Unchained - Charlie Lee on How Litecoin Can Be Truly Successful - Ep.116

Episode Date: April 23, 2019

Charlie Lee, the creator of Litecoin and aka SatoshiLite, discusses how he came to launch Litecoin, how the "fair" launch may have helped its success, why he didn't work on it for a stretch, and what inspired him to devote all of his time to it — but not own any litecoins. We also discuss his vision for Litecoin, why he believes stablecoins aren't superior, why he's considering enabling private Litecoin payments, and how he feels about the perception that he sold his litecoins near the all-time high, leaving others holding the bag. Read the full show notes on Forbes.com: http://www.forbes.com/sites/laurashin/2019/04/23/charlie-lee-on-why-litecoins-goal-is-to-be-used-for-payments/ Read Charlie’s additional answers: https://unchainedpodcast.com/the-cutting-room-floor-charlie-lee/ Thank you to our sponsors! CipherTrace: https://ciphertrace.com/unchained CoinDesk: Since 2015, Consensus has been recognized as the most influential blockchain and digital assets event of the year. Hot-button topics such as adoption challenges, privacy,blockchain innovation, capital formation and more take centerstage as experts and pioneers give voice to the new developments and innovations occurring around the globe. Don't miss this three-day experience! Register today: www.consensus2019.com. Use promo: UNCHAINED300 to save $300 on your pass. Episode links: Litecoin: http://litecoin.org Charlie on Twitter: https://twitter.com/SatoshiLite Charlie on Unconfirmed, discussing the 10th anniversary of the Bitcoin white paper: https://unchainedpodcast.com/charlie-lee-aka-satoshi-lite-on-the-10-year-anniversary-of-the-bitcoin-white-paper-ep-044/ Charlie on Unconfirmed, discussing the Ethereum Classic 51% attack: https://unchainedpodcast.com/the-ethereum-classic-51-attack-how-it-happened-and-why-the-price-didnt-crash-ep-055/ Unchained interview with Charlie's brother, Bobby Lee: https://unchainedpodcast.com/bobby-lee-ceo-of-btcc-on-why-the-chinese-probably-arent-using-bitcoin-to-evade-capital-controls/ CoinDesk on Charlie’s work after Coinbase: https://www.coindesk.com/life-coinbase-can-charlie-lee-keep-litecoins-revival-alive CoinDesk profile: https://www.coindesk.com/coindesk-most-influential-2017-3-charlie-lee Charlie selling his LTC: https://www.reddit.com/r/litecoin/comments/7kzw6q/litecoin_price_tweets_and_conflict_of_interest/ WSJ article on selling his LTC: https://www.wsj.com/articles/cryptocurrency-founder-tries-a-new-play-sell-it-all-1513873355?mod=searchresults&page=1&pos=3 Multicoin Capital report on Litecoin: https://multicoin.capital/2018/09/14/debunking-market-narratives-litecoin-ltc-edition/ Magical Crypto Friends: https://www.youtube.com/channel/UCVVDsIYJBQ_C7Bh_aI3ZMxQ Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, Laura here. Before we get started, a couple quick notes. First, upon listening to this episode, there were two points where I wanted to ask Charlie some follow-up questions that I didn't think of during the recording. He agreed to answer those by email, so check out the show notes for his responses to those questions. You can also find them on Unchained Podcast.com in the newsletter section. Second note, if you're like me, maybe you think about crypto all day, but have no one to talk about it with in your real life. Yes, this describes my situation. My friends are, at best, marginally interested. Or maybe you're lucky enough to have some real life friends who find crypto fascinating and like to talk about it. Either way, bring yourself or your like-minded buddies

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CipherTrace is helping you grow the crypto economy by keeping it safe and secure. My guest today is Charlie Lee, the creator of Lightcoin. Welcome, Charlie. Hey, thanks, Laura. Thanks for having me. You found out about Bitcoin when it was $2. How did you hear about it and what were your initial thoughts? Well, actually, I found out about Bitcoin when it was 30.

And then it dropped it to over the next year. Oh, dear. Okay. Yeah. So I got in at a high. Well, you learned very early how this type of money operates, I guess. Yeah, it's extremely volatile. So, yeah, how did you hear?

about it. And like, did you immediately grasp it or were you skeptical at first or what? Yeah, I heard about it from reading an article on Silk Road. I believe it was a wired article. And I was talking about like how the Silk Road drug marketplace only accepted Bitcoin. And I pretty much immediately understood the value of Bitcoin and what it's all about because I've previously been quite into gold. And I saw like the the need of sound money and how fiat currency is, is just broken. And when I saw Bitcoin, I saw that this is like go a bit better. Right. It's like gold where you can instantly send it to someone on the other side of the country for very low fees. That's so interesting. I feel like you're, you know, maybe the like 10% of people that say that they immediately

grasped it because I feel like the 90, the other 90% are just like, oh, I first, at first dismissed it. But it sounds like you were sort of primed. Yeah, I think I just had the background. And also with the background in computer science, I can actually dig into the code and see what it's doing, right? Oh, right. And I know, so previously you worked at Google, is that where you were working at that time? Yeah. I worked at Google for six years.

