On 27 April 2018, Charlie Lee, the creator of Litecoin (LTC) and the managing director of the Litecoin Foundation, spoke with Dr. Julian Hosp, co-founder and president of TenX (PAY), in a YouTube interview, and gave his thoughts on Litecoin (LTC), Bitcoin (BTC), and Bitcoin Cash (BCH). In this article, we examine the highlights from this interview.

How Litecoin Got Started

  • “I was working at Google when I created Litecoin.”
  • “They didn’t really know about it… I mean it’s an open source project and people work on open source all the time…  It wasn’t realy much of a thing when I started working on Litecoin when I was at Google…. So they didn’t care.”

Original Vision for Litecoin

  • “I always saw Litecoin working closely with Bitcoin, being kind of a complementary coin where people use both Bitcoin and Litecoin for different purposes.”
  • “I always thought that Bitcoin won’t be the one coin that is the only coin… So because of Bitcoin’s focus on being the most decentralized and censorship-resistant coin, I always thought that the fees would go up, so Litecoin can play a role where it’s cheaper to use but, also I guess, a little more centralized and a little bit less security…. So it can complement Bitcoin pretty well on that aspect.”

Comparison of Litecoin with Bitcoin Cash

  • “Bitcoin Cash is very similar to Litecoin… And like most of the alt coins out there, it has lower fees, there’s less people using it, so the blocks aren’t full, so it’s quicker.”
  • “The only difference with Bitcoin Cash is that it [Bitcoin Cash] wants to kind of replace Bitcoin… It basically wants to be a better Bitcoin, but I think it’s having a hard time doing that .. I think it’s the wrong approach trying to also attack the Bitcoin brand… I think it’s all pretty silly.”

Decentralized vs Centralized

  • “I think it is great that Bitcoin’s creator, Satoshi Nakamoto, left the scene… And it made Bitcoin more decentralized… If he is around, then everyone will kind of focus on on him… and it makes a coin more centralized, which is the case with Litecoin.” 
  • “Litecoin is more centralized because I am around. It has a more centralized development team. It has a more centralized foundation. I can help steer Litecoin towards my vision, and people will listen to me because I created it. So what is good about it is that we can be more efficient. A hard fork where there’s a split in the middle would be harder on Litecoin because of this. And the downside is that it is a little more centralized than Bitcoin. So, if somehow governments or something coerced me into kind of destroying Litecoin, that could happen. And it becomes less censorship-resistant because if I have to, I can push for something that could hurt Litecoin.”
  • “I think with a fully decentralized currency like Bitcoin it’s still doing fine…  It’s still adapting to things… It’s just a little bit slower, it’s less efficient… It is kind of like comparing democracy and benevolent dictatorship… Democracy is better but it’s less efficient.”
  • “I think eventually I will have to step away. For a currency to really be a worldwide decentralized currency, you can’t have a real leader trying to control things. To make it more decentralized, eventually, I will step away.”
  • “The fact that I had Litecoins and people were thinking that I might dump it on the market was an issue… So selling all my Litecoins was the first step of moving towards a more decentralized currency.”

Litecoin as a Form of Payment

  • “The goal is to make spending crypto easier than using credit cards or whatever ways people are spending money.”
  • “Crypto debit cards are a stepping stone.” 
  •  “In the future that I am envisioning, where cryptocurrency becomes more stable and where fiat currenchy is the one that is very volatile, the merchants will just keep their balances in crypto.”

Governmental Cryptocurrencies vs Public Cryptocurrencies

  • “I think it it’s inevitable that we will have governments releasing their own currency that is backed by fiat currency, but Bitcoin and Litecoin will always be better because it’s decentralized, it’s not controlled by any third party… So I see decentralized currencies working side by side with government-backed cryptocurrencies.”
  • He expects that government issued cryptocurrencies will be used for paying taxes. Also, he says that governments can make sure all merchants accept them, but public cryptocurrencies will be kind of like gold and silver; not every store will accept them but they are better places “to store your money long term.”

The Mining Algorithm

  • “So I don’t think I want to touch that… I think its fine… Initially, Litecoin was ASCI-resistant…  when the community is really small, the users are the miners, and those are the people that are advocating for the coin…  so, it’s important that anybody can become a miner… And everyone was a Litecoin miner that supported Litecoin… As the coin grew, it was not as important anymore for anyone to be a miner… So having ASICs is fine and it is really protecting the coin… I think Litecoin has one of the strongest mining networks after Bitcoin… So I don’t think we need to change the algorithm.”
  • “I don’t really believe in proof-of-stake… I think proof-of-work is still the best consensus algorithm for a decentralized currency… proof-of-stake could be fine for a currency like Ethereum, but I think for Litecoin, proof-of-work is still the best.”

Changing the Total Cap on Coins

  • “I have actually thought about that quite a bit recently.”
  • “I think it is something that I am thinking about whether it is a good solution to propose to the community.”
  • “It’s hard to say what’s going to happen when we start reaching the limit because right now Litecoin works because the mining reward is paying for the security… When that goes to zero and you rely on fees, and if the fees are not enough because of the block size constraint, then what happens.. the security will drop… So is it better to have some constant small amount of inflation every year, have that fixed, and have that pay for the security or can transaction fees be enough to pay for the security… We won’t really know until many years later down the road, but it is something that I am kind of thinking far into the future what would happen.”
  • Gut feeling for what will be the right direction? “I don’t know yet… I think unless there is really a good reason to change it, it is better to just let it be.”

Featured image credit: “Litecoin IMG_3372” by “BTC Keychain” is licensed under CC BY 2.0