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Litecoin Foundation Funds are Drying Up Fast

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Litecoin Foundation Funds are Drying Up Fast
#CharlieLee, the creator of the digital currency, believes that there is no need to worry, as he believes the depleting reserves are still far from hitting a crisis point.

Litecoin Foundation Funds are Drying Up Fast

Is the #Litecoin Foundation undergoing a #financialcrisis? Well, that might very well be the case as the non-profit tasked with overseeing the fifth-largest #cryptocurrency in the world was reportedly left with only $96k in its reserves by the end of Q1 2019.

However, #CharlieLee, the creator of the digital currency, believes that there is no need to worry, as he believes the depleting reserves are still far from hitting a crisis point.

Charlie Lee Litecoin

Litecoin Funds Drying Up Across All Avenues

According to a new set of data, the Litecoin Foundation raised approximately $575K in donations since June 2017. Strikingly, a whopping 81% of that amount (~$868K) came from Lee alone. Roughly 8% came from mining companies.

The sales of merchandise only totaled $300 during the first quarter of 2019, which one could see as an ominous sign that the community is gradually losing interest in Litecoin. The data further showed that the average monthly donation during the first three months of 2019 was just $1,000.

With the inflow of funds drying up, the Litecoin Foundation has been by and large relying on its cryptocurrency reserves to sustain operational expenses. But, as it turns out, even the reserves are depleting fast, with only $96,400 reported to be left by the end of the quarter ending March 31, 2019.

Charlie Lee, however, remains convinced that the Litecoin Foundation is “doing fine” despite all financial setbacks. He took to Twitter earlier on Saturday to respond to ongoing speculations that the Foundation was left with the proverbial peanut to sustain itself.

Saying that the project is lean enough to manage on a tight budget, Lee also promised worried stakeholders that they were “starting to make money” once again.

Time to Shake Things Up for Litecoin’s Sake

Once widely acclaimed as ‘the Silver to Bitcoin’s Gold,’ Litecoin currently appears to be facing a range of issues not just financially, but in terms of core development.

In fact, there was (kind of) a panic-like situation late last week after reports emerged that the Litecoin Foundation is struggling to rope-in competent developers to take charge of protocol development.

Apparently, Lee himself acknowledged that “no one is interested in working on Litecoin protocol development work” during a private conversation with other Foundation members. The conversation took place over at the Telegram channel “LTChasnodev” and was later leaked online.

Lee eventually had to defuse the situation by assuring the community that work was in progress behind the scenes and he would “get the ball rolling” soon.

No doubt, Litecoin is still up there among the top-5 cryptocurrencies by market cap, but there is a growing sense among many stakeholders that the Litecoin Foundation should be more proactive in its efforts to resolve the issues hindering the ecosystem’s growth.

Do you agree that the time is ripe for a shakeup in the Litecoin Foundation? Perhaps you would prefer faster development and more transparency in the way things are being handled at the top? Let us know your thoughts in the comments below.

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Litecoin Sinks 2%, But Analysts are Still Bullish

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Litecoin Sinks 2%, But Analysts are Still Bullish

Ever since its highly anticipated halving event earlier this past summer, Litecoin has been facing a significant amount of downward pressure that has led it to retrace over 50% from its 2019 highs.

This lackluster price action has shown few signs of slowing down anytime soon, but one analyst is still noting that there are multiple reasons to be bullish on LTC presently.

Litecoin Drops Below $70 as Markets Turn Bearish

At the time of writing, Litecoin is trading down over 2% at its current price of $69.5, which marks a notable retrace from its weekly highs of $73.

In 2019, LTC peaked in late-June when the entire crypto market was nearing the peak of its parabolic run, which sent the crypto to highs of over $140. In the time since, however, Litecoin has retraced over 50% from these highs, signaling that its highly anticipated halving had little impact on its price.

Mati Greenspan, the senior market analyst at eToro, explained in a recent email that he is still bullish on LTC despite its recent lackluster price performance, explaining that he is drawn to the crypto due to its high level of usage and massive community, which he believes will help bolster its long-term price action.

“If we’re thinking long term and past this specific event, I’m staying in. What draws me here is the level of usage and the community around this coin. The number of transactions on the blockchain remains extremely consistent at around 25,000 per day. This has not been affected by the halving whatsoever,” Greenspan explained.

Furthermore, Greenspan also explained that the widespread and decentralized nature of nodes that are running Litecoin also bolsters its long-term bullish case.

“As well, the number of nodes is spread well across the globe. Right now there are more than 1,700 computers running LTC nodes, which is actually quite comparable to the ~10,000 bitcoin full nodes operating at the moment,” he added.

It is important to note that there has been growing controversy surrounding Litecoin in recent times regarding its development, but the claims that were widely perpetuated on Twitter were largely unfounded and have since been dispelled.

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Litecoin Crash After Halving Sets Bad Precedent for Bitcoin

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Litecoin Crash After Halving Sets Bad Precedent for Bitcoin
Litecoin Crash After Halving Sets Bad Precedent for Bitcoin

In August, Litecoin (LTC) saw its latest block reward reduction — dubbed a “halving” or a “halvening”. While countless analysts were expecting for the cryptocurrency to surge in the wake of the inflation reduction, it didn’t.

