Litecoin’s Founder “Compliments” Stellar (XLM)
Charlie Lee, Litecoin’s creator, has lately been in the media for his controversial occasional statement on Twitter. Today has been no different as Lee has raised the wrath of the Stellar community with a backhanded compliment. The feedback on Twitter was mixed, but in general terms the community did not seem to support Lee's assertion that Stellar Lumens does not deserve its market capitalization.
But what did he say? Lee's controversial Tweet has already collected more than 500 comments:
Congrats to Stellar on passing Litecoin's marketcap. That said, it really doesn't make sense to compare marketcaps of coins that are "printed", b/c they have an inflated marketcap. Maybe I'm old school, but I only care about decentralized mineable coins.https://t.co/n6va1YWoiD pic.twitter.com/4IMJ7iqg3H
— Charlie Lee [LTC⚡] (@SatoshiLite) July 20, 2018
In sum, he “congratulated” Stellar, but using a sarcastic tone since, for him, Stellar Lumens does not use the proof of work or proof of purchase consensus algorithm. According to Lee, this makes it worth less and have a lower market capitalization.
In response to a series of comments left to the Tweet, Lee suggested that only cryptocurrencies that are distributed through a mining reward of some kind are truly decentralized.
This is the same consensus algorithm used by the famous virtual currency Bitcoin (BTC). In the original BTC white paper, Nakamoto argues that the use of a block reward to distribute the currency will help ensure wider distribution, as opposed to a centralized model such as a central bank.
And as such, the Stellar Lumens (XLM) are certainly not mined and were issued as such by the Stellar Foundation.
In order to distribute the tokens, Stellar made what is essentially an aerial launch and gave away a large part of the Lumens available for free. Currently, Lumens are being distributed through a process that the group calls inflation and which again releases them at no monetary or computational cost.
Lee saw a rather violent reaction to his comment and suggested that Stellar Lumens and other unmined cryptocurrencies like Ripple (XRP) do not deserve their market capitalization.
Over the past 18 months, LTC has appeared to be a very strong asset with a clear track record and usage case. Therefore, since BTC rates were too high, Litecoin was the cryptocurrency of choice for spending money. Now, Litecoin has seen a number of new and agile competitors enter the scene such as Bitcoin Cash (BCH), Dash (DASH), Ethereum Classic (ETC), and many other popular options that offer even lower transaction fees than LTC.
What's worse is that LTC's mining has become highly centralized because the Chinese company Bitmain is the only serious supplier of Scrypt compatible miners. In addition, Bitmain operates its own industrial-scale mining operation of LTC.
The irony of the whole thing is that Charlie Lee himself has been accused of centralizing LTC. The accusation of the community appeared when Mr. Lee sold all his LTC coins when Litecoin was at its all time high (around $300 dollars).
The currency that was once Crypto Market's number three asset has recently been associated with TokenPay. The main intention behind this partnership was to buy a German bank and provide solution to crypto companies. The Litecoin Foundation had a handful of other innovative partnerships that could help keep Litecoin relevant and evolving.
Recently, LTC prices have been stable between $70 and $90 dollars. So, from a monetary perspective, LTC appears to be stable enough for now.
The Litecoin Foundation will have to continue working hard to ensure that this asset does not become irrelevant in the face of strong competition.