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The creator of Litecoin Charlie Lee is certainly one of the most influential, charismatic and respected voices in the world of cryptocurrencies. It has been around for a long time, has seen many projects come to collapse and burn during the various cycles of the market, but through all this LTC has thrived and has retained its relevance as a digital silver that helps King Bitcoin to climb and improve.
Given these circumstances, to which we also add the fact that it was the most accurate crypto prophet of 2018, it was a real privilege to interview Charlie Lee. However, the talks did not really revolve around speculating on the price: instead, we talked about the new technologies that were introduced and we are about to be introduced into Litecoin, and we tried to imagine a future for the 7-year-old silver digital. From SegWit and the Lightning network to the prospect of adding confidential transactions and Schnorr signatures to increase fungibility, it was a really productive discussion that should reveal why Litecoin is still around after all these years: it's all a mix of conservatism and audacity to embrace new technologies that are tested before being implemented in Bitcoin.
Despite the disappointing price movement, 2018 was an incredible year for Litecoin in technological terms, as it led the mainstream adoption of the Lightning network and announced that it would take some courageous steps towards adoption and traditional fungibility. Therefore, in the context of the entire bear market (which Charlie Lee predicted precisely), it can be seen that technology is flourishing, is more capable than ever to provide an alternative for sound money and is adopted from a growing number of traders on a daily basis (which is also about people like Jon Moore).
Find out more by reading the full transcript of Charlie Lee's interview below!
VLAD COSTEA: Hello and welcome to a special edition of Crypto Insider interviews. I'm Vlad and today my guest is none other than Charlie Lee, the inventor of Litecoin.
CHARLIE LEE: Hey Vlad, it's nice to be here.
VLAD COSTEA: Hi Charlie. I would have never thought to say this by the end of the year, but I'm so happy that I can talk to you and there's so much to talk about, there's a lot to do with Litecoin, c & # 39 it's a lot to do with the encrypted space in general, and there are many improvements proposed to Bitcoin and Lightning and I guess we have a lot to cover.
CHARLIE LEE: Of course yes
VLAD COSTEA: But first of all, I was thinking that usually you can not talk about yourself and your past. I know you went to … Stanford?
CHARLIE LEE: M.I.T.
VLAD COSTEA: M.I.T. You went to M.I.T, did you graduate and then you were hired at Google?
CHARLIE LEEYes, I went out for Silicon Valley in 2000, practically at the height of the dot-com bubble. I worked for a couple of startups and then I ended up on Google.
VLAD COSTEA: How would you compare the hype and the environment? You've seen the dot-com bubble, now you're seeing what happens with the cryptocurrencies and the entire Blockchain industry. How are they similar and what are the main differences that you observe?
CHARLIE LEE: The similarities are obviously, there's a bubble in the accident, right? Just as with the Internet, it was highlighted, and then there was a crash, but there is a real value in the internet, just like Bitcoin, criptovalute, there is certainly a real value. So, with Bitcoin, I've actually seen it as 2, 3 bubbles and crashes, so it's sort of a nice standard fair, what we're seeing today, so I think I'm used to it.
VLAD COSTEA: All right. But what about the excitement surrounding these technologies? We have seen the early years and we have seen how many people have speculated, and how they attribute some kind of value, or some kind of utility to these inventions. But have you observed other differences?
CHARLIE LEE: Differences with the dot-com bubble?
VLAD COSTEA: Um …
CHARLIE LEE: It's not exactly the same, obviously. What exactly is your question?
VLAD COSTEA: I'm trying to get a comparative perspective between all the hype and the environment that surrounded the Internet in its early days and how everyone wanted to be on the web and have a website, and right now when everyone in 2017 wanted to do an ICO, to enter Blockchain, and although I think the first half of 2018, the atmosphere was still positive that the Blockchain would revolutionize the whole world and changed everything, and I know that IBM is experiencing a private Blockchain. Maybe you'd have a different idea. In 2000 I was 8 years old, so I can not remember it in any way.
CHARLIE LEE: Yes, unfortunately not really, because I actually came here practically at the start of the crash, so I was not very interested during the bubble, so I did not pay much attention to the bubble, because I was still at school, so I did not I was investing in stocks, or buying these stocks, watching it go up and then watch it crash, so …
VLAD COSTEA: So, how was it to find a job on Google? At the moment, it's a big deal, but in the past it was not anything special, it was just an ambitious project, trying to create the best search engine out there.
CHARLIE LEE: Yes, I did not get into Google so soon, as if I were in Google in 2007. So, in those days it was already a public company, it was already big. At that time, he acquired YouTube, I was working on YouTube mobile for the first 2 years on Google. And it was a really interesting experience, working for a very successful company. Basically, whatever is launched by Google, you immediately get millions of users. So, you can work on interesting things, for a company that you know is not going anywhere, this is a great success, so it was definitely a very positive experience.
VLAD COSTEA: Would you find any similarity between the work environment you had in Google and what you found at Coinbase when you became an engineer?
CHARLIE LEE: It's very different, Coinbase, when I joined, I was in the second year, it's like two founders; Olaf and Craig, another engineer and me. So, it was very early, then, there is no guarantee that Coinbase would become something or it would become great, or even if Bitcoin would do well. Therefore, on Google, there is no risk of losing a job … there is no risk if the company fails. But at the base of coins, it's a right startup, so it's definitely very different, I liked it, it was definitely a very exciting time. Nowadays, the base of coins has become big enough, I think 500 employees or more. So, it's coming to a point where it's a very different company compared to when I joined.
VLAD COSTEA: And you actually left Coinbase at its peak when it was starting to get a big deal and everyone wanted to be listed on Xoinbase and was considered the Holy Grail of cryptocurrencies, because it's so easy to acquire cryptocurrencies on Coinbase.
CHARLIE LEE: Yes, I mean, it's still considered pretty good today, it's the right place to get into the crypt. And I think that Coinbase did a great job in introducing new people to cryptocurrencies.
VLAD COSTEA: All right. So how did you get into Bitcoin?
CHARLIE LEE: I discovered Bitcoin in 2011, I read an article on Silk Road and I was really interested in the currency that the market was using, a decentralized and resistant currency, and that caught my attention.
VLAD COSTEA: This appeal to any precedent … perhaps the economic views you've had? Or would you describe yourself as someone who sympathizes with cypherpunks or has libertarian ideas?
CHARLIE LEE: I never understood the ideas of Cypher punks, I recently learned a lot more. I think what captured me was my experience with gold and I was always interested in gold and how it was a better form of money than the Fiat currency, and just watching the government print the currencies of Fiat and devalue everyone's money was just frustrating. When I saw Bitcoin, I saw a way that not even the government had control over monetary policy, and I think it is very powerful. And I think, also because I understood the cryptography behind it, and since I was a software engineer, I could look at the code and see how it works and see how it really works and why it works, so I got it right later because of my software engineering background and my interest in code and sound money, I really get into Bitcoin.
