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Charlie Lee Sums Up Litecoin’s 10 Years History. Part Five: Conflict Of Interest
It’s great that the founder decided to give us one more chapter of Litecoin‘s story. Let’s tie up loose ends and wrap this whole series with a bow on top. As it turns out, Charlie Lee returned to his job at Coinbase. Was the company more supportive this time around? Plus, as we warned you last time, at one point Lee sold all of his LTC. What were his reasons to do that? Did he have a plan? And, more importantly, did the plan work?
Related Reading | Charlie Lee Sums Up Litecoin’s 10 Years History. Part Two: Exchanges + Betrayal
Learn all of that and more in the concluding chapter of this legendary saga.
Charlie Lee Vs. Coinbase, Round Two
After successfully activating SegWit on Litecoin, Lee returned to his job at Coinbase. Ever the pioneer, this time he worked from home. The year was 2016. Once again, “given how successful the Ethereum launch was,” Charlie Lee tried to get Litecoin listed on Coinbase. “Brian reluctantly agreed to launch on GDAX only.” The predecessor to Coinbase Pro, GDAX stands for Global Digital Asset Exchange.
The launch didn’t go as Lee hoped. Because there was no launch. “For reasons unknown to me, Brian & Fred refused to do a full launch on GDAX & Coinbase like we did with ETH.” Even though Charlie Lee helped design ETH’s launch, which was a moneymaker for the company. To make things worse, “Fred had refused to let Coinbase hold any LTC and due to conflict of interest.” Which, if you think about it, might be the reason Charlie Lee is looking for. And serves as a link to today’s main story.
Since the exchange had no Litecoin liquidity, Charlie “had to personally lend Coinbase my own LTC.” As the following chart shows, Litecoin was the #4 coin at the time. It “almost matched Etheruem’s and LTC wasn’t even on Coinbase.” Was this a personal attack or does the conflict of interest narrative rings true to you?
It would have been easy to launch on both GDAX and Coinbase. Actually, it would have been easier since we already have a successful launch plan to follow. Coinbase basically had to go out of the way to cripple the Litecoin launch and not even hold any LTC to pay for miner fees.
— Charlie Lee (@SatoshiLite) October 12, 2021
So, Charlie resigned. The company asked him to stay a while to ease the transition. A few months later, with nothing to lose, Lee shot his last shot to try to get Litecoin listed on Coinbase’s main site. Surprisingly, Brian Armstrong agreed.
This was definitely not a staged tweet and reply. I actually didn’t expect Brian to reply at all, but I was extremely glad to see him agree with me.
So right away, I gathered the team together at Coinbase to launch Litecoin. I didn’t even talk to Brian after his Twitter reply.
— Charlie Lee (@SatoshiLite) October 12, 2021
Litecoin officially launched on Coinbase in May. On June 9th, Lee left the company for good.
Today’s my last day at @coinbase! I will miss working with you all.
I’m going to shift my focus to Litecoin now. To the moon! 😁 pic.twitter.com/Ys9dZwtTFO
— Charlie Lee (@SatoshiLite) June 10, 2017
The move was extremely successful. Lee estimates that Litecoin made Coinbase over $100M through that first year. “Brain even emailed to apologize for what I had to go through. He agreed that adding Litecoin was super lucrative for Coinbase.” Even though that happened, in his Twitter thread Charlie went for the jugular. “I guess you can blame me for turning Coinbase into a sh*tcoin casino that it is today.” Savage!
LTC price chart for 10/15/2021 on Exmo | Source: LTC/USD on TradingView.com
The Founder Sells All Of His Litecoin
The story you were waiting for. At the end of 2017, Charlie Lee sold all of his Litecoin. At the market top. In the thread, he doesn’t mention a conflict of interest, but that was the reason he wielded at the time. This time, Lee says that because of the fair launch, he didn’t have that much. He had to mine and buy his share, like everybody else. And that “Pretty much every other altcoin had a huge premine. Even Ethereum had like 70% coins premined.”
According to the founder, these were his objectives:
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Remove the fear of a Satoshi stash
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Make Litecoin more decentralized
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Align my motivation/incentive to Litecoin adoption versus LTC price rise
At the time, the move was controversial, to say the least. People assumed the captain was abandoning the ship. At the market top. However, Charlie Lee has spent four years leading the project, focused on Litecoin adoption and “not on the price of LTC.” Since then, they launched LTCpay, “a self-hosted merchant processing service,” and credit card backed by Litecoin. And they hosted a “Global Litecoin Summit” in September 2018.
Plus, they sponsored a UFC night and became “the Official Cryptocurrency of the Miami Dolphins.” for a while in 2019. By the end of 2020, PayPal announced Litecoin support. “PayPal did not reach out to me beforehand. Actual there’s no reason they needed to! Litecoin is a decentralized cryptocurrency after all. It was honestly very satisfying to see this happen.“
Related Reading | Charlie Lee Sums Up Litecoin ‘s 10 Years History. Part Three: SegWit Intro
Charlie Lee’s new project for Litecoin is fungibility. Read all about it in this thread. This new feature is almost done,”The code is being audited right now, and we are very close to releasing it. After release, it will take some time for it to be activated.” Lee expects this to happen in early 2022.
