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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.

Litecoin News

Litecoin Celebrates Eighth Birthday With Total Transactions Reaching $500 Billion Mark

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Litecoin Celebrates Eighth Birthday With Total Transactions Reaching $500 Billion Mark

According to a post from the Litecoin Foundation, it was in October 2011 when the first block was mined on the Litecoin network with the message:

“@NY Times 05/Oct/2011 Steve Jobs, Apple’s Visionary, Dies at 56”

Subsequently, another couple of blocks were mined for genesis block validation and ensuring the proper functioning of the network. After the confirmation, Charlie Lee, the creator of Litecoin, asked users through the Bitcointalk forum as to when it should be launched for ensuring input from the community.

The time decided was at 03:00 GMT on Thursday, October 13th. Even though there wasn’t much interest from users initially, with time more and more people went on to adopt the cryptocurrency and it saw growth alongside Bitcoin itself making headlines – partly due to the use of the coin in the darknet markets such as Silk Road.

According to CryptoCompare data, Litecoin now maintains a $3.59 billion market cap and has become a top traded cryptocurrency in terms of the trading volume. According to Charlie Lee, $500 billion worth of transactions has been made using the Litecoin network until now.

But Litecoin is not without its detractors. Those who consider it a Bitcoin copy have heavily criticized it citing that it would only distract users from Bitcoin.

There are others who consider Litecoin a testnet for BTC. It acted in that capacity during the implementation of Segregated Witness, as it was adopted by the Litecoin network before Bitcoin, and it still has higher usage on the network. As per the figures from last month, the use of SegWit on LTC has grown over 75%. The ATH for SegWit usage on the BTC network has just reached close to 60%.

Litecoin has seen some of the wildest price fluctuations in the past as well. During the last few years, there have been severe fluctuations with LTC hitting a new ATH of almost $400 in December 2017. It started at only $4 that year.

After that, in December the following year, the price crashed to $22, and it has seen recovery ever since. At the moment, the Litecoin trading price is $57.

According to recent reports, the Litecoin Foundation is currently facing depleted reserves, but Lee has said himself that there’s enough to last for a couple of years.

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Litecoin Foundation to Hold Undisclosed Treasury Sum with Crypto Lender

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Litecoin Foundation to Hold Undisclosed Treasury Sum with Crypto Lender

The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.

The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky stated.

As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.

Mashinsky said the endorsement by the Foundation validates the platform, which claims to give back up to 80 percent of its revenue to depositors.

“Litecoin being the first foundation to work with us and endorse us is a real milestone. It’s a huge event,” Mashinsky said. “That’s the first time I can say that the general community is recognizing Celsius for the utility it provides.”

Raising $50 million in a 2018 initial coin offering, Celsius has completed over $2 billion in loans in 2019, held $350 million annually in customer deposits, and issued over $3.5 million in interest.

Crypto custodian BitGo stated they held some $1 billion in Celsius-based crypto deposits this past year, almost double the amount locked away in decentralized finance protocols according to DeFi Pulse.

The primary non-profit tasked to maintain the cryptocurrencies codebase, the Foundation has been actively seeking partnerships this past year. Notable additions have included the Miami Dolphins, and now, the Celsius Network.

The Foundation’s financials came under scrutiny last quarter following disclosures concerning employee pay during Q1. Litecoin creator and Foundation managing director Charlie Lee stated at the time he would continue to fund the Foundation until financially stable.

Lee stated the interest-bearing deposits were the onus for signing up with Celsius, particularly for LTC holders.

“We’ve chosen Celsius as the LF’s preferred interest bearing wallet as we are always interested in helping LTC holders take advantage of new use cases for their holdings. What better way to show our confidence in the product than by allocating a portion of the LF’s treasury.”

Lee stated the Foundation has no plans for taking out loans on collateral, a product Celsius offers.

“At this time, we have no immediate lending or borrowing plans,” Lee said at the time. “As our relationship with Celsius evolves we are certainly open to exploring new opportunities.”

 

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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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