Litecoin has the sixth-largest market cap of any cryptocurrency. But is it already successful?
Creator Charlie Lee says yes, especially considering that when he started it, he didn’t expect it to go anywhere and he even neglected to work on it for a few years. But he also admits that it hasn’t reached its goal yet: “The general idea is just to have more and more places that you can spend Bitcoin and Litecoin. For it to be truly successful you have to be able to spend it anywhere,” he says, pointing to payment success stories like Visa and Mastercard, on my podcast, Unchained.
Lee got into Bitcoin in the early days, purchasing his first Bitcoins at $30 — only to watch the price drop to $2. But when asked why that didn’t shake his faith in the cryptocurrency, he said, “because from my point of view, the fundamentals didn’t change.”
He then started mining with four GPU cards sticking out of a computer and got involved in trying to launch a fairer version of another cryptocurrency, but that effort failed. Then he came up with the idea having a sibling to Bitcoin, which is how he came to create Litecoin. “One of the things I saw It being was silver to Bitcoin’s gold. I’d seen throughout history people using more than one currency, in the case of gold and silver. I saw Litecoin being a cheaper version of Bitcoin where fees would be less and people could potentially use it for more things.”
Saying Litecoin is already successful, he says his attempt to give it a “fair” launch — one that didn’t allocate a substantial amount of coins to him and/or his family and friends from the start — is part of the reason for its success. However, he does admit that the price volatility is a hurdle to it being used for payments, which is his goal. Despite that, he doesn’t believe stablecoins, cryptocurrencies whose value is pegged to more widely used assets such as the U.S. dollar, are the answer either because many of them have central points of failure and are not as censorship-resistant as more decentralized cryptocurrencies such as Bitcoin and Litecoin.
Lee and I also discussed the fact that he sold all his litecoins near what turned out to be the all-time high for the cryptocurrency. When asked how he felt about the perception that he was cashing out at the top and leaving others holding the bag, he said that he didn’t have enough to crash the market, let alone one one exchange. (He says he sold them all on Coinbase Pro, where it didn’t crash the price, and informed the community after the fact.)
His rebuttal to people who say that Litecoin is worthless now because he doesn’t have any “skin in the game,” meaning he is not financially incentivized to make it a success, is “If you’re not holding onto Litecoin because I don’t have any, then your reason for holding and using Litecoin is just silly to begin with.”
Listen to the full episode to hear more of his rebuttals to other critiques of Litecoin, why he’s experimenting with enabling private Litecoin transactions and how Litecoin is governed.