VLAD COSTEA: But it did not take long before you had bifurcated the Bitcoin Genesis Block and created Litecoin. I know that Litecoin's seventh anniversary is celebrated this year.
CHARLIE LEE: Yes, they were about 6 months in, but it was not that long, but in reality at that time, it seemed a long time. Like when I heard about Bitcoin, I basically went all in and read everything about Bitcoin. The interesting thing then is that you can spend all the time reading on Bitcoin, the Bitcoin forum, then there was no Reddit or Twitter. So pretty much all the Bitcoin information, all the Bitcoin stuff was in one place, and you can pretty much read everything going on around the Bitcoin space, you can follow almost everything. There are Ponzi schemes, there is mining, there are other things that happen then. I basically ran into everything, right … mining, all these different things going on, and of course I created my Altcoin, so it was great.
VLAD COSTEASo, for the people you were looking for at the time, how to post all the time on the forums, Bitcoin Talk and maybe express some revolutionary ideas that have influenced you?
CHARLIE LEE: There are certainly many anonymous users. So, Gavin was driving the Bitcoin project … I met, and I would say it was the first Bitcoin conference in New York, in 2011. I think we were about 50 people who showed up, and it was like almost all the Bitcoin community showed up at the conference, so it was great. He was working on multi-sig transactions, and somehow I helped a little bit about this. It was nice to be so early in this space.
VLAD COSTEA: So when you imagined Litecoin, has it always been the support currency for Bitcoin? What maybe helps it in development? Or did you really think about competing in the first few years?
CHARLIE LEE: No, I always thought Bitcoin would be like the main currency, like the king, so when I created Litecoin, it was more fun, it took me by surprise too. Initially, someone wanted an aid for coding, to create a coin code called "fair breaks" which is a fork of tenants that breaks down to make it fairer. So, I helped with the coding part, I offered to help, because I understood the code and I felt comfortable. And then, that project failed, and then I decided that, I just wanted to do something better than all the other coins out there, make a coin that is really right, that is simple, follow the kind of Bitcoin path, but only have more abundant and faster coins, and just go with the silvertip, gold, type of idea coins. And I went ahead and I did it. I did not think about it too much, I did not think it would become something huge.
VLAD COSTEA: But if you take a look at the coin market, and choose the historical view, and I will do it now, you will realize that at the time there were 10 coins and Litecoin was the second, and what it happened the first day was launched on the clay market.
CHARLIE LEE: Yes…
VLAD COSTEA: … 2013.
CHARLIE LEE: Yes, but before then, when actually Litecoin was announced, there were also many enemies, they were like, why do we need another coin?
VLAD COSTEA: How different is it from today's Bitcoin Maximalist?
CHARLIE LEE: It's quite similar, but in reality most people did not think that Litecoin would succeed, as there were actually many other coins there, like X-coin, i-coin, kind of bricks that they were doing relatively well and people did not see the need for another coin. But I think that thanks to the way I launched Litecoin and trying to make it as fair as possible, all these other coins had pre-mines and other things that were very kind and profitable for the creators, the creators did a little bit of money. shadow stuff, so I think the honesty of Litecoin really helped us get to the top.
VLAD COSTEA: I'm watching the first instant shot of Coin Market Cap since April 2013, Litecoin was the second largest coin at the time, it was valued at $ 4.33. At this moment, we do not hear about Peer's currency, the name currency, the currency of the Earth, the currency of the Dev and the Nova currency, and for me, this is impressive, you've stood the test of time, even though I do not think that you were 100% involved until last year in Litecoin. So, what do you think is the reason for this resistance and success?
CHARLIE LEE: I think, one thing, that's right, so people do not like to support unjust coins. The other is, I think Bitcoin's silver for gold, kind of marketing term is really a kind of self-fulfilling prophecy, it's easy to understand, it helps people get in, gives it their reasons why Litecoin is valuable, and I think only In fact, that Litecoin has been around, the network has been very stable, has not had any downtime, has not been attacked, is protected by its mining machine ASIC, so the miners .. It is the absence of any consensus now, there is no reason for the miners to attack Litecoin and kill the currency that is making them money, just like Bitcoin, it is well protected by the right incentives. And today, it is on all major exchanges, so it has a very high liquidity, you can easily get it. So, many things work for Litecoin, and for me, in 2013, I joined Coinbase, so I worked mainly on Bitcoin for about 4 years, and last year or 2 years ago, I decided I would like to start concentrating my time on Litecoin, so I left the coinbase last year, I dedicated myself to spending all my time on Litecoin now.
VLAD COSTEA: Is fantastic. So when was this idea born that Litecoin is digital silver, just like Bitcoin does digital gold come out? Where does it come from?
CHARLIE LEE: I thought about the day when I was thinking about Litecoin, so I saw that the company uses gold and silver as money, and I saw a potential need for a silver for Bitcoin gold, because I saw Bitcoin as the Digital gold. So, the idea that Litecoin is silver is that it would have cheaper taxes, so if you're sending a lot of money, you'd use Bitcoin because you can afford to pay taxes, be a percentage of the amount you're sending is relatively small if you're sending a large amount. If you're buying coffee, Bitcoin's on-chain transaction could be quite expensive compared to the amount you're paying. So, I see the need for an alternative currency that can work together with Bitcoin, to meet everyone's transaction needs.
VLAD COSTEAIn the previous answer you said that people usually do not like coins that are unjust and have a pre-mine, if you look right now, you have Ethereum which has a huge pre-mine and is one of the most successful projects out there, you have XRP that has over 70% of the supply that is held by the creators. And you also have money in Bitcoin in both its versions, which actually forked into a given block, and people received their coins for free if they had already held Bitcoin, so they can not claim to have the same amount of evidence as I work behind a project, they just hired from there.
CHARLIE LEE: Yes, so I think some of these coins provide value, so people see the value in Etherium. I'm not so sure about XRP, but I want to say that people see the value of a currency that works closely with banks, that's why they buy or use XRP. As many know, I do not really like Bitcoin Cash, I think it's not very safe, because it has 5% of the Bitcoin hash rate, so any little Bitcoin could attack it, or people could get enough hash rate per attack. That's why a threat from Craig Wright is so effective to scare everyone with Bitcoin Cash, because it's possible, even though Craig Wright never planned to run the attack, he never had the resources to execute the attack just because, saying, Each of us is scared, so he made the ABC Bitcoin developers add checkpoints and add things that really damage the decentralization of the currency, just because they're afraid of this kind of attack. So, things like that really damage the sound properties of Bitcoin money, which is why I do not think it will work well in the future.
