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Charlie Lee Stirs DASH Instamine Controversy; Attracts Scrutiny to Litecoin’s Own Misgivings

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Charlie Lee Stirs DASH Instamine Controversy
In a tweet posted July 23, Litecoin creator Charlie Lee slammed Dash for its rocky main-net launch which saw a significant chunk of the total coin supply instamined within 24 hours.

Charlie Lee Stirs DASH Instamine Controversy; Attracts Scrutiny to Litecoin’s Own Misgivings

In a tweet posted July 23, Litecoin creator Charlie Lee slammed Dash for its rocky main-net launch which saw a significant chunk of the total coin supply instamined within 24 hours.

The term ‘instamine’ is popularly used to describe periods of time when cryptocurrency blocks are mined faster than the usual rate, disproportionately benefiting a small group of miners.

Lee was later forced to delete his Tweet after facing backlash involving Litecoin’s own instamine controversy. In a subsequent comment on Reddit, he clarified that Litecoin’s instamine took place due to unexpectedly high mining activity on launch day, stating,

“At launch, thousands of people jumped in and fast mined a lot of coins, but that amount is less than 1% of the total supply today. And because it was launched fairly, everyone had an equal chance to mine those coins.”

Charlie Lee

Lee Criticizes Dash, Twitter Fires Back

In his post, Lee blamed the creator of Dash, Evan Duffield, for unfairly handling the cryptocurrency’s launch and incorrectly estimating the initial difficulty required. Shortly after sharing this sentiment, however, Lee was bombarded with responses that pointed out Litecoin’s own instamine fiasco.

One such response claimed that 500,000 LTC coins were mined on the first day of the cryptocurrency’s launch. The user blamed Lee for the bug in his code, which Dash later inherited during its own mainnet launch. Following this criticism, Lee deleted his tweet.

In his comment on Reddit, Lee said that he kept the initial difficulty low to protect the network against 51 percent attacks and that the instamine only took place because of the high hash rate. He asserted that most cryptocurrencies, including Bitcoin, were designed that way. Lee added that if Bitcoin had thousands of miners at launch instead of a handful, it would have experienced a similar phenomenon too.

Charlie Lee announced the Litecoin project in October of 2011 as a robust alternative to Bitcoin. He described Litecoin as the equivalent of ‘silver’ if Bitcoin (BTC) was considered the gold standard. In his forum post, Lee detailed Litecoin’s many strengths, including faster transactions, open-source friendliness, and community inclusion by having everyone vote on a co-ordinated launch time.

litecoin (LTC)

Problems Originating from Lee’s Code

In the first 24 hours of Dash’s launch, approximately 1.9 million DASH coins were issued. This represented between 10 to 15 percent of the total DASH supply. Duffield eventually acknowledged the instamine later on.

Duffield said that Dash’s launch could have benefited from a couple of months worth of scrutiny from a team of developers and testers. He added that if he had a chance to start over, he would have set the initial distribution to 10 percent, where anyone looking to sell would have to submit a 30-day notice.

The Dash and Litecoin instamine took place because of incorrect adjustment of difficulty rates, both projects failing to account for initial hash rates. Since virtually no one talked about it during Litecoin’s launch, Duffield likely did not notice the bug prior to Dash’s launch.

Do you believe that Lee and Duffield should have been more cautious considering that both cryptocurrencies now have valuations totaling billions of dollars? Let us know your thoughts in the comments below.

Litecoin News

Litecoin Foundation Warns Fake 100,000 LTC Giveaway Scam Spreading on YouTube

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Litecoin Foundation Warns Fake 100,000 LTC Giveaway Scam Spreading on YouTube

The project director of the Litecoin Foundation is warning the crypto-curious about an apparent scam on YouTube.

David Schwartz says a YouTube channel posing as the Foundation recently broadcast a video of the 2019 Litecoin Summit, pretending it was happening live.

The description of the video falsely states that the Litecoin Foundation is now giving away 100,000 LTC.

The video deploys a classic crypto scam, claiming that anyone who sends LTC to a certain address will receive a larger amount of LTC in return.

It’s the latest reminder that the vast majority of crypto giveaways are likely scams – especially those that ask people to send crypto to an address.

Similar schemes are trying to trick Ripple and XRP supporters, with many people in the community posting alerts via Twitter.

 

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Litecoin News

Coinbase Could Be Holding a Quarter of All Litecoin

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Coinbase Could Be Holding a Quarter of All Litecoin

The quest for decentralization in the cryptocurrency space is a noble but convoluted pursuit. So, when a suggestion arises that one of the world’s most prominent exchanges, Coinbase, is holding as much as 25% of all Litecoin, questions start to be asked.

