there could be cryptocurrencies that are more sophisticated than Litecoin, the activity of the open-source developer community of Litecoin in implementing solutions such as Confidential Transactions and Mimblewimble may have led to the rise in the confidence of investors.

"Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy. I am now focused on making Litecoin more fungible by adding Confidential Transactions."

If the activity of the open-source developer community of Litecoin is the primary driver of the price and the hash rate of the cryptocurrency, then it is likely that as long as the objectives set forth by Lee and other developers are met in the medium-term, the momentum of the asset could be sustained.