The author finished his epic thread with these two heartfelt tweets.
The blockchain for all intents and purposes is alive. I cannot shut it down and I know Litecoin will outlive me. These 10 years have been a wild ride. Here’s to 10 more. 🥂
It’s amazing what Satoshi Nakamoto has created. I am privileged to have played a tiny part in all of this. pic.twitter.com/1Zks4QzZbU
— Charlie Lee (@SatoshiLite) October 12, 2021
Congratulations on your 10th anniversary, Litecoin!
Featured Image: Litecoin 10 years from this tweet | Charts by TradingView
Charlie Lee Sums Up Litecoin’s 10 Years History. Part Four: SegWit Activation
Today is the day, Litecoin’s 10th anniversary. Congratulations to Charlie Lee and everyone involved in the project over the years. We are exploring Litecoin’s history through the eyes of its creator. We covered its fair launch, the long-hard road to exchanges adopting LTC, and we introduced the SegWit story. It’s time to finish it.
The last time, we introduced Bitmain’s co-founder Jihan Wu. Reportedly, he was singlehandedly stopping SegWit adoption in the Bitcoin blockchain. Lee’s plan was to use Litecoin as a Testnet of sorts for SegWit. “I realized that here’s a chance for Litecoin to do something to help Bitcoin. If we can get SegWit on Litecoin, it can clear out all the FUD and prove that SegWit is safe and a good upgrade for Bitcoin.” To accomplish that, he had to convince miners to side with him and not with the manufacturer of the most efficient ASICs.
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According to Coindesk, there was another important incentive for Litecoin to adopt SegWit:
“Since SegWit could potentially pave the way for technologies that expand the value proposition of cryptocurrencies, the move toward accepting the upgrade has reignited excitement around the normally less-popular cryptocurrency. Litecoin’s price has nearly tripled since the end of March as a result.”
And this is where today’s story starts.
LTC price chart for 10/13/2021 on FX | Source: LTC/USD on TradingView.com
Charlie Lee Talks To Litecoin‘s Miners
During the end of 2016 and the beginning of 2012, Lee talked to everyone. One of his first victories was to get “Innosilicon, another LTC ASIC maker,” to his side. In this part of the story, we can see how hard Jihan Wu was playing. A “huge LTC Miner” was ready to signal for SegWit in principle, but, since his machines were in a farm controlled by Jihan Wu, he was afraid that he might lose access to cheap electricity.
Innosilicon was immediately on board with SegWit. They agreed with me that it’s the best path forward. And they were able to convince some of their customers to support SegWit.
One of their customers was a huge LTC miner. He owned about 5% of the hashrate. Having him was huge.
— Charlie Lee (@SatoshiLite) October 8, 2021
The objective was to get “75% of blocks signal for SegWit within a 2-week timeframe.” Easier said than done. LitecoinPool was the first great pool to side with SegWit. Another big mining pool, F2pool, also promised to do it, but they didn’t right away. This turned out to be great for the cause because they provided a clear signal that the market supported the SegWit transition. Lee narrates, “over the next month, F2pool actually flipped flopped. They would signal and then stop signaling. The market reacted accordingly. When F2pool started signaling, the price will go up, and vice versa.”
To complicate things, “Jihan wanted me to personally visit him and the miners in China to convince them about SegWit.” Lee didn’t like the power-play, but that was nothing. As more and more miners signaled for SegWit, Jihan turned to the ace up his sleeve. There was a rumor that “Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade.”
Over the next week, more and more miners started signaling for SegWit and it started to look inevitable. And then this happened. Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade. 😡https://t.co/Zvs9srExJJ
— Charlie Lee (@SatoshiLite) October 8, 2021
It was time for Charlie Lee to call in the big guns.
The User Activated Soft Fork
Since both the miners and the market were clearly signaling in support of SegWit, Charlie Lee felt he had the right “to pull the UASF trump card out.” One of the wonders of decentralized organizations is that the users can also activate a soft fork. “If the majority of users and exchanges run the UASF code, SegWit will activate.” If that happened, miners had to comply and adopt SegWit as well.
UASF stands for User Activated Soft Fork. What it means is that instead of having the soft fork (SegWit) being miner activated, the user decides to activate the soft fork in a future date. If the majority of users and exchanges run the UASF code, SegWit will activate.
— Charlie Lee (@SatoshiLite) October 8, 2021
The threat of a UASF was too much to bear, so the miners agreed to meet with Charlie Lee online and work things out.
Yes we will do roundtable online with @SatoshiLite ASAP, not need to wait for June. https://t.co/rVWQjLu5kJ
— Jiang Zhuoer BTC.TOP (@JiangZhuoer) April 20, 2017
And the rest is history, “On April 21, I met with Jihan, Innosilicon, and miners for over 8 hours IIRC. It was exhausting.“ They reached an agreement, this is the blog post announcing it. Among other things, it says:
“We agree that protocol upgrade should be made under community consensus, and should not be unilateral action of developers nor miners. We advocate that Litecoin protocol upgrade decision should be made based on the needs of the users, through the roundtable meeting voting process, and activated by miner voting.”
