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.
Coinbase holds 25% of all litecoin and 5% of all bitcoin.
— ₿ TruthRaider (@TruthRaiderHQ) December 2, 2019
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.
If you listen to the fanboy john Kim, who parades around like a cheerleader from high school, you'd miss the fact that litecoin is centralized af.
25%-30% + of this shitcoin is owned by one company.
— ₿ TruthRaider (@TruthRaiderHQ) December 2, 2019
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.
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.
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.
‘I Think XRP Is a Scam’ Says Ben Askren Former UFC Star And Bitcoin Advocate
As regulatory concerns over XRP — the world’s third-biggest crypto asset — have intensified, some celebrities are stepping in to voice more FUD about the coin. Ben Askren, former UFC fighter and known Bitcoin (BTC) bull, has driven more scepticism toward XRP with a short tweet on Jan. 28: “I think XRP is a scam.”
Askren’s latest cryptocurrency verdict builds on a background of previous endorsements of other cryptocurrencies. The famous former Olympic wrestler is not only bullish on Bitcoin, but also supports Charlie Lee-founded Litecoin (LTC), the seventh biggest cryptocurrency by market cap as of press time. In January 2019, Askren was purportedly sponsored by the Litecoin Foundation as the mixed martial arts fighter for UFC 235 event. Subsequently, the UFC fighter appeared on his Instagram wearing a Litecoin-branded t-shirt. The celebrity has also promoted Bitcoin on his Twitter in October 2019:
“Just bought more BTC using @eToro was really easy, now all of you twitter geniuses can tell me Crypto is a scam while my assets go up!”
As Askren has been known as a shill for BTC and LTC for a while, a user on Twitter asked him a question: “The fact @Benaskren is staying quiet on XRP tells me its going to take it a long time if ever to moon.” Askren’s verdict didn’t take long, and a part of the crypto community on Twitter expressed some negative stance toward XRP, while the tweet has amassed over 2,000 likes as of press time.
Askren’s statement about XRP comes amid an already worsened situation around the coin as XRP dropped over 40% from $0.364 in 2019 to $0.183 in December, marking a two-year low. The situation has been exacerbated by rising concerns over the unclear regulatory status of XRP’s issuing company, Ripple, which faces a class-action lawsuit alleging that it held an unregistered sale of securities. Despite all this, CEO Brad Garlinghouse has recently hinted at an initial public offering for Ripple, which undoubtedly has some implications for the fate of altcoin. At press time, XRP is trading at $0.238, up over 1% over the past 24 hours, following a major green trend on crypto markets.
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.
There is a fake Litecoin Foundation youtube channel scamming people out of their #LTC as we speak.
DO NOT believe the channel and what it is offering! This is NOT the official Foundation youtube channel.
— David Schwartz (aka – Dasch) (@DaddyCool1991) December 23, 2019
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.
🚨🚨🚨NEW SCAM ALERT🚨🚨🚨
These tweets will lead you to a webpage or youtube, trick you to send them XRP, and convince you on getting back double or more XRP in return!!!#XRPCommunity! NEVER NEVER SEND YOUR XRP TO THESE SCAMMERS! THIS IS NOTHING BUT A SCAM! pic.twitter.com/S3bsXhcBmE
— 🐼PandaRippleXRP🐼 (@RipplePandaXRP) December 17, 2019
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.