VLAD COSTEA: If we had this interview a few days ago, we could actually talk about the fact that the Flappening are in place, but this morning we had a big pump in Bitcoin Cash, it went over 50% more …
CHARLIE LEE: It is quite incredible, Bitcoin Cash has increased more than 100% in value over the last 2 days, which is quite impressive. Yes, I predicted that the Flappening would happen this year, and the reason why I expected it is that I think the long-term value of Bitcoin Cash is lower than the long-term value of Litecoin, because it does not it's a good price, so what I'm looking for is … I think Bitcoin and Litecoin, the idea is to become sound money, and a new form of money that we've never seen before, where it's resistant to censorship, nobody controls it and has value, because it has good properties of money, so it is a good property of money. And that's a bit of what I'm working on for Litecoin too. And for Bitcoin Cash, in my opinion it is absolutely not comparable.
VLAD COSTEA: Yes, I guess I agree with this statement … When you made the prediction, it was not obvious at all, because the Bitcoin cash had all the marketing, some developers, people like Jihan, I'm not sure if financial but also the political support of Gavin Andresen. And it sounded like a big problem right now, they were talking about Bitcoin overtaking all the time, and when you made the prediction, it was audacious, but the people who were reading about the Flapenning event last week were like, " oh it was so obvious, the prediction that actually made sense and was just a matter of time until it happened ".
CHARLIE LEE: Things made sense in hindsight. Just as my tweet on the Litecoin price could potentially drop to $ 20, do not invest unless you can withstand this volatility, I mean in hindsight, it was like "oh, wow, it's obvious", as you should not invest last year if you can not extend this. But the moment I did that tweet, people thought I was crazy. I think I remember, some of the answers were like … but now it's different in 2017, we have features, we have all these people who are interested, all these people know about Bitcoin and they are Litecoin, it's different, it's not going to drop 39; 80%, 90% more, but crypto does what I imagine crypto, that is … I think it would always decrease, but you just have to be careful, because this market is very volatile.
VLAD COSTEA: Ok, I have 2 questions right now, one is related to something you've insinuated, and I'm not sure if it was on purpose, where you referred to John McAfee's tweet, who last year told those who believed that Bitcoin would have fallen in price are not actually aware, and have no idea about the economy of the Blockchain that are different from everything else, which turned out to be such a negative thing to say in the long run.
CHARLIE LEE: And I think there are a lot of people who are very bullish on Bitcoin, I mean, I'm very bullish on Bitcoin too, I think Bitcoin and Litecoin's future is … I'm very optimistic about that. But in terms of the short term, nobody knows. To say that the price of bitcoin would reach a million dollars, this is a really bold statement, I mean it has given a period of a few years, which is rather bullish. Will it eventually reach one million dollars? Who knows? I think if US dollars will end up in inflation or even hyperinflation, it will obviously reach one million dollars, but it's like it's been a long time, if it ever happens. So, my point is that many people were really excited, confident about Bitcoin, but nobody really knows what the price would be like last year when it hit like $ 20,000 or so, no one expected it, unless you are not just pulling the numbers out of the air. A lot of people who are smart in this space have thought, how to hit $ 5,000 is already amazing, it was 5 times the previous high. So, it goes from 500 to 200, the lowest … Going from 200 to 5,000 is 25 times greater. And that's incredible, so when it hit $ 20,000, it was like, wow! How high it can really go, as if people thought it would go to $ 200,000, but then, of course, on closer inspection, it was a bubble and now we crashed.
VLAD COSTEA: But many people right now claim that you're the best positional trader in the business because you predicted $ 20, which was very accurate. How did you get $ 20 on all the values, why was not $ 100?
CHARLIE LEE: I just put it out there. In my tweet, I said that the price of Litecoin previously dropped 90% from its maximum, so that's how the market is volatile. At the time of the tweet, Litecoin has just touched $ 200, so I said if you can not stand it, it drops back to $ 20, which is 90%, so I do not understand, because later on I also got it, as we enter … as people who can not stand this volatility are those who are buying at $ 200, and selling at $ 20, they are the ones who are losing money.
In the long run, we see highs and lows, if you buy high and sell low, you're losing money, but if you can withstand volatility, if you buy because you think the future will be good, but in the short term, anything can happen, and you simply block it, when it falls, hold it back and know that the fundamentals have not changed, so there's no reason for this decline, it will come back, it's just a matter of time. So if you have this mentality, then you can make money at the end. But of course, there's a risk, there's the risk that Bitcoin and Litecoin can go to zero, it's a very experimental thing, so do not invest money that you can not afford to lose, and you can potentially 10 times the your money or you can go to zero. So, you're definitely very careful, this is the kind of mentality I had and I was trying to pass it on.
VLAD COSTEA: Now it makes a lot of sense, but at the time, you wrote the tweet when Litecoin cost $ 200, and it went up to $ 350 before it fell, and it swung at some point so that we could still see some hope in January and February , but after it has just crashed, and so on …
CHARLIE LEE: Yes, it's basically that everything has followed Bitcoin more or less, the Alts have definitely crashed much more than Bitcoin, but the model is very similar, Bitcoin crashed like $ 6,000 and then came back to think $ 11,000 or $ 12,000. And now, it's $ 3,000 and today it's $ 4,000. It's just very volatile.
VLAD COSTEA: And I know that in 2019, there is a halving of the mining premiums for Litecoin, and usually in this business where there are mining activities and premiums, years that contain a reduction in premiums usually means that the price will rise to the top. meeting the sustainability of the mining sector. So, do you think that Litecoin will have an excellent 2019?
CHARLIE LEE: It is difficult to predict the price, as the last block of Litecoin that did not affect the price. I really do not think that halving has any effect on the price, I think it should already be taken for granted, people already know the program of creating Litecoin and Bitcoin, Litecoin follows Bitcoin, every 4 years … So it should be d & # 39; agree with the prices, I think it could lead to a self-fulfilling prophecy and that people think it will help the price, then buy, and if everyone does, how will the price rise? So, it could happen, there's a small potential where miners might not sell when half-lives, so if miners believe in the currency and are extracting coins, they are potentially at a loss, after halving, they will continue to be mine and do not sell and that will remove some sales pressure in the market, which helps the price, so it could help a little bit the price. In addition to this, I do not think it has a huge effect on the price.
VLAD COSTEA: All right. So, every day, when you get out of bed, what is the appearance of Litecoin that makes you feel more excited and makes you say "I want to work on this, I want to make it happen"?
CHARLIE LEE: Return to the sonic properties of money, is trying to create something that is a good price, something that is decentralized, decentralization is a means to an end, the end would be resistance to censorship. You have money that nobody can stop, that many people do not really think too much, because they are used to this current system that we have. This is also the reason why I like the places of the drug market to use Bitcoin and Litecoin because they are the censorship and the money, it's your money, you should be able to do whatever you want without anyone telling you, you can not. And this is part of the idea I'm looking at, creating something that people can use. How to control your money, and this is what excites me about Bitcoin and Litecoin.