Charlie Lee reflects, “Although this seems so bad for a decentralized cryptocurrency to have a closed door meeting to make decisions that affect the future of Litecoin, I felt like it was a compromise I’m willing to take. It’s better than an all out war between the miners and I.”
On May 10th, 2017, SegWit was activated on Litecoin.
SegWit has activated on Litecoin! 💥😁 pic.twitter.com/lpeklpQpZe
— Charlie Lee (@SatoshiLite) May 10, 2017
After that, a few historic transactions took place
“A lot of people have been saying that segwit is unsafe because segwit coins are “anyone-can-spend” and can be stolen. So lets put this to the test. I put up $1MM of LTC into a segwit address. You can see it’s a segwit address because I sent and spent 1 LTC first to reveal the redeemscript.”
- A few months later, Bitcoin activated SegWit through a UASF. “It’s hard to know exactly how much Litecoin helped with this. I feel like it definitely has helped.”
- Days later, Charlie Lee and Strike’s Jack Mallers starred in the first Lightning Network request/ payment transaction on Litecoin. That man Jack Mallers has a way to get involved in historic transactions, like this one, and this one.
- That same month, Lee did his first Atomic Swap transaction. “This shows how one can move coins between different chains in a decentralized way. It was a great proof of concept and paved the way for decentralized exchanges.”
- And later, he did another Atomic Swap but this time with Bitcoin.
- And the next month, Lee did “the first ever cross-chain swap between BTC and LTC via Lightning.” This time it was with the now world-famous Lightning Labs.
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Wasn’t that an amazing, amazing story? We learned so much. And, even though we said this was the last chapter in the Litecoin 10-year history, Charlie Lee has another story to tell. Join us tomorrow for the infamous story of Charlie selling all of his Litecoin. Another legendary moment in crypto land.
Featured Image: Charlie Lee's picture from this tweet | Charts by TradingView
Charlie Lee Sums Up Litecoin ‘s 10 Years History. Part Three: SegWit Intro
The last time we checked with Litecoin, its creator Charlie Lee left Coinbase to focus on his own project. The mission at hand was implementing SegWit in the Litecoin blockchain, which is easier said than done. This story is as exciting as they come. It has twists and turns and it ends with a bang. Through the following tale, we’ll learn a lot about consensus. One of the most mysterious aspects of the cryptocurrency space is how decisions are made. Are you ready to learn through a practical example?
Related Reading | Charlie Lee Sums Up Litecoin’s 10 Years History. Part One: Fair Launch
But before we get into it, let’s let Mr. Lee himself define Segwit:
“SegWit stands for Segregated Witness. It’s basically an upgrade that would separate out the signature (i.e. witness) from the transaction.”
By extracting the signature, the transactions occupy less space. So, there’s more space in each block to add more transactions. SegWit effectively increases the block size limit of the blockchain.
That being said, let’s get back to Litecoin ’s 10-year history.
Why Did Charlie Lee Wanted Litecoin To Implement SegWit?
At the time, in the Bitcoin network, miners were blocking SegWit. “Basically the fear was that once SegWit is activated, miners can steal any coins sent to SegWit addresses. Anyone technical enough knows that this was not true.” So, Lee’s plan was to implement SegWit on Litecoin to show everyone that the upgrade was safe, and thus help clear up the FUD that surrounded it.
Basically the fear was that once SegWit is activated, miners can steal any coins sent to SegWit addresses. Anyone technical enough knows that this was not true. It was not possible for miners to steal coins that way. Unfortunately Bitcoin testnet was not useful here.
— Charlie Lee (@SatoshiLite) October 8, 2021
Bitcoin’s Testnet wasn’t helpful in this case because its coins are worthless, so it doesn’t provide an incentive for bad actors to attack it. So, it couldn’t “test out the game theory of the blockchain.” On Litecoin, on the other hand, there would be “incentives for people to attack it. If miners can steal millions from anyone-can-spend coins, they would.” Besides helping Bitcoin beat the FUD, Charlie Lee had other reasons to implement SegWit in his project.
“So you may wonder why I’m pushing for SegWit. Litecoin does not have a block size problem. That’s right, and SegWit is not just a block scaling solution. I would even say block scaling is just a side benefit of SegWit. The main fix is transaction malleability, which would allow Lightning Networks (LN) to be built on top of Litecoin.”
LTC price chart for 10/12/2021 on Gemini | Source: BTC/USD on TradingView.com
The Foundation Of The Litecoin Foundation
A quick subsection, because this series is about Litecoin’s history. While the SegWit story evolved, Warren Togami stepped down as lead developer. Shaolin Fry joined the team specifically “to help us get SegWit activated on Litecoin.” Loshan and Thrasher also joined to help with the code.
Xinxi Wang (@TheRealXinxi) and Franklyn Richards (@LitecoinDotCom) joined me as Director to the Litecoin Foundation and we had Loshan (@loshan1212) and Thrasher (@thrasher_au) as developers working on the code.
People started to become excited about Litecoin again!
— Charlie Lee (@SatoshiLite) October 8, 2021
At the same time, they created The Litecoin Foundation with Xinxi Wang, Franklyn Richards, and Charlie Lee himself as Directors.