In fact, Litecoin plunged, falling from a three-digit price point to a two-digit price point. As of the time of writing this, the cryptocurrency, the fifth largest by market capitalization, is trading for $64, some 40% lower than the date of the halving. Against Bitcoin, LTC has also taken a plunge, falling by 40%.

Also, the security of the network has collapsed, falling from 480 terahashes per second to 310 terahashes per second as of the time of writing this.

The price collapse directly contradicted popular sentiment, which stated that a reduction in Litecoin’s inflation would lead to an increase in upward price momentum, simply due to simple supply-demand economics.

Bad Precedent For Bitcoin?

According to trader Anondran, the LTC price collapse after the halving “is the best leading indicator for what [Bitcoin will do after the halving] next year. Considering the outlook didn’t look good for LTC after the halving, I’d expect the same to happen for Bitcoin”.

What Anondran is implying that prior to the halving, Bitcoin will rally by hundreds of percent, presumably to establish an all-time high. Then, following the block reward reduction, BTC will sink, as will the security of the network.

From an outsider’s perspective, this makes sense. Many consumers equate Bitcoin and Litecoin to each other, considering their similar names, logos, and brand recognition, so it may make sense for them to assume their price action will be identical.

But a model from PlanB shows that this is not the case. A model from the Twitter analyst shows that Bitcoin’s and Litecoin’s movements are distinct.

PlanB’s model predicts that the stock-to-flow (SF) ratio, which is an asset’s “above-ground” supply to its yearly inflation rate, of certain commodities, namely gold, silver, and Bitcoin, can predict their market capitalization. Bitcoin, over its ten-year history, has followed the model for years now, having an R2 of over 95%. It predicts that after the next halving, BTC’s fair value will reach $55,000.

However, Litecoin’s relation to the SF model is a mere 25%, implying that halvings have no substantial, long-term effect on the price of LTC. Bitcoin, on the other hand, should appreciate in the long term due to the halvings.

 

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Litecoin’s Charlie Lee Reignites Instamine Controversy Eight Years After LTC’s Launch

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Litecoin’s Charlie Lee Reignites Instamine Controversy Eight Years After LTC's Launch
Litecoin founder Charlie Lee took to Twitter to provide a counterargument and explanation for LTC’s instamine, a cryptocurrency that was launched eight years ago. 

Litecoin’s Charlie Lee Reignites Instamine Controversy Eight Years After LTC’s Launch

Litecoin founder Charlie Lee took to Twitter to provide a counterargument and explanation for LTC’s instamine, a cryptocurrency that was launched eight years ago.

Instamine Woes

As litecoin approaches its next halving, during which time the block reward will be reduced by 50%, the near-decade old controversy surrounding the currency’s genesis has been resurfaced.

Detractors of LTC have been critical of Lee and his handling of the ‘instamine phase’ in the early days of the coin’s launch.

Instamining refers to a process in cryptocurrency where coins are initially distributed in an uneven or unfair manner. Typically, it involves the release of coins in a disproportionate amount to a handful of miners and investors. In the case of Litecoin, it has been determined that the currency underwent a similar phase in the days after launch.

According to Lee,

“[It’s] well known that Litecoin was fast mined in the first few days as the amount of people and hashrate was more than I thought there would be.”

Deleted Tweets

Despite the instamine occurring eight years ago, Lee renewed the controversy after publishing, then deleting a tweet that seemed to take aim at rival cryptocurrency Dash.

In the tweet that has been since been scrubbed, Lee attempted to explain the instamine phase, in addition to pointing out how Dash may have committed a more egregious offense.

“It’s hard to estimate how much a hashrate jumped on it initially. But it was still fair with Litecoin as everyone had a fair chance to mine. What was unfair with Dash was that it was launched to friends only for the first few days. And then total supply reduced after the fact.

 

charlie lee litecoin deleted tweetCharlie Lee’s deleted tweet

Some community members are speculating that Lee withdrew the tweet after drawing attention to litecoin’s own contentious mining behavior. As outlined in a Reddit post addressing the issue, Litecoin clearly underwent an accelerated mining phase that produced 500,000 LTC in 24 hours.

litecoin instamine charlie leeGraph showing instamine phase in the early days of Litecoin.

Charlie Lee Responds

Lee defended his actions in a separate Reddit post, saying,

“If I knew what the hashrate would be at launch, I could have set the initial difficulty higher. But it was better to err on the low side to protect against 51% attacks around launch time, and that’s what I did.”

The community backlash against Lee’s original tweet and subsequent deletion has been intense.

However, the majority of the sentiment appears to derive from Lee deflecting his situation towards Dash.

As the coin founder explained, litecoin’s launch in 2011 constituted the early days of crypto and he was still largely feeling out the process for getting his currency up and running. Few could have imagined at the time it would hold a market cap of over $5 billion by the end of the decade.

What are your thoughts on this? Let us know in the comments.

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