VLAD COSTEA: On January 3, there was this initiative to move your funds away from exchanges and only in your personal portfolios. Do you think it's a good idea to do everything on the same day?
CHARLIE LEE: I agree for this, I think it's nice … You're talking about the reserve test, I think we call it the Satoshi race, basically a kind of bank run for everyone to collect their coins from the exchange, to try that bag actually has your currency. And even for people to get used to the idea, they can check their money and make their own money. In a sense, I like to keep the exchanges so that they do not relax too much and start to be relaxed with security and lose people's money. I also like the idea that people are educated or educated about how to protect their coins and how fundamentally their own bank is. Because if you do not, money is under someone else's control and it's not really your money, so you lose that benefit.
What I do not like about this initiative is that it could potentially cause people to make a mistake and lose money. So, many people who keep money in return are those who are not very technical and do not know how to protect their coins, right? So, they probably have a lot of malware on their Windows machine, so if they actually transfer coinbase coins to their personal computer that already has a lot of malware, potentially someone could steal those coins, which would make them suck for those people trying to do something good and you end up losing all their coins.
VLAD COSTEA: Yes, but you are not interested in scalability and the idea that the blocks are filled very quickly? And will you have big commissions again, one with SegWit?
CHARLIE LEE: Yes, but if it's just a one-day thing, I think it would be fine. I think a lot of people will do it, you will not see any material effect, I think it's more than education, just doing something like that so people will actually say what it is, and they'll look inside, and find out how to put their coins better than keeping them in return. And I think that, for education, it's good … I keep coins in trading, everyone does it if they trade right, so people who trade will not transfer their coins out of the exchange, because they want to keep their collections on. So honestly, I do not think there will be a lot of coins moving out of trades, even if the campaign will not succeed.
VLAD COSTEA: Do you believe that Coinbase will never allow users to be custodians of their keys?
CHARLIE LEE: They had, I do not know if they still have multi-stake portfolios, we were using the caretaker's keys. I think the target audience for Coinbase is just for everyone, I just want to make it easier for people to buy, sell and use cryptocurrencies, and owning their key is not so easy, so the coin base does it all, try to make it easy for people, so this is not their goal, to have people with their own keys, so I'm not sure if they'll go, but they've invested in a decentralized exchange, so they're exploring, we'll see where it goes.
VLAD COSTEA: I mean, the problem is not only with Coinbase, you also have Binance, which in 2017 was the place where you buy all the shit coins and you try to make big gains, and I think that other great player does not have keys to custody? Penso che Robin Hood abbia lo stesso problema, ma non è disponibile in Europa, in Europa abbiamo eToro, che è simile a Robin Hood. E inoltre, penso che Abra non abbia un futuro per possedere le tue chiavi.
CHARLIE LEE: No?
VLAD COSTEA: No, per quanto ne so.
CHARLIE LEE: Penso che sia sempre un compromesso tra sicurezza e usabilità, qualcosa che è veramente sicuro e non è altrettanto facile da usare, e qualcosa che è facile da usare è difficile da proteggere, penso che sia qualcosa a cui dobbiamo costantemente combattere, questo compensare e cercare di migliorare sia l'usabilità che la sicurezza.
VLAD COSTEA: C'è stato recentemente un problema che alcune persone hanno sottolineato, che Coinbase possiede circa il 25% di tutta la fornitura di Litecoin. Lo sapevi? Penso che le notizie siano uscite oggi o ieri.
CHARLIE LEE: Quando lavoravo a Coinbase, possedevano il 5% di tutti i Bitcoin, l'8% di Ethereum, quindi il 25% è molto, in termini di percentuale, ma in termini di quantità di denaro, penso che sia un decimo di quanto Bitcoin posseggono. Quindi, il 25% equivale a 400 milioni di dollari di Litecoin, un sacco di soldi.
Ma possiedono un valore di Bitcoin pari a 4 miliardi di dollari. Coinbase è un grande giocatore, è per questo che ho convinto Coinbase a supportare Litecoin, perché so che molte persone utilizzerebbero Coinbase per acquistare Litecoin, perché è una delle prime società negli Stati Uniti a rilasciare e supportare Litecoin. E si è rivelato vero, così molte persone hanno comprato il loro Litecoin da Coinbase.
Non sono preoccupato per il decentramento, perché inizialmente quando uscì questa notizia, prima che scoprissimo che si trattava di coinbase, abbiamo visto qualcuno spostare il 25% di tutto Litecoin, in 3 giorni, la preoccupazione delle persone, è un modo ampio … o potrebbero potenzialmente impazzire e vendere queste monete e causare il crollo dei prezzi.
But after finding out it was coinbase, it was actually good, coin base represents hundreds of thousands of users so it is actually decentralized, the problem is that they are keeping all their coins on coinbase, which I think Coinbase has great security, but still a single point of failure. If anything does happen, that’s a lot of coins for a hacker to steal, and I think overtime, we just need to educate more people to be their own bank, and not leave their coins on exchanges, but I am not especially worried about this, today.
VLAD COSTEA: So, you trust so much in the security that Coinbase and other exchanges which do not allow users to be custodians, have of their keys?
CHARLIE LEE: I want to say, I worked at Coinbase, so I know… I helped build it, make sure it is secure and does well. So, I definitely trust Coinbase, I don’t know about exchanges, exchanges get hacked all the time, I definitely don’t recommend people leaving money on exchanges or even Coinbase.
If they have the ability to secure it themselves, I would recommend people secure it themselves. But the reality is Coinbase does a better job at securing coins than the average person.
So, it is kind of like, leaving money in the bank or leaving money under your mattress, leaving cash, people don’t leave cash under their mattress, and I don’t recommend people leaving cash under their mattress because someone will break into the house and steal all your money, whereas if someone breaks into a bank and steals the bank’s money, there is insurance, and you will get your money back, so there’s no worry. So, it is similar to this, if you are not technical enough, or if you don’t know enough to secure your coins yourself, it’s better to leave it on Coinbase than to keep it on your computer which has malwares and you don’t do backups properly, so there’s various ways that you can lose coins that way.
VLAD COSTEA: I don’t think people like Jimmy Song or Jameson Lopp or Giacomo Zucco would agree with that, I have spoken to them in different interviews, but this is a different and interesting perspective.
CHARLIE LEE: Yeah, I think ideally, people should have control of their own coins, you can’t expect everyone to be able to do that. I think it will improve over time, as more hardware manufacturers make hardware wallets, like the HTC phone, the HTC Exodus which we will have built in, secure crypto wallets so it is easy to use and still secure, it is important for that to happen, for people to just build out things and make it very easy for people to secure their own coins, before that would happen. We saw that Ledger for example sold like a million units, that’s pretty amazing, having a million hardware wallets out there that are being used by people, seems we are moving towards that direction where people are securing their own coins, so that’s good.