Enter The Bad Guy Of The Movie
It’s time for the Litecoin and SegWit story to meet that legendary period known as The Blocksize War. At the time, mining was a relatively centralized affair and Bitmain was the… main player. They produced the “most efficient ASICs” and miners were heavily incentivized to vote with them… or else.
“The co-founder of Bitamin, Jihan Wu,is a big supporter of scaling Bitcoin onchain,” Lee informs. That means, he was against SegWit and against The Lightning Network as scaling solutions. Jihan Wu was in the camp of simply forking Bitcoin to increase block sizes, a notion that the community ended up rejecting. However, at the time, Wu was singlehandedly stopping SegWit adoption in Bitcoin. And he had great influence over Litecoin too.
Unfortunately that became very contentious. Because Jihan had a lot of influence, he single-handedly was able to block SegWit activation on Bitcoin. And because Bitmain also made one of the most efficient Litecoin miners, he had a lot of influence on Litecoin miners also.
— Charlie Lee (@SatoshiLite) October 8, 2021
So, how could Charlie Lee and his band of misfits circumvent this huge obstacle blocking their way? “The difference between Bitcoin and Litecoin is me,” he said. “Bitcoin is more decentralized. There’s no one to come out to speak on what their vision of Bitcoin is.” Lee could and did promote his support of SegWit among the miners and try to seduce some of them to vote his way. “Anyways, this was what I set out to do. I met and talked to many miners throughout the end of 2016 to early 2017.”
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We know that his plan worked, but it was a lot harder than expected. Jihan Wu had the resources and influence to render his efforts obsolete, plus he had an ace up his sleeve. How did Charlie Lee proceed? How did he make SegWit on Litecoin happen and who stepped up to the plate to help him? Find all of that and more in tomorrow’s next and final episode of Litecoin ‘s 10-year history.
Featured Image by InstagramFOTOGRAFIN from Pixabay - Charts by TradingView
Charlie Lee Sums Up Litecoin’s 10 Years History. Part Two: Exchanges + Betrayal
The creator of Litecoin, Charlie Lee, continues to guide us through memory lane. For part one, he took us through Litecoin’s fair launch. Considering the small number of projects that have managed to do this, it’s a pretty big achievement. Today, for part two, we’re going to cover the project’s relation with cryptocurrency exchanges. Charlie Lee wears his heart on his sleeve for this one, and tells a heartfelt story that ends up in betrayal. Can you feel the excitement in the air?
Related Reading | Charlie Lee Predicts Resurgence of Litecoin as Bitcoin Cash Falters
This part of the story is all about relationships, connections, and the long road to credibility. It’s also about Charlie Lee’s resistance and willpower.
Before we get into the meat and potatoes of the story, though, a light detail that shouldn’t go unnoticed.
Charlie Lee Gives Flowers To The Litecoin Logo Creators
There’s not much story to the logos, but it’s cool that Charlie Lee gives credit where credit is due. The first and the second one show evolution:
The second logo was designed by @mjbmetals. I still like that quite a lot. It looks well next to that Bitcoin logo.https://t.co/T5hzEldonI pic.twitter.com/Uy5qpl8JUP
— Charlie Lee (@SatoshiLite) October 7, 2021
And the final one is a simplification of the second one:
And the current logo is designed by Robbie Coleman (@robertfcoleman) and his team.
Of course being decentralized, there are many other logos that people have created and used. Some are pretty wacky. And people can use whatever logo they want and I can’t do anything about it. 😂 pic.twitter.com/M7FgBcGPum
— Charlie Lee (@SatoshiLite) October 7, 2021
That being said, let’s get back to the story.
LTC price chart for 10/09/2021 on Coinbase | Source: LTC/USD on TradingView.com
Litecoin’s Long Hard Road To Exchange Listings
This contradicts the title, but, in 2011 Litecoin was immediately listed in the defunct BTC-e. The site was a pretty successful cryptocurrency exchange that fell into disgrace when the US Justice Department accused them of laundering funds from the Mt. Gox hack, but that’s another story. Regarding Litecoin, Charlie Lee tells us that the listing, “helped a lot as miners had access to liquidity pretty quickly. Litecoin quickly become one of the most popular coin on BTC-e.”
From 2011 to 2013, I spent a lot of time supporting Litecoin’s early growth and pushed for adoption wherever I can. I pretty much talked to all the exchanges to support LTC. I realized that liquidity is super important for a coin. Without liquidity, you can’t do anything.
— Charlie Lee (@SatoshiLite) October 7, 2021
However, even though Lee “pretty much talked to all the exchanges to support LTC,” it was two years later that the second one listed Litecoin. Bitfinex took a chance on the nascent project, “This was a huge deal for Litecoin. It’s the first major exchange to support LTC.”
At the Bitcoin 2013 conference, I remember attending a talk by Bitstamp Co-Founder and CEO Nejc Kodrič( @nejc_kodric). During the Q&A after the talk, I asked him if Bitstamp will add Litecoin. I think he just chuckled and went to the next question.
— Charlie Lee (@SatoshiLite) October 7, 2021
Then, Charlie Lee remember how he tried to get the CEO of Bitstamp to list them and he laughed him off. Only to list the coin in 2017. The same thing happened with BitPay, who ended up supporting Litecoin only this year.
