One the most influential inventors of a cryptocurrency doesn’t believe that his invention, or Bitcoin for that matter, are necessarily here to stay.
Litecoin was designed by Charlie Lee to be the so-called “silver” to Bitcoin’s “gold” in the popular analogy that compares the digital currency to the precious metal. On Wikipedia, it states that Litecoin was invented, in part, to “process a block every 2.5 minutes, rather than Bitcoin’s 10 minutes, which its developers claim allows for faster transaction confirmations.”
Litecoin has gained in popularity over its history – it was launched on github on October 7, 2011 – with a steady increase in transaction volume over time. Moreover, it is traded on many different exchanges, including Bitfinex, BTC-e, OKCoin, BitBay, Kraken, Yacuna and Huobi, BTC China and OK Coin trade the digital currency.
Charlie Lee, who now focuses on working at Coinbase as Director of Engineering, shared his thoughts with CCN on how Bitcoin, as well as Litecoin, could fail. For the 38-year-old programmer, two scenarios come to mind:
“For one, the Litecoin price crashes,” Lee elucidates. “People get burnt and stop supporting Litecoin. Trade volume goes down. Prices crashes even more. Exchanges drop support for Litecoin.”
The second scenario involves an alt-coin superior to Litecoin, which then “manages to displace” Litecoin as the second biggest alt-coin after Bitcoin, which then leads to scenario one. He believes Bitcoin could fail, as well.
“Bitcoin could fail if there’s a bug in the code that totally destroys trust in it,” Lee said. “For example, if anyone can spend anyone else’s bitcoin. Perhaps, quantum computing comes out and breaks all of cryptography. This will kill the internet and all of finance as we know it also. And we are not able to find a quantum-proof encryption and hashing algorithm to move Bitcoin to.”
Although he’s never met Nakamoto, Lee does have some questions for the Bitcoin founder(s): “I really want to know what Satoshi thinks of Litecoin. Did he know that there will be alt-coins when he made his code open-source? Does he hate Litecoin because it dilutes the limited supply of crypto-currency?
“I would love to know!” Lee exclaims.
Litecoin has traded sideways for quite some time, but many analysts have pointed out in recent months how the coin seems to have traded very steadily as Bitcoin has suffered from what industry insiders have termed a “constitutional crisis.”
The debate – over whether Bitcoin should increase its block size or not – has confused and divided the Bitcoin industry. It’s even alienated some. The issue is that Bitcoin has grown so fast, the core protocol might not sustain the amount of transactions conducted on the network much longer. Therefore, core developers have suggested updating the protocol.
Litecoin, some have pointed out, could alleviate some of Bitcoin’s issues, as the currency appears to be more conducive to high transaction volumes.