VLAD COSTEA: I think I am confused in terms of making the difference between Ledger and Trezor, I look at them and I see they have similar functionality and I think Ledger has slightly more coins which it supports. But, do you have any kind of recommendation in regards to which one is the better product?
CHARLIE LEE: They are very similar, they are different, depending on the quantity you have, I would say you can go either way, I have used both. I think, initially Trezor had a better UI and Ledger recently launched their Ledger life app which is really easy to use also, so depending on… I would say either one would be fine.
VLAD COSTEA: Okay, they are also priced the same, so at the end of the day it is just a matter of choosing. Well, let’s get back to Litecoin, and talk about the improvements. Do you think Litecoin would be on the Blockstream satellite to have its Blockchain synchronized for all eternity and space?
CHARLIE LEE: Sorry, so I think that Litecoin would be on the Blockchain satellite?
VLAD COSTEA: Yeah.
CHARLIE LEE: I actually talked to Blockstream a bit about that, they are kind of focused on Bitcoin which you can expect. I think eventually we will go that route, I think Blockchain’s satellite is pretty cool, it’s not that useful for most people, it’s a cool concept, it plays off of the censorship resistant part where, even if your internet is being censored, you can get and sync to the Bitcoin blockchain, I think that would be useful for the future. But, it’s not something I am concerned about, I am concerned more about adoption by people, more so than being censorship resistant from the government, I would say.
VLAD COSTEA: Okay, so what about the Liquid network? I know that they planned to add many more coins, and there is a Blockstream product which supposedly or maybe practically helps exchanges make cheaper transactions which are also confidential. And do you see Litecoin as being one of the next assets being added?
CHARLIE LEE: It doesn’t work that way, Liquid… you can create tokens or assets on top of Liquid network. So, Litecoin is separate from that, you can’t really add Litecoin to Liquid that way. Like liquidation of Bitcoin, so you can potentially create a Liquid Lite network that is exactly like Litecoin, but that’s not the same.
VLAD COSTEA: Okay. So, do you see that happening?
CHARLIE LEE: That Blockstream would work on Liquid for Litecoin? I doubt anytime soon.
VLAD COSTEA: But they support separate team of developers creating the token under Liquid side chain for Litecoin?
CHARLIE LEE: You could create a token on Liquid that is backed by Litecoin… anyone could do that. So, if you want to create a token on liquid, that is backed by Litecoin that you hold, then you do that and people can actually send Litecoin to you and you send them the token where you can do it in an atomic way, where you can sort of move Litecoin unto liquid, if that is usable. Anyone can do that, with permission from Blockstream.
VLAD COSTEA: Or from Litecoin…
CHARLIE LEE: Yeah. I got a message from an exchange, asking me, if it was okay to add Litecoin. They were asking if they want to make a deal, or something to that effect, so I think they wanted to see if we would pay them to use Litecoin on their exchange. So, I just replied, go ahead and list Litecoin, you don’t need permission from me.
VLAD COSTEA: That’s how it works. But I guess it gets confusing with the existence of the Litecoin Foundation, and it gives people the impression that they actually have somebody to speak to when they have any dealings with Litecoin.
CHARLIE LEE: Kind of, it is definitely an issue, because Litecoin is a decentralized currency. So the Litecoin Foundation could disappear tomorrow and Litecoin would still exist and work fine. Even if no development happens on Litecoin, it will still work, miners will still mine it, they will still make money from mining, it would still be secure. As long as there’s no new big bugs that are found, there won’t be any issue with Litecoin.
So, a lot of people are complaining about Litecoin not having a lot development, we piggyback off Bitcoin development a lot, we depend on Bitcoin developers and we do stuff, but we don’t really need that much development ourselves.
And similar for Litecoin Foundation, people complain about Litecoin Foundation not having a lot of money, and that’s kind of bad, like someone once complained that the Litecoin Foundation treasury is really low.
But we didn’t print money out of thin air, we didn’t give ourselves a lot of money so of course we don’t have money, unlike all these ICO coins which have hundreds of millions of dollars in their treasury, that they can spend on stuff, it’s not the same, Bitcoin doesn’t have Bitcoin Foundation that has a treasury of billions of dollars working on Bitcoin.
And the same for Litecoin, so Litecoin Foundation is made up of a bunch of people, mostly volunteers, because people who are excited about Litecoins, but the foundation don’t have the resources to pay, to have a huge team, and we are just working on Litecoin development, and just spread the adoption of Litecoin and that’s the goal of the Foundation. But companies don’t need to work with the Foundation to actually support Litecoin.
VLAD COSTEA: Now, I know that your brother is a board member of the Bitcoin Foundation. Do you guys get along? I know that he supported Bitcoin Cash at some point.
CHARLIE LEE: We get along, but we have different ideas about things, like he supported SegWit 2X, I was pretty against S2X. He thinks Bitcoin Cash is just like Bitcoin, I definitely don’t agree. So, we definitely disagree on many things, but it’s fine.
VLAD COSTEA: So, which one of you got into Bitcoin first?
CHARLIE LEE: I did. I introduced Bobby to Bitcoin, actually back in 2011, but he didn’t really get in in 2011, he kind of understood it, but he had concerns about it. Then, I think in 2013, he really got into Bitcoin with BTC China, BTCC.
VLAD COSTEA: That’s a big market I guess, or it used to be before the government got involved too much. Let’s get back to Litecoin and talk about the state of Lightning, and I even saw that there’s a question on Twitter about somebody asking if there is any way to check the amount of Lightning nodes being deployed for Litecoin?
CHARLIE LEE: There is the site 1ml.com, principle of Bitcoin and Litecoin, so you can check there. Lightning network is live for Litecoin, but not a lot of people are using it, it’s still fairly new. It’s still new technology, it’s still not easy to deploy Lightning nodes and play with Lightning, that would improve overtime, the Lightning developers are working hard on improving Lightning.
VLAD COSTEA: I heard during the last Magical Crypto Friends episode, that you had a Casa node, right next to your desk, I was curious if it has functionality for Litecoin?
CHARLIE LEE: Yeah, Casa mentioned in one of their tweets, that they are working on Litecoin support, but currently the Casa node only supports Bitcoin, but it wouldn’t be hard for them to support Litecoin, I think it’s more about the UI of it, and also about, would they support it together? Bitcoin, Litecoin together, potentially allow for atomic swaps and things like that, I think that’s the direction they are going towards. But nothing announced by them yet.
VLAD COSTEA: That would be really cool, and I guess I would order one and put it on my desk, knowing that I can actually exchange between two coins, without resorting to a practical, centralized exchanges, or decentralized ones. And also, you get to store and synchronize two Blockchains at the same time, which is impressive. I am not sure if the current storage, I think it is 1 terabyte, or 500 gigabytes, I am not sure if it can take on to long time, both Bitcoin and Litecoin, so I think they should be thinking of a way to scale with storage.