The Chinese exchanges, though, listed Litecoin from the beginning. “Sometime late 2012 to early 2013, 2 of the largest exchanges in China, Okcoin and Huobi, added support for LTC. That was huge.” A question arises, did Charlie Lee have to throw shade at those two exchanges this hard? “The trading volume was also pretty crazy, but unclear how much of that was fabricated.”
In 2013, I thought it was time for me to step away from Litecoin. I was very fortunate to find Warren Togami (@wtogami), Founder of the Fedora Project, to take over as Litecoin lead developer. Warren is amazing and we were very lucky to have him at the helm of development.
— Charlie Lee (@SatoshiLite) October 7, 2021
Charlie Lee And Coinbase, A Love Story
So, in 2013 Charlie Lee steps down as Litecoin’s lead developer and leaves the job to Warren Togami. At the same time, he leaves a high-paying job at Google because they weren’t interested in anything crypto-related. That’s when Coinbase gets into the picture. Lee contacts them to see if they’re interested in listing Litecoin and they end up hiring him instead.
I interviewed at Coinbase and on paper, it sounded like a horrible deal. I would have to commute to SF, which was an hour each way, take a 50% or so pay cut, work twice as hard, and miss out on all the Google perks. But it was a no-brainer for me.
— Charlie Lee (@SatoshiLite) October 8, 2021
According to Charlie Lee, “Coinbase was the hot startup and THE crypto company that is making Bitcoin easy to use. I knew that if Bitcoin didn’t succeed, Litecoin wasn’t going anywhere either.” A cold hard truth that all of the Altcoins have to live with to this day. Besides that, Lee wanted to eventually convince Coinbase to support Litecoin. How could he not?
But at least he created a cool banner for it. 😁https://t.co/7BToh7YNdX
After that, there were rumors of @MtGox finally adding its second coin, Litecoin. At the time MtGox had like 97% of the total Bitcoin trading volume. Support of LTC would be huge for Litecoin’s liquidity. pic.twitter.com/rfBhA7z1Pm
— Charlie Lee (@SatoshiLite) October 8, 2021
The Chinese connection paid off and the BTC China, lead by Charlie Lee’s brother, listed the coin. “Although it was a huge news, what took him so long?!,” asks Lee hilariously. Also notice that the banner that he mentions plays on the fact that Charlie and Bobby are brothers.
In 2015, there were rumors that the infamous Mt. Gox exchange was going to list Litecoin. At the time, this was THE place to be. Charlie Lee finally confirms the story, “The rumors were actually true. I was talking to the CEO, Mark Karpelès almost on a daily basis in mid 2015.” However, the Mt. Gox hack was exposed before they materialized those plans. And all hell broke loose. “In hindsight, it was a blessing in disguise.”
Then, as it happens, things turned sour in the Charlie Lee and Coinbase romance.
That changed though in 2016. The was when Litecoin trade volume exploded on Chinese exchanges and it was clear to me that Coinbase was leaving a lot of money on the table by not supporting altcoins. And it made business sense for Coinbase to add altcoins.
— Charlie Lee (@SatoshiLite) October 8, 2021
The Brian Armstrong tweet he refers to says: “Ripple, Stellar, and Altcoins are all a distraction. Bitcoin is way too far ahead. We should be focused on bitcoin and sidechains.” Wow. What would the Brian Armstrong of the present say about that statement?
Anyway, in 2016 Litecoin’s trading volume was exploding in the Chinese exchanges and Charlie Lee saw his opportunity. “This was also when Ethereum was starting to get big. So I put together a proposal to Brian and Fred Ehrsam to add both LTC and ETH to Coinbase.” The proposal’s thesis was that, since people in the US had no easy way to buy, store, and trade those coins, there was “a lot of unsatisfied demand.” And Coinbase could make a lot of money.
There was a lot of unsatisfied demand. People in the US had no easy way to store and trade these coins. And Coinbase would steal a lion share of the demand if we added the 2 coins to start.
Both Brian and Fred like the idea but they crossed out LTC. They just want to do ETH.
— Charlie Lee (@SatoshiLite) October 8, 2021
Here it is: betrayal. The two Coinbase executives broke Charlie Lee’s heart by accepting the proposal, but only for Ethereum. “Although I went along with the plan, it kind of rubbed me the wrong way. Litecoin had a much higher global trade volume at the time and was the #2 coin in marketcap.” A little while later, Lee took three months of Coinbase to focus on his project.
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In the next episode, Litecoin’s story intertwines with Bitcoin’s and the controversial Segwit implementation. We’re going to discover that Charlie Lee and his team were instrumental in this. How? Tune in to find out.
Featured Image by Executium on Unsplash - Charts by TradingView
Charlie Lee Sums Up Litecoin’s 10 Years History. Part One: Fair Launch
The creator of Litecoin, Charlie Lee, is ready to celebrate the coin’s 10th anniversary. What better way to do it than by giving the public the oral history of Litecoin. Of course, that’s a figure of speech. Since it’s 2021, he gave us that “oral history” through a Twitter thread. And what a thread it is. It takes us back to the very beginning of the cryptocurrency space and, using documentation and images, lets us in on the secrets, the inner jokes, and the wholesomeness of times past.
