This post is part of our CryptoCanary spotlight series where we take a closer look at interesting projects in the crypto space. If you have your own opinion about Litecoin (LTC) – LOVE it or HATE it – you should definitely share it with the rest of the world here: https://cryptocanary.app/review/Litecoin.
What’s happening in Litecoin land?
For Litecoin enthusiasts and investors, there has been an abundance of news and drama in 2019. From the August halving to dusting attack to Miami Dolphins partnership to the recent news of Litecoin Foundation troubles, there has been plenty to digest and consider. In this article, we’re going to mainly focus on the Foundation funds drying up and seeming lack of development happening for the core protocol.
First concern – development
Worries about Litecoin being a dead project reached a feverish pitch when a Litecoin foundation chat was leaked on Reddit. In the chat, you can see the top leaders, including Charlie Lee, lament that developers are not interested in working on the Litecoin protocol. They also mentioned that new technical updates such as Confidential Transactions were not moving along as fast as initially promised. With the Litecoin GitHub repository showing very few commits/updates in 2019, many Litecoin investors became worried that they are invested in an essentially dead project.
Second concern – low funds
The Block Crypto also released a report in mid-August detailing the Litecoin Foundation’s funding issues and questioning how long of a runway they have left. Specifically, they noted that the LF has only received ~$575k worth of donations since mid-2017 with the vast majority of that coming from Charlie Lee. With the bear market + inability to generate revenue, the LF only had ~$96k left after Q1 of 2019 with no recourse in sight. This funding squeeze caused several foundation members to take a pay cut in Q1. Many investors are concerned because the LF is an integral component of driving adoption and progress for the Litecoin project. So having a way to fund their operations is important to ensure that the project continues to improve.
Charlie Lee responds
After these articles and reports dropped on social media, Charlie Lee quickly came out to address both concerns on Twitter.
First, in terms of development, Charlie stated that during all of Litecoin’s existence, only a handful of developers (him and 5 others) have ever worked on Litecoin’s protocol. Furthermore, he explained why their GitHub page shows little activity even though they have been developing. Without going into too much technical detail, here are the 2 main reasons he shared:
- They have been merging Bitcoin code to the Litecoin repo (remember, Litecoin is a fork of Bitcoin). This action doesn’t generate new commit dates on GitHub though.
- The main developer primarily codes on his personal codebase and then merges it with the main Litecoin repository at a later date. This will cause a flood of commits to happen all at once.
Charlie mentioned that this has always been the operating procedure for Litecoin and that people also called Litecoin dead in the past for having seemingly no development.
Now not everything was simply a misunderstanding though. Charlie admits that he dropped the ball with implementing privacy tech that was promised many months ago. He stated that he’s been focusing more on adoption lately and hasn’t had as much time to focus on development but will now shift his focus back to development. This definitely seems true because Litecoin was able to land an impressive partnership with the Miami Dolphins, an American Football team based in Florida, to become their official cryptocurrency.
Second, in terms of funding, Charlie said that the Foundation has always been a lean operation, and while their reserves did take a hit, they are now generating more revenue and signing partnerships. He also pointed out that the LF only existed as of 2017 whereas Litecoin has been around much longer. So therefore, he argues that the project will be fine even if the LF disappeared one day.
What’s next for Litecoin?
Looking ahead, there are some interesting developments for Litecoin. On the development-side, it seems like Charlie was a man of his word. On Aug. 20, 2019, Charlie announced that Grin coin developer David Burkett has now joined Charlie and another developer in the efforts to integrate MimbleWimble privacy technology into the Litecoin protocol. This news is super welcoming to those who have been waiting patiently for new technical upgrades on Litecoin.
On the adoption side, Litecoin Foundation announced on June 2019 that they have partnered with Bibox Exchange and Ternio to offer a debit card through which users can spend their LTC. U.S.-based customers can register for the card and soon start to use their coins in merchants/shops around the world once the card is ready and shipped out to everyone.
Should we be concerned?
After hearing all this news, you may be asking: is Litecoin still silver to Bitcoin’s gold? Or is it just a glorified testnet that will fade into oblivion? Personally, I think Litecoin will be fine. With a warmer crypto market and renewed development focus from Charlie Lee, it looks like promising days are ahead.
Furthermore, on the mining side, Litecoin still continues to dominate mining for its Scrypt algorithm and while total network hashrate has fallen, it is still at a healthy level.
What do you think?
These are just my personal thoughts and analysis about Litecoin’s recent events. However, I would love to hear your thoughts as well. If you feel strongly about this project at all, please help out other investors in the crypto world by leaving your experience here: https://cryptocanary.app/review/Litecoin.