CHARLIE LEE: Yeah. And a lot of people don’t understand why block size is such an issue, why don’t we just increase the block size to 32 terabyte or 1 terabyte, it is because it is resource intensive, it is like if no one can run a node, then he decentralization is dead, then it becomes centralized to people who actually can run nodes, then if you can’t run a node, listen to those that can, about what is a valid transaction, what is not a valid transaction. And the fact that you can still run a full Bitcoin and a full Litecoin node on a Raspberry Pi device is awesome.
Anyone can build or buy this device for hundreds of dollars, you can buy it for three hundred, and it just works, it has the Bitcoin full node and as Lightning, and you can use LN transactions, or you can do on-chain transactions with a device like that, it’s pretty cool. And that’s why it flew off the shelves, it is not cheap, but it’s cool, you can build it for like a hundred dollars, but people are willing to pay three hundred, because it’s easy, and it’s all set up and it just works.
VLAD COSTEA: Yeah, but usually, we don’t think too much about the amounts of nodes that we have and that’s a big issue if we want decentralization which is as you said, a means to achieving censorship resistance. I guess I don’t run a node all the time just because I need the storage on my SSD drive, and I have been told that if I run an SSD, it’s a bad idea to have too many re-writes to it, because it would burn very quickly. And I have actually burnt an SSD back in June, I think, when I was trying to run a Lightning node…
CHARLIE LEE: Really?
VLAD COSTEA: Yeah, but it was still under warranty. They gave me a new one.
CHARLIE LEE: Yeah, I think you don’t need to run your own node, for most people, they are fine trusting another node, but most use Coinbase, put their coins at Coinbase… of course those people don’t need to run their own node, but the idea that what’s powerful is that you can, if you want to.
So, it’s like, with the current financial system, you can’t get away from banks, you have to use them, you just can’t do that. But with Bitcoin and Litecoin, you can be your own bank, or you can run your own node.
So, running your own node means that you can’t be tricked by anyone about what is or is not a valid transaction. If someone said they sent you a thousand dollars… if someone sends you 10 Litecoins, if you run your own node, you can know for sure that you actually got those satellite coins, if you don’t… you have to trust like a block explorer or another node, to tell you.
Of course, it’s far-fetched where those explorers and nodes collude against you, they tell you that you have coins, but you didn’t… It has happened before, like Blockchain info. at one point it has shown an invalid transaction as valid, it was just a mistake into a code, and it might be like a double spend, they showed the one that had actually didn’t confirm as the confirmed transaction, you thought that you had a confirmed transaction, then afterwards, it got taken away because it’s not actually confirmed.
So, that has happened, also the promise that they will make decisions for you in terms of hard forks and things, if your coin is on coinbase, after the Bitcoin cash out, you only had Bch, you don’t have BSP coins, it eventually would give you BSP coins, but they may decide not to, and it is not only in your control.
VLAD COSTEA: But do you think you can still run a Bitcoin Cash now if they have 64 megabytes blocks?
CHARLIE LEE: It would be very hard; it would be much harder. You can still do it, but just like Ethereum it is really hard for anyone to run Ethereum node, it will be the same for Bitcoin Cash, it’s trade-offs, if you want Bitcoin Cash, supporters want to put a whole social network on the Blockchain, they want to put all the tweets or whatever on the Blockchain, they want everything on the Blockchain, that’s fine, but it is not going to be decentralized. It’s like, I am not working towards a better PayPal, I want something that is really different.
VLAD COSTEA: Yeah, that’s also what Tim May said in his last interview before passing, now he is very critical of cryptocurrencies becoming too centralized, in terms of being held by exchangers which only allow you to withdraw certain amounts a day. And also you have certain regions where you are not allowed to run a node and you have to compromise, or you are not allowed to mine, or you just have cryptocurrencies which are very centralized in their nature and their very core when they were created.
CHARLIE LEE: Yeah. I am not that interested in those cryptocurrencies, but there is room for everyone, some people don’t care about decentralization, that’s why coins like Ripple are so popular, people think that working with the banks and just being kind of like the PayPal 2.0 is useful, that’s fine. I don’t care about coin like Ripple, when it is centralized, a company owns a huge amount of it, and they are using it to kind of… It’s just different, it’s not the same, it is from a different angle, but there’s room for everyone, I think.
VLAD COSTEA: And that’s why I had my mind blown when I read, I think it was a post by Luke Dash, the Bitcoin Core developer, and he said that we actually need smaller blocks in Bitcoin, and in a time when you find people who still complain that SegWit2X was a good idea, that having 2 megabyte blocks would have been better, you have somebody who is a Bitcoin Core developer, and he says, you know, I think 600 kilobytes would be enough. And his considerations are mainly because it would be quicker to synchronize the Blockchain.
CHARLIE LEE: Yeah, I don’t totally agree with him, but I see where he is coming from, he wants people to be able to quickly sync the Blockchain for things to work well, and then move the scaling to second layer solutions. So, there is a trade-off, I think if Lightning really becomes used, it could work, I think it would be hard to convince everyone that we should decrease the block size today, but he keeps pushing for that, I am not sure why he does, he is an interesting person. We have different people who have different opinions, and that’s fine.
VLAD COSTEA: That’s why this space is so interesting, we have all these people coming up with different propositions. Right now, Bitcoin Satoshi’s vision, or BCH SV, or whatever you want to call it, pretends to be the government and enterprise friendly version of Bitcoin.
CHARLIE LEE: Yeah, I mean BSV is… Craig Wright, I just don’t understand, he is talking about patents… I think one of his last tweets was like, in a few years, a billion people would be using my technology, I am like…
VLAD COSTEA: Yeah, I don’t know all that because he blocked me.
CHARLIE LEE: He blocked like everyone, I think his Twitter feed is private, but there is like a bot that follows him, that retweets what he tweets, it’s kind of a joke. Just today, I saw someone reply and say, I thought this was like a comedy account, they didn’t realize it was actually his feed, his reality is just so ridiculous, it just seems like a parody account.
VLAD COSTEA: There is no way of knowing on Twitter, you have all these cartoonish accounts which actually speak more truth than people who reveal their own identities.
CHARLIE LEE: That’s definitely true.
VLAD COSTEA: But a lot of people get attracted to Tiffany Hayden, and they believe that she is brilliant, and when she said that XRP will flip Bitcoin at some point or be valued at some crazy amount, like a thousand dollars, and there are not even enough money in the world to have that value for XRP.
CHARLIE LEE: The value for XRP today is already quite ridiculous. I didn’t expect this…
VLAD COSTEA: But it was even more ridiculous when it got to 3 dollars.
CHARLIE LEE: That’s true.
VLAD COSTEA: I actually lost a lot of money shorting XRP, last December, I saw it went up to 50 cents and I said to myself “there is no way it can go up, because it was 20 cents all year long, and this was already too much”, and I shorted it, and I lost money.
