Sorry, Charlie – Litecoin USD (Cryptocurrency:LTC-USD)


On June 20th of this year, I published an article about Litecoin (LTC-USD) entitled Litecoin: A deafening silence. Unfortunately, I misinterpreted some data from the Litecoin code repository. Today, I found out about my mistake while watching a video featuring Charlie Lee, Litecoin’s creator. Let’s set the record straight.

The original article’s claim

In my article I said:

As many have noted already, Charlie Lee sold all his Litecoin. This could be seen as a move to make Litecoin more like Bitcoin without a central figure in the lead. However, it could also be seen as part of a worrying trend, a movement away from effort in the project.

– Litecoin: A deafening silence

Source: Litecoin: A deafening silence

Now, it is true that Charlie Lee sold his Litecoins, which some find concerning. However, there is a good reason that the GitHub activity falls off a few months back.

What’s actually going on?

You see, Litecoin is an early fork of Bitcoin (BTC-USD), and the code has been intentionally kept very similar. This was a design decision, and it enables the Litecoin developers to quite literally copy and paste (technically clone upstream) code from Bitcoin core. When Bitcoin comes out with a new release, the Litecoin developers take the code and just integrate it into their project.

However, because it takes time to integrate and test all these changes, and because the Litecoin is no longer an exact copy of Bitcoin (they have 2.5-minute blocks instead of 10 minute blocks for example, a different mining algorithm, as well as 4x as many coins), there is a period of time between releases in the master branch.

When a new release candidate gets merged into master (nerd speak for updating code before a new version is released to the public), a bunch of changes from the past suddenly appear to “pop” into existence. This makes it look like someone changed history, but in fact, the difference is because the developers are working with the code somewhere else, and the changes just haven’t been reflected yet.

Moving forward

I’ve put Litecoin back up a few notches on my watch list, because this was one of my primary concerns about the coin. However, the lag time between releases in Bitcoin and Litecoin does pose a certain threat. For example, if someone did find a critical bug in Bitcoin, that bug would probably be an issue in Litecoin as well.

The Litecoin developers would need to swing into action quickly to deploy the fix, as waiting around six months would simply not be an option when it comes to security. In software, the term for this is hotfix, which means it just gets prioritized and released immediately (well, you still need to test it, but you get the idea, it goes out ASAP).

Recent news about Litecoin

Since my last article was written, the Litecoin foundation took a position in a bank. It is believed that this move will facilitate the use of Litecoin as an actual currency.

The price of Litecoin has been punished so far this year, but when the market recovers, I think Litecoin will also recover more quickly than other cryptos because it’s been around so long and has become quite well known.


Litecoin Close Price data by YCharts


I apologize for my incorrect statement about the activity levels of Litecoin. I was not trying to spread “FUD”. This was an honest mistake. In the future, I’ll be more watchful about different software workflows, as the Litecoin model (where you just copy in most of your code as you go) is an anomaly in the space.

I will be watching Litecoin more closely now, and the Litecoin project has moved up on my watch list.

This article was published first in Crypto Blue Chips.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I do mine Litecoin with my mining company, but most of the Litecoin we mine is sold within a short period of time afterwards.

Crypto Destroyer