Litecoin Creator Charlie Lee Shares Insights About BSV Being Delisted, Litecoin’s Reward Halving, IEOs, POW and POS
(The audio version of the article: https://play.ht/articles/e795003d-2ad3-4146-ab42-7b90c7b11764)
On April 25, Litecoin creator Charlie Lee shared his insights at 499Block about trending topics such as BSV being delisted, Litecoin’s reward halving, IEOs, POW and POS. Here is the full summary.
(Note: 499Block is a female-led crypto community in China. )
Cindy: I have been following your twitter for years. I found that you are quite a low key these days. The latest tweet is about BSV being delisted. Do you believe Binance is really doing the right thing?
Charlie: Yes, I’ve been less active on Twitter. I found that a lot of the chatting back and forth on Twitter is distracting from real work and not that useful. Too many trolls and haters on Twitter.
I think Binance should not have listed BSV in the first place. BSV is a fully centralized coins and CSW is constantly attacking Bitcoin and even Bitcoin Cash. So I think it’s the right move to delist BSV to send a message. It’s not ok to start suing Bitcoin users.
Plus their plan to patent things and suing people with patents is just not cool. CSW is the total opposite of what everyone’s idea of how Satoshi would act, so I don’t know why so many people believe him to be Satoshi.
Cindy: You were active in the bitcoin scaling debate. Now as both small and big blockers get their way. Do you think bitcoin still face the scalability problem?
Charlie: Unfortunately the debate has not gone away. People like Roger are still constantly “attacking” Bitcoin by claiming Bitcoin Cash is the real Bitcoin. So there’s still a lot of animosity even though there are 2 coins now. I do think Bitcoin will always have a scalability problem. Decentralization and scalability is always a tradeoff. Because decentralization is by definition inefficient. And inefficiency is hard to scale. I think Lightning will help Bitcoin scale without sacrificing decentralization. Whereas with Bitcoin Cash, scaling on chain will eventually kill decentralization. There’s still a lot of work to be done on layer 2 solutions like Lightning.
Cindy: I remember that you and Roger had a bet about LN.
Charlie: Yes, the bet was that there will be 1000 merchant accepting LN within 18 months. I think Roger already lost because CoinGate supports LN for more than 4000 of their merchants.
Cindy: How can we improve Bitcoin and Litecoin to become money or world money we aspire?
Charlie: Fungibility is the only property of good money that is missing in Bitcoin and Litecoin. Fungibility is the concept that ever coin is identical from every other coin. So you can’t discrimate against the coins you received. This is not the case with Bitcoin/Litecoin because you can track their history. So Coinbase can ban a user if it detects that the user deposited their coins from a darknet marketplace. This is not good money when there’s no fungibility. To get fungibility, you need privacy. So they go hand in hand. I think privacy/anonymity is extremely important for money. And that is why I’m working on adding MimbleWimble (the technology in Grin) to Litecoin. That’s something we are focused on this year. We will of course still keep up to date with all Bitcoin technology improvements.
Cindy: So if MimbleWimble were successfully added in LTC, do you think it will be added in Bitcoin?
Charlie: That I don’t know. We will see. But I do believe Bitcoin will become more and more fungible in the future.
Developers will work on fungibility improvements for Bitcoin.
Cindy: Bitcoin’s price overcame the $4200 resistance mark, which might mean it already bottomed out. BCH also performed well. What will Litecoin look like as it is to implement reward halving?
Charlie: No one really knows what the price will do. The reward halving might be why LTC is doing so well price-wise in 2019. Maybe the price will go up more before the halving, or people might take profit. It’s hard to say. I always tell people to average cost in when buying and average cost out when selling.
Cindy: The news that Litecoin Foundation partnered with Ultimate Fighting Championship (UFC) is very eye-catching. Would you please tell us more details about it? Like who made this partnership possible, etc? Are there official members of the Litecoin team working on the marketing and promotion job?
Charlie: The partnership was a last minute thing. Our community manager, Ilir Gashi, works for UFC’s parent company. And he saw the opportunity and introduced us to the UFC. We thought it was a good way to give Litecoin more exposure. And also it’s a strong statement that a global brand like UFC would work with us. They are very picky in terms of what brands that are willing to partner with. Litecoin Foundation’s Director of Projects, David Schwartz, is the one working on all these projects. We also have many great volunteers that help us a lot.
Blair: The crypto space is full of new terms concerning fundraising. First ICOs, now IEOs. What’s your stance towards IEOs?
Charlie: IEOs are basically ICOs that are vetted by the exchange and will be listed on the exchange. So they are higher quality and will have immediate, or near immediate, liquidity. So from an investor’s point of view, IEOs are definitely better than ICOs. This also means that projects need to up their game to be good enough to be selected by the exchanges for IEO. So that’s good for everyone. The only downside with IEOs is that regulation will likely treat them no different than ICOs. When regulators start cracking down on ICOs, they will likely crack down on IEOs. But that’s just my guess.
Cindy: So you support ICOs or IEOs be regulated?
Charlie: I think for consumer protection, they should be regulated. But I have no influence on that at all.
Blair: Ethereum is switching to the POS mechanism. Do you see a future in it?
Charlie: POS and POW are totally different consensus systems. I think they both have a place. For decentralized money/currency, I think POW is better. For smart contracts, POS might be perfectly fine. But there are definitely a lot of issues they need to work out. I’m looking forward to see what Ethereum does with POS.
Blair: Bitcoin’s block reward will halve in 2020. Most people argue that mining would be profitable only when bitcoin’s price remains at an insanely high level. If bitcoin’s price is no longer attractive to miners, any chances that bitcoin developers will change the consensus mechanism of bitcoin?
Charlie: I don’t agree about mining needs bitcoin price to be high. Mining works at any Bitcoin price. Mining is a nash equilibrium. If price is low, some miners are priced out and they stop mining. Difficulty falls and the rest of the miners are profitable again. So I’m not worried about a low price. I don’t think the bitcoin developers will change the consensus mechanism and even if they do, users may not follow. In the end, the users are in control, not the developers and not even the miners are in control.
Blair: Do you think it’s like revolutionizing themselves for crypto exchanges to work on decentralized exchanges? What are problems with current centralized exchanges?
Charlie: There are 2 aspects of decentralization of exchanges. There’s the decentralization of the exchange platform and there’s the non-custodial aspect of it. Current crypto exchanges like Binance are working on “decentralized” exchanges that are non-custodial. These aren’t true decentralized exchanges. With true decentralized exchanges, you don’t need to ask anyone for permission to list a coin or trade a coin. The problem with true decentralized exchanges is that they are inefficient. It’s a tradeoff. A decentralized exchange could never compete with a centralized exchange in terms of performance, and performance is critical for traders. So I’m not sure if we will see a successful truly decentralized exchange anytime soon. As for non-custodial exchanges, it makes sense for companies like Binance and Coinbase to be working on them. Holding customer’s funds is hard and it present an existential threat to the exchange because if they get hacked it could kill the company.
Blair: You travel a lot. Do you feel any differences between the western and the eastern crypto communities?
Charlie: Westerners see cryptocurrencies as money and asians see cryptocurrencies as a way to make money. So asians are more speculative. Nothing wrong with that. Asians are good at making money, but we are also gamblers at heart.
Blair: Do you have any good advice for females in this industry? Or any suggestions to our 499Block Blockchain Community?
Charlie: Females are no different than males. You need to figure out what you’re good at and how you can apply yourself in this industry. As a community, I think you should make some noise and let people know there are so many females in this industry. I’m happy to see that. Crypto is why too male-dominated.