CHARLIE LEE: Trading in cryptocurrency is definitely not for the average person, pretty risky to short on anything. Even if you don’t think a coin has value, it can do crazy stuff.
VLAD COSTEA: Right. Let’s get back to Litecoin, and talk about Confidential Transactions which you mentioned on magical crypto a few episodes ago, and do you want it to be an opt-in feature, just like Zcash, and it would happen through a soft fork.
CHARLIE LEE: Yeah. So, I mentioned previously, fungibility and privacy, they go hand-in-hand, they are one of the only properties of some money that we don’t have with Bitcoin and Litecoin. The example is like, if you are spending coins to buy coffee, if you send coins that you just recently purchased off an exchange, let’s say you purchase 100 Litecoins off exchange, you send it to buy coffee, the person knows or could see that you actually have 100 Litecoins, I think financial privacy is important.
Even if you are not doing anything illegal, it is important to have financial privacy, and with Litecoin today, you have to really think about which coins to spend… I don’t know how you use Litecoin and Bitcoins, but the way I use it is like, I have all my input and I know which one, where coins came from. And you kind of don’t want to mix the inputs and outputs, you just have to make sure that you preserve some privacy. And that’s kind of really annoying, it’s not a good user experience if you have to deal with that. So, having something like confidential transaction will get us closer to good privacy and good fungibility, and that is something that I am currently thinking about exploring for Litecoin.
VLAD COSTEA: I see a lot of people who are confused about what does it mean, and they think that this would slow down the adoption, just because they think it’s absolute privacy, like in Monero. But a confidential transaction actually means that a third party cannot see the amount which you send and the amount that you have in your wallet, right?
CHARLIE LEE: Yeah. So, basically the amount could be hidden, with confidential transaction. The network still enforces that the amount being sent equals the amount received, so no coin is created from a transaction, even though you can’t tell how much is in the input or output, you still know the cryptographically that some of the input equal some of the output, so nothing is created.
But the idea is, let’s say you bought 100 Litecoins from an exchange, you tried it in a confidential transaction, so no one can see that it is actually 100, so when I send that 100 to buy coffee, obviously, the recipient would know that they got the coins, but they can’t see what the change is, and what the sent amount is. So, I could be sending you a thousand and be getting a change of 999 or I could be sending you two and getting a change of 1, and you just don’t know, and that is the privacy that you get from using confidential transactions.
VLAD COSTEA: Yeah, because right now, the issue is that, it’s unnatural, when you go to the supermarket and you give the cashier a $20 bill, she doesn’t know how much money you have in your wallet, I think that’s what Riccardo’s Spagni said in Magical Crypto, that’s where I got example from. That shouldn’t happen in cryptocurrencies, nobody should know how much money you have in your wallet, unless you purposely disclose, or you give out your public key so people can check on a block explorer.
CHARLIE LEE: Yeah, and there’s two things about privacy. One is the amount, the other is the routing. With Monero, the use of ring transaction, ring signatures with transactions. So, you sign like 6 different inputs, so you don’t know which one the money actually comes from, so that hides the route of how the money is flowing, transaction behind the amount. So, for Litecoin, I think Lightning Network is going to be pretty good for hiding the route, would be good for privacy to a certain degree, so I think adding confidential transaction will help with Litecoin privacy and fungibility.
VLAD COSTEA: And that would be very good news if you ask me. But I know it is a very controversial and divisive issue, because some people are used to Litecoin being similar to Bitcoin, and unless Bitcoin also implements the feature, it is going to be weird for a lot of people.
CHARLIE LEE: Yes, we’ll see, it’s definitely controversial. There’s also a concern about regulatory concern. How would exchanges feel towards Litecoin with confidential transactions? I think with the recent addition of Z-Cash to Coinbase and also Gemini, it shows that it can work well with exchanges, because it is opt-in and exchanges can ask for the view key, so they can see what’s going on, it’s just that the amount is hidden, if you use opt-in confidential transaction. So, I think everybody should be fine, I think it is good, I do think we need to improve fungibility for Bitcoin and Litecoin, and this is a good start.
VLAD COSTEA: I guess a lot of people don’t know how to use confidential transactions in Zcash, they think that the transactions are private by default. But actually they have to obfuscate the transaction by paying extra. So, I guess there is a number of transactions which are being made back and forth, so there is no way to track back. Did I describe it well?
CHARLIE LEE: It’s very different, Zcash uses zero knowledge proofs to do the transactions, so you actually hide everything, the transaction amount and also the route. So, with Litecoin, with confidential transaction, it’s quite a bit different technology, I think Zcash technology is definitely better for privacy, it is also unproven, it also uses a lot more resources… I don’t know what the current numbers is with their latest release, that’s why it’s also more expensive and also take more time, like computer resources, to actually create these zn-snarks transactions and to actually process them. So, it’s definitely an interesting development on the network.
VLAD COSTEA: I know that the Zcash confidential transactions are expensive, Litecoin provides a cheaper alternative.
CHARLIE LEE: It will be cheaper, but still confidential transaction with even bullet proofs today is still about 3 times increase in size of the transaction, in terms of the size of the transaction. So, you would expect about 3 times increase in fees you pay, because your fees are based off of the transaction size. So, you can imagine it been 3 times more expensive than a regular transaction. But, Litecoin doesn’t have a space constraint, do they? Today it has 4 times the block size of Bitcoin, I am not concerned about the transaction, the space usage of complex transaction.
VLAD COSTEA: I wanted to ask you this before, but I think I forgot. You are the first to accept SegWit, and prove to the world that it actually works through Litecoin, and how is Segway adoption going down with Litecoin? I know that Bitcoin has some issues with stubborn exchangers and people who just don’t want to adopt SegWit is it better with Litecoin?
CHARLIE LEE: First, Litecoin wasn’t the first coin to activate SegWit, I believe there were other coins that activated SegWit before Litecoin, but it was the first major coin that activated it, that had a lot of value. In terms of SegWit adoption I honestly don’t track SegWit, because it is not that important to me, if people need to use SegWit, they will use it, if you need to use Lightning, you will need SegWit, you will need transaction malleability, so you have to use SegWit.
For exchangers, if you don’t care about paying more fees, so SegWit transactions would be cheaper, if you don’t care about paying more fees and most don’t, they don’t even support SegWit transactions, they can store in their regular transactions, pay a little bit more fees. Litecoin is not constrained, doesn’t have block size issues right now, so I am not concerned about people not using SegWit, I think it is designed to incentivize people to use Segway if they want to pay less fees. So, the incentives would work, there is no reason for me to be concerned about how much of the network is using SegWit today.
VLAD COSTEA: I think I have read that there was this consensus between Litecoin miners to reduce the fees by 10 times, did that actually happen?