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In this first installment, Charlie Lee will cover the most crucial part of the story: Litecoin’s fair launch. Buckle up people, it’s going to be a wild ride!
Charlie Lee On Altcoin’s Prehistory
A lot of projects saw the light of day after Bitcoin and before Litecoin. He names:
- Namecoin.
- Ixcoin
- Iocoin
- Solidcoin
- Tenebrix
And somberly declares, “Every one of these coins are now dead.” According to Charlie Lee, the reason for their demise was a lack of fairness. “Most of these altcoins have a huge premine. Tenebrix for example had 7 million coins premined. That means the creator has incentives to pump the coin to a high price so he/she can profit massively without much work.”
Most of these altcoins have a huge premine. Tenebrix for example had 7 million coins premined. That means the the creator has incentives to pump the coin to a high price so he/she can profit massively without much work. You get things like creators bribing exchanges for listing.
— Charlie Lee (@SatoshiLite) October 7, 2021
Then, Charlie Lee gives us the definition of “Ninja mining.” “If a coin was not premined, you get things like ninja mining. That’s when a coin is released silently to friends and family.” And tells us that some of those projects launched without releasing the source code to the public. The kicker, of course, is that Litecoin was a response to all of that nonsense. Fairness was crucial, and it’s the main reason the project still exists today.
LTC price chart for 10/08/2021 on Kraken | Source: LTC/USD on TradingView.com
Litecoin’s Prehistory
After Charlie Lee settled on the name Litecoin, his first action was to buy all the related domains. “What a great move in hindsight. So now, we don’t have something like http://litecoin.com promoting Litecoin Cash instead of Litecoin. $38.85 well spent!” Shots fired! Friendly shots, though, but shots nonetheless.
The best part was that all the domains were available. So on 10/4/11, I bought them all on GoDaddy. What a great move in hindsight. So now, we don’t have something like https://t.co/TFymqt9pKY promoting Litecoin Cash instead of Litecoin. $38.85 well spent! 😂 pic.twitter.com/ur0ckkHMsh
— Charlie Lee (@SatoshiLite) October 7, 2021
An interesting fact that Lee gives us is that, even though coding the coin was easy, the hardest thing to create was the genesis block. “The hardest part was actually to create the genesis block. Satoshi never documented how he did it and the code to do that was not checked in with the Bitcoin source code.” So, he did “some reverse engineering” and created this block right here. And then, Charlie Lee gives us another amazing factoid. “What a lot of people didn’t know is that I put the headline of Steve Job’s death in the genesis hash. This proves that the genesis block was created after 10/5/11.”
So I had to do some reverse engineering and managed to create the genesis block on 10/7/11https://t.co/lArbbucLGU
What a lot of people didn’t know is that I put the headline of Steve Job’s death in the genesis hash. This proves that the genesis block was created after 10/5/11. pic.twitter.com/Zn7tnRBgUM
— Charlie Lee (@SatoshiLite) October 7, 2021
Litecoin’s launch thread in the legendary Bitcointalk forums is an archeological artifact from forgotten times. The story starts with:
“Litecoin is the result of some of us who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. We wanted to make a coin that is silver to Bitcoin’s gold. Various alternative currencies have come and gone. Some brought innovation, but they all had problems.”
A hilarious story is that a young Vitalik Buterin hated the Litecoin name and said so in the launch thread:
I forgot to mention that I chose Litecoin because Litecoin is the lighter version of Bitcoin. It’s faster, cheaper, and easier to use.
And we got to see a young & unknown (at the time) @VitalikButerin hating on the name. I prefer Litecoin over Etherium. Wait, is it Ethereum? 😂 pic.twitter.com/kCLUUNbiel
— Charlie Lee (@SatoshiLite) October 7, 2021
Back to the Twitter thread, Charlie Lee tells us, “The code was available for anyone to download and compile. So they can check the code to make sure.” And later on, that “People were able to immediately mine on testnet to make sure everything works on their system. This is very important.” The table was set for…
Litecoin’s Fair Launch
Since everyone that wanted to was “prepared to mine at launch,” Litecoin had the coveted fair launch. “To accomplish this, I of course had to share the genesis block with everyone. But I can’t just do that because people can mine a long chain in private from that genesis block.” And then, Charlie Lee reveals how he hid it.
Without those 2 parameters, one cannot start mining on the mainnet, but they can easily mine on testnet.
So I lied, there was a 2 block premine of 100 coins. 😂
The genesis coins cannot be spent.
Then I did a poll on what time we should launch the coin:https://t.co/BWvGGFjNBN pic.twitter.com/AuXkqMB4QT
— Charlie Lee (@SatoshiLite) October 7, 2021
And he confesses, “So I lied, there was a 2 block premine of 100 coins. The genesis coins cannot be spent.” However, he had already told this to the community in that Bitcointalk thread:
“Litecoin will come with 150 premined coins: just the genesis block and the first 2 blocks to confirm the genesis is valid.“
Related Reading | Litecoin Foundation’s Project Director Makes The Case For LTC’s Network Effect
Then, Chalie Lee created a poll to ask the community when to launch. The option that he wanted didn’t win. Since fairness was what he aimed for, he prepared everything for the day the small community had decided. And then, he rickrolled them!
Over the next few days, I did everything to help people get their system set up.