Coinbase is regarded as one of the biggest, and most influential, cryptocurrency businesses in the world. It has made it to the Forbes Blockchain 50 list, and it has its infamous ‘Coinbase effect’ that sees coins pump when added to the exchange. But does this exchange pack enough power to influence a coin like Litecoin?

Can Coinbase Be That in Control?

It was suggested on Twitter by @TruthRaiderHQ that Coinbase holds 25% of all Litecoin and even a substantial 5% of Bitcoin.

This was followed up by a stab at John Kim, who brands himself as an ‘LTC evangelist.’ The suggestion being that if one company does hold as much as 25% of one coin that promotes itself as decentralized, then the level of its decentralization deserves to be questioned.

The scope of Coinbase’s prominence in the cryptocurrency space is tough to determine, as is its full record of coins held under custody. However, the similarities to the cryptocurrency exchange and a major bank are quite apparent.

Coinbase is a centralized exchange, a breed of exchanges that dominate the market, and are a necessary go-between for fiat and crypto. But also a type of exchange that operates, in many ways, like a traditional bank.

In that sense, it faces deposits and withdrawals of crypto and fiat, all the time, and often with huge sums. There needs to be high liquidity at Coinbase, and this means holding a lot of funds.

Does This Make Litecoin Centralized?

Coinbase has over $7 billion of BTC under custody, which equates to 966,230 Bitcoin. If this is the case, and the circulating supply is 18 million – or perhaps closer to 17 million because of lost coins – then it would appear that Coinbase does hold even more than 5% of Bitcoin.

If it is the case that 25% of all Litecoin is sitting under custody with Coinbase, that is a substantial chunk that is not as distributed as fans of the coin would like or even expect. Coinbase isn’t likely to do anything with that much sway in the Litecoin sector, but it does warrant questions of its distribution.

Coinbase Litecoin

However, what does become concerning is that following its mining reward halving earlier this year, the hash rate for Litecoin has been falling, which does make it more susceptible to a 51-percent-attack. Its hash rate is now the same as it was a year ago.

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Bitcoin News

Litecoin’s hashrate, difficulty close to early-2018 lows

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Litecoin’s hashrate, difficulty close to early-2018 lows

CoinMetrics recently released the 25th issue of its weekly State of the Network series, a report that analyzes network data to produce insights into the cryptocurrency space. The report stated that while XRP’s daily average transaction value surged past ETH last week, XRP and BCH’s transfer values dropped significantly this time around.

The report also observed that Litecoin‘s adjusted transfer value had shot up by over 89%. However, its low transfers and transaction count signified that a relatively small number of addresses had been moving large amounts of Litecoin.

BTC daily fees were reported to have increased by 10% for the second week in a row, as Bitcoin continued to climb ahead of ETH in that regard, with BTC averaging $346,900 compared to ETH’s $91,800. Additionally, XRP fees were reported to have grown by over 100% over the last week.

The report further found that both the Litecoin hash rate and difficulty have been in free-fall since July, and are now on the verge of reaching lows not seen since early-2018. Bitcoin’s difficulty was also reported to have been adjusted downward on 7 November, since the reported drop in hash rate last week.

Among large-capitalization assets, Stellar was reported to have recorded the largest gains over the past week, gaining 19% after the Stellar Development Foundation effectively burned 55 million tokens by sending them to an account that cannot sign transactions. Among smaller capitalization assets, Cosmos showed a 24% increase without the appearance of any specific catalyst, while Tezos gained by 41% after Coinbase announced that it would be offering staking rewards on the platform.

CoinMetrics also reported that short-term measures of correlation earlier this year between Bitcoin and gold returns had reached one of the highest levels in history.

Additionally, CoinMetrics claimed that gold’s recent large sell-off and negative 30-day correlation with Bitcoin suggests that the digital asset’s reaction function to macroeconomic and geopolitical developments is complex and inconsistent.

The CM Bletchley Mid-Cap and Small-Cap indices were also reported to have outperformed the larger cap indices, largely due to the performance of Tezos, which made up 10% of the index. Also, since Bitcoin is a major component of both the Bletchley 10 and Bletchley Total indices, their performance relies heavily on returns of Bitcoin over the period, which was reported to be one of the weaker performing large-cap assets of the week.

At the time of writing, Bitcoin was trading at $8,822 on the cryptocurrency charts, having recorded an insignificant growth of 0.34% over the past 24 hours.

Source: Coinstats

 

 

 

 

 

 

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