CHARLIE LEE: So, it is not really by Litecoin miners, it is kind of just the recommended fees for the network, so it is like the minimum fee. So, this is something that the developers and I have come together to talk about, and we decided to reduce the fees by 10 times.
So, this will happen within the next release… and as everyone update to 0.17, they will be paying less fees.
Fees is not an issue today, it is still very low with Litecoin, I think it is the trade-offs, if you make the fees too low, then you will get a lot of spam, it becomes really cheap for someone to spend the Blockchain, creating transactions that aren’t really moving any value, really useful, creating random transactions that just shuffle money around, and then build the Blockchain, so it makes that attack cheap, and that’s not good. So, it’s kind of a trade-off with how cheap we want it to be.
VLAD COSTEA: So, how do you feel about Schnorr signatures?
CHARLIE LEE: I think it is good, it is definitely coming to Bitcoin, and by that it will also come to Litecoin. I think Bitcoin developers are working on very cool stuff, like with signatures and scribblers scripts, lots of amazing stuff coming out in Bitcoin. And all that is thanks to SegWit, now that we have SegWit, all these can be added as soft forks, we will follow all the drama, hopefully we’ll follow all the drama, like strict improvements on Bitcoin scaling… in security, and adding smart contract stuff to Bitcoin and Litecoin.
VLAD COSTEA: Do you think that in the long term, Bitcoin and Litecoin will actually provide all the functionalities of Ethereum?
CHARLIE LEE: It’s hard to say, I don’t think Bitcoin or Litecoin will ever be Turing complete, so you can’t do everything. It’s a different focus, so I think with Bitcoin and Litecoin, the focus is just to be a form of money, the important thing is value transfer, transfer of value, and that’s the key, programmable transfer of value. So, that’s why adding more of codes and scripts and it gets easy to do programming, to do smarter contracts which Bitcoin or Litecoin is important, but you don’t have to do like everything.
Whereas, you don’t have to be the world whole computer, I think having a world computer on the Blockchain is crazy, because it doesn’t scale, having everyone, all the nodes running, every single computation doesn’t make any sense. I have said it many times, if Google and Amazon created a smart contract that is centralized, that works like a thousand times more efficient than Ethereum, and people will use it, crypto kitties doesn’t need decentralization of Ethereum, most apps do.
VLAD COSTEA: Yeah, there are just cool proofs of concepts, they can just show how it works, they are just interfaces to help people get acquainted to the new technologies, just like, I think in Windows, they had a game Solitaire which was maybe the best way to learn how to use the mouse.
CHARLIE LEE: Yeah. Minesweeper…
VLAD COSTEA: Yeah. It took like 15 years to finish my first game of Minesweeper… I also want to ask you about the Litecoin community, or how they call themselves the Litecoin Fam. What I noticed, and I even wrote an article about it, is that unlike a lot of communities, they don’t just tweet, they don’t just spend their time at their desk, and type about what they think their vision is of Litecoin, they just go out there and they talk to actual sellers and retailers, and they convince people to accept both Bitcoin and Litecoin, and I guess that’s the advantage that being on the side of Bitcoin allows you to also introduce Litecoin as a cheaper alternative.
But I appreciate this grassroots approach and the energy you have, John Kim and John Moore, who are very active all the time, it is very hard to keep up with them.
CHARLIE LEE: Yeah, I think it’s amazing. I definitely am very thankful of everyone who is basically volunteering their time to help push for adoption. I think it’s key for Litecoin. Basically, Litecoin is currently a very speculative currency, that’s why a lot of people keep their coin on exchanges than coinbase, because they are being traded back and forth, and that’s good for liquidity, but we need to move towards more utility, more people are actually spending the coin, having more merchants accepted, having more places to spend your coins, I think that’s what will take us to the next level, so to speak. I am definitely pushing for adoption wherever I can, and I am very excited to see others are also.
VLAD COSTEA: Yeah, I guess your philosophy is different from that of people who think it is just a store of value and a way for people to keep their wealth in a way that cannot be taken away by their government.
CHARLIE LEE: It is definitely that too. I see both… if it is just a store of value, gold is a great store of value, but it is hard to actually use it, that’s why our government mint it like gold coins, because it makes it easy to use. But just being only a store of value will only get you half-way there, you still have to be able to use it, to be able to spend it.
And that’s why I am actually excited about lightning network, I think that’s the other part of it, that will make it easy to spend, for merchants to accept Bitcoin and Litecoin, and for people to spend it. And also, it helps Bitcoin scale, you can actually use it without building the Blockchain, so you can do micro transactions, you can send tiny amounts of Bitcoin or Litecoin, and it would only settle on chain, so it doesn’t have to take up a transaction block space.
VLAD COSTEA: Right. And also, I think the approach which you understood very well in 2017 was that it doesn’t matter, it is not just about the speculative aspect, I think that a lot of projects which were launched had extra features and they had maybe fundamentally good ideas, but their approach was not to have as many users as possible, but to be listed on as many exchanges and allow the people who invested to increase their investments and it was all about speculations when they could just showcase the technology in a more practical way.
CHARLIE LEE: Yeah, it is unfortunate, that’s why the exchanges were able to charge listing fees. Because all these ICOs and coins, they wanted to be listed so people can trade it, and actually pump the price up, that’s what they cared about. And unfortunately, like with so many coins out there, it’s hard to rise up above everyone and for people to notice you. So, that’s why all these white papers, all these marketing stuff, claiming this is the next big thing, all these scams and stuff, it is just kind of unfortunate, but it is what it is…
VLAD COSTEA: I think the part which makes them scams is not technological necessarily, it is just the part which has pre-mines and the marketing and the way they approach the market from day one, the way they launched. Maybe the ideas can be used, to be implemented in Bitcoin for soft forks at some point, if they are that good.
CHARLIE LEE: Yeah, unfortunately, that won’t make them any money, that’s why they launch it as an ICO, make a lot of money and then market it.
VLAD COSTEA: So, I don’t think I have any more questions for now. I am happy that we spoke and this was incredible.
CHARLIE LEE: Yeah, thanks for doing what you do. I think it helps a lot too.
VLAD COSTEA: I hope so, otherwise it is just work in vain, but at least I get paid for it, so it’s fine. But I would rather do this than review ICO white papers and talk about air drops, and look at anything that is below the top 10 on Coin Market Cap, I think Monero sometimes is below top 10 which is unfortunate, but…
CHARLIE LEE: It is right now.
VLAD COSTEA: To be honest, I have never approached XRP just because I know that their community can be so easy to enrage, that even if you say Ripple instead of XRP, they block you and call you names, it’s insane, to go into that territory.
CHARLIE LEE: Yeah. Okay, it’s great chatting with you.
VLAD COSTEA: Yeah, same.
CHARLIE LEE: Talk later.
VLAD COSTEA: Sure. Bye…
CHARLIE LEE: Bye.
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