A few minutes before the actual launch time, I posted this. Of course this was a link to Rick Astley’s video. I had to. 😁 pic.twitter.com/isJIRPhEDv
— Charlie Lee (@SatoshiLite) October 7, 2021
Then, he posted the missing configuration parameters on the Bitcointalk thread and everybody was off to the races.
At launch, I posted the config paramters that were needed to mine on mainnet. All everyone had to do was paste that into their litecoin config file, restart their client, and they will be happily mining real LTC.
Of course, there was a mad rush of people mining LTC at the start. pic.twitter.com/ZyUcQ1UEe3
— Charlie Lee (@SatoshiLite) October 7, 2021
And, as they say, the rest is history. To close this chapter, Charlie Lee leaves modesty aside, “I think I managed to pull off the fairest launch of any coin. And that is one of the biggest reasons why Litecoin succeeded. Surprisingly, very very few coins copied Litecoin’s launch.”
I think I managed to pull off the fairest launch of any coin. And that is one of the biggest reasons why Litecoin succeeded. Surprisingly, very very few coins copied Litecoin’s launch.
Ok, that’s it for now. I will tweet more later about what happened between launch and now.
— Charlie Lee (@SatoshiLite) October 7, 2021
Tomorrow, join us and Charlie Lee to remember what happened between the launch and the present. The article is going to be as full of easter eggs and amazing stories as this one.
Featured Image: Screenshot from the Bitcointalk forums | Charts by TradingView
Crypto asset manager Valkyrie raises $10M in Series A round
Digital asset manager and Bitcoin (BTC) ETF proponent Valkyrie Investments recently concluded a $10 million Series A funding round, once again highlighting growing investor interest in crypto-focused firms.
In addition to Charlie Lee, who is a well-known entrepreneur in the cryptocurrency industry, the funding round also saw participation from XBTO, BTC Media, UTXO Management, Consolidated Trading and 10X Capital. Interestingly, former Major League Baseball pitcher CJ Wilson was also among the investors, as was Tron founder Justin Sun.
Valkyrie CEO and World Bank veteran Leah Wald said her firm is focused on broadening investor access to cryptocurrencies in a “managed, research-driven manner that ultimately provides best-in-class products to all kinds of investors.”
Referencing Wald and Steven McClurg, Valkyrie’s chief investment officer, Litecoin founder Charlie Lee said:
“Leah and Steven have a great vision for how they want to bring investment opportunities to market, and I couldn’t be happier to support them on this journey.”
The asset manager currently offers three crypto-focused funds providing exposure to Bitcoin, Polkadot and Algorand. In January 2021, Valkyrie filed an application with the United States Securities and Exchange Commission, or SEC, to list a Bitcoin exchange-traded fund. However, unsurprisingly, the SEC has delayed its ruling on the proposed fund.
Related: World’s first Bitcoin ETF adds $3M per day throughout BTC price dip
As Valkyrie’s latest investment round demonstrates, venture funds continue to back crypto startups with ever-growing conviction. This comes even as Bitcoin and the broader cryptocurrency market met the technical definitions of a bear market in the second quarter. While analysts remain divided about the overarching market theme of Bitcoin, the more than 50% drop from peak to trough met the technical threshold of a bear trend.
Is Litecoin Seriously Underrated? Here’s Why Crypto Traders Should Pay Attention, According to Coin Bureau
A popular crypto trader is analyzing the Bitcoin fork Litecoin (LTC) and whether it’s appropriately valued in today’s market.
Litecoin, which is resting at around a $14 billion valuation after the harsh crypto-correction this week, has many of the qualities Coin Bureau’s pseudonymous host looks for in an asset.
The host, who goes by the name Guy, asserts that Litecoin, which has been around since 2011, “has not just survived, but thrived” since its advent.
“It has all four qualities I mentioned… A use case as a medium of payment, super robust tokenomics, global awareness and adoption, and the best slogan in crypto: the silver to Bitcoin’s gold.”
Guy notes that Litecoin’s recent bullish price action prior to its crash back down to the $200 range, may be fueled by institutional demand, as crypto investment giant Grayscale reportedly ate up 80% of the mined Litecoin (LTC) supply this past February.
Additionally, Litecoin, created by developer Charlie Lee, one of crypto exchange Coinbase’s earliest employees, is somewhat more efficient than Bitcoin, and was created in such a manner that it could become decentralized than the leading cryptocurrency as well.
“Litecoin uses a special proof of work (PoW) consensus mechanism called Script. Script was meant to make it possible to mine LTC using a regular computer. This would make the Litecoin blockchain more decentralized as anyone would be able to participate on the network.
This is in contrast to Bitcoin’s Sha-256 mining algorithm which was only minable using specialised computers called Asic.”
Guy also notes that Litecoin (LTC) developers are working faster than BTC developers, meaning that it could be improved faster than the leading store-of-value digital asset.
However, perhaps LTC developers are not working quickly enough, and perhaps not transparently enough, warns Guy. He also references the fact that back in 2017, in one of the biggest crypto scandals to date, Charlie Lee sold all of his Litecoin stack, which some considered traitorous, while Lee considered the move crucial to Litecoin’s future success.
