Litecoin (LTC) Creator: No One Can Ever Own Bitcoin, Its ‘Sound Money Property’ Gives It Value
Charlie Lee, the creator of Litecoin, recently had the opportunity to speak at the World Crypto Conference. During this event, he discussed how the value of Bitcoin, Litecoin, and other cryptocurrencies are given.
The discussion started with addressing how the majority of people have rarely spoken on this topic. He spoke about the way that various items have been used to trade throughout history, based on utility alone, before the public agreed to something with a better monetary asset like paper money and gold. Gold is given its value based on rarity and physical ownership, and that paper money is easy to exchange.
However, Bitcoin lacks the ability to be owned, since it cannot be tangibly held. The only way that someone can even possess its value is with a private key. Lee commented that it does not vary between cryptocurrencies, adding,
“It’s actually the ‘sound money property’ that gives Bitcoin its value and that’s why Bitcoin is called digital gold.”
According to Lee, there are four properties that provide Bitcoin with value. He addressed how centralization of paper money gives the government ownership, while there is no way to control the limits of Bitcoin with decentralization. Furthermore, every Bitcoin transaction is immutable, which is the second property.
The third property is proof-of-work and competitive mining protocol. Lee added, “hence the value of Bitcoin is not zero, as it costs money to mine. And if it did not cost money, you could make more and counterfeit it.”
Lee mentioned the downfall that fiat currency has been experiencing lately, bringing him to the fourth property. He said that the Federal Reserve has been using the term “quantitative easing,” but they are basically just “printing money.” With Bitcoin this is not a concern, because there is a maximum number of Bitcoin to ever be created. Concluding the fourth property, he added, “It cannot be changed without consensus so, everyone has to agree to change it.”