“In practice, Litecoin seems to be lacking in more than one department. For one transparency has not been its strong suit and there’s no question that Charlie Lee selling his Litecoin back in 2017 was bad optics.
As hard as the Litecoin developers are working, it seems like a slow pace of development, though it has still been much faster than Bitcoin.”
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Litecoin creator draws parallels between 2021’s NFT and 2017’s ICO mania
Charlie Lee, the creator of major cryptocurrency Litecoin (LTC), believes that the ongoing spike in popularity of the nonfungible token, or NFT, industry has much in common with the 2017 initial coin offering, or ICO, mania.
Lee provided at least five similarities between 2021’s NFT popularity and 2017’s ICO mania, also comparing both to the altcoin craze in 2013 in a tweet on Tuesday.
According to the Litecoin creator, all three cryptocurrency phenomena look very similar, as they are easy to create “with no barriers” and simple to understand and explain. Lee noted that NFTs, ICOs and 2013’s altcoins also have a big similarity in terms of adoption — as all of them bring, or used to bring, “tons of new people into crypto.”
Similar to the high prices and pumps of altcoins in 2013, ICOs and NFTs are associated with massive hype and fear of missing out. However, “Few will hold and have value,” and most people did not or will not own them, Lee concluded.
Lee previously expressed some bold criticism over the NFT industry, claiming in February that NFTs have “zero cost” of creation. “Because of the near zero cost to create another NFT, the market will eventually be flooded with NFTs from artists trying to cash in on this craze. Supply will overwhelm demand and the prices will eventually crash,” the creator of Litecoin predicted.
Lee is not alone in thinking that NFTs are the new ICOs, as many crypto enthusiasts have drawn parallels between the two major concepts in the crypto industry recently. Michael Goldstein, president of the Satoshi Nakamoto Institute, also tweeted Monday that “NFTs are the ICOs of 2021.”
Andrew Kang, a crypto investor and co-founder of Mechanism Capital, also took to Twitter Tuesday to pinpoint that NFTs have become increasingly popular among celebrities who may “rug all their fans,” implying they are purely looking for profits.
Representing a new method for digitally buying and selling art and other media, NFTs have indeed gotten attention from popular celebrities recently, including Canadian musician Grimes and Linkin Park rapper Mike Shinoda. Celebrity endorsements apparently make up another solid parallel between NFTs and ICOs, as a number of ICOs in 2017 were largely supported by celebrities, including American music producer DJ Khaled and American actor Steven Seagal.
As NFTs Continue to Boom, Charlie Lee Shares His Thoughts on Fungibility
The innovation of Non-fungible tokens (NFTs) in the world of blockchain promises to introduce a new means for authenticating ownership of digital artifacts.
Understanding NFTs
Non-fungibility refers to these tokens’ uniqueness and indivisibility, which means that NFTs can’t be exchanged for other tokens as they hold special features and valuation.
These unique tokens can act as the ultimate proof of ownership, ensuring that artists are reimbursed for their efforts and collectors can purchase and trade the tokens with ease.
While sharing his thoughts on NFTs, Litecoin creator Charlie Lee took issue with the non-finite nature of NFTs. He noted in a series of tweets that it takes zero cost to create an unlimited number of these tokens.
“Because of the near-zero cost to create another NFT, the market will eventually be flooded with NFTs from artists trying to cash in on this craze. Supply will overwhelm demand, and the prices will eventually crash,” the crypto enthusiast explained.
Lee added that he had created a unique Chikun NFT, which cost him nothing except the gas fee on Ethereum. He argued that should the demand for his Chikun NFT shoot up, other artists could get in on the action by creating identical Powered Chikun tokens, resulting in diminishing value.
NFTs are a Hot Topic
Charlie Lee’s views on the artificial scarcity of NFTs come just days after the subject dominated talks at the just concluded ETH Denver virtual conference.
Over the past year, numerous NFT-backed games saw significant advancements in player bases and governance, propelling the technology into the limelight in the crypto space.
The weekly volume of the non-fungible token’s market now stands at about $8.2M as the tech continues to garner adoption in gaming and collectibles. Even celebrities like Rick and Morty creator Justin Roiland are now turning to NFTs to distribute art and interact with fans virtually during the Covid-19 induced lockdowns.
As a result, NFTs are starting to see some serious adoption, with recent Dune Analytics data showing that traffic on popular NFT marketplace Opensea is beginning to curve parabolic.
Speaking during the ETH conference, Alex Salnikov of Rarible noted that collectibles and gaming aren’t the only fields where NFTs play an increasingly significant role. He argued that smart contracts’ technical advancements are leading a boom in DeFi and creating more use cases for NFTs.
Opinion Is Divided on NFTs
While NFT critics contend that these tokens have non-finite attributes, many proponents argue that they are scarce and authenticable on the blockchain.
Some detractors also cite concerns over the inability of NFTs to stimulate real-world volume, adding that NFTs such as digital paintings can only be purchased and held instead of being traded.
On the other hand, NFT advocates argue that these tokens hold great promise in expanding the digital resource economy and reshaping the future of collectibles.
NFTs may well represent the blockchain’s next frontier; the new landscape’s eventual maturation will undoubtedly result in exploding real-world volumes and thriving markets as new use cases emerge.
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