And what were you doing there? Let's see. I worked on YouTube mobile, ChromeOS, and also Google Play games. All right. And so you found out about Bitcoin. and it was, I guess, 2011? Yeah, April of 2011, I believe. So how did you buy your bitcoins at that time?

The first Bitcoin I bought, I actually bought from Mike Hearn. So at Google, Mike Hearn was one of the kind of well-known guys who was into Bitcoin at that time. And he was talking about Bitcoin all the time. And I reached out to him and I guess learn a bit about Bitcoin from him and bought my first Bitcoin at $30 from him. Oh, I see. Okay. So you read about it, but then through your work, you realized, oh, there are other people here who are into this. Yeah, there were only like a few, right? Mike Kern was one of the bigger ones. Okay. And for people who don't know, he's a former Bitcoin core developer who famously left the project with this blog post that was also written about in the New York Times. and he talked about how Bitcoin was broken and sold all of his Bitcoins.

And then he went to work at R3, right? Is he still working there? Do you know? I don't know. I haven't kept in touch with him. It was funny because he famously rage quit from Bitcoin, right? He was so upset that Bitcoin, he thought Bitcoin needed to scale on chain and it wasn't, the community wasn't, like, didn't think the same way.

And he kind of just rage quit. Yeah, yeah. We'll talk about that a little bit more in a bit because I actually don't think he's, he was maybe the first like big one, but there have been others. So at that time, like you got your Bitcoin and then what did you do? Like what was the early Bitcoin seen like? And, you know, did you just kind of think, oh, just hold on to this for a little while or, you know, what were your thoughts? My thoughts pretty early on was that this is something going to be something big. So I was thinking like if as an investment, I think it would be like a very good investment. Of course, you just don't know because it's like so new and it's kind of like investing a startup. Right. Like if you had a chance to invest in Google pre-IPO, it would have been a huge like one of the best investments ever. But it's really hard to know that Google would become the Google of today, like way back in 1999 or 2000.

So same thing with Bitcoin, right? I saw it, like, it had huge potential. I really saw the potential in it. And I kind of really want to get involved. I mean, back in 2011, like everyone was, everyone in this space was, like, chatting on Bitcoin talk forums. And that was like one of the main sites where people talk about Bitcoin. all the time and talk about different projects. So you would just like troll the forums or not, you know, but you would, I mean, you know,

you would browse the forums and just converse with people about, like, what would you do on the forums? Talk about different, like, I also like started mining, right? Just a lot of people talking about how like the different kind of setups, how to mine, which pulls to use. different pool algorithms. Yeah, just everything, right, including like collecting physical bitcoins, for example. Cassaceous coins came out, I think, around that time.

And that was a very cool collectible you could get at the time. Also, I remember the first Bitcoin conference happened in June of 2011 in New York. And basically, who's who in Bitcoin. I mean, pretty much like everyone. in that space just gathered in New York and just had a good time. Really? Who were some of the people who showed up at that? The first day, like the morning before the conference, I went to kind of an event and I met Roger Veer, Jesse Powell, Michael Groniger, yeah, just basically people who are actually

really well known today, but who were probably like nobody back then. So Roger Veer was known early on as Bitcoin Jesus now is affiliated with Bitcoin Cash and Jesse Powell is the CEO of Cracken. And who's Michael Gonerger? He is now the CEO of Chainalysis. Oh, right, right. That's right. I did know that. I knew the name, but I couldn't remember.

Yeah, he's not very out there. Right. Yeah. All right. So, oh, and also when I ask about the mining, what did you use to mine the Bitcoin? a CPU or a GPU or what? When I found out about Bitcoin, it was already GPU. So I built a couple computers, each with like four GPUs in them.

So large ASIC, not sorry, not I-SIC, large GPU cards, like sticking out of the computer. It's pretty crazy setup. And it generates, like, so much heat. And noise. Yeah, I actually, when your brother was on the show, your brother Bobby, who, people should know it's kind of just a funny detail that Bobby and I were in the same freshman dorm at Stanford. But we didn't really know each other that well. Like the main thing I remembered about him was just he lived in the same hall as my friend. So it was like a big dorm

with like 250 kids in it or something. But anyway, I was going to, oh, but no, I was going to say that he also said that he was mining it early and that it was like generating a ton of heat too. So. I think I sold my mining computer to him when I was done with it. Okay, yeah. Yeah, he did say my show. I gave it to him. I don't remember. Yeah, he did say in the show that you were the one who introduced him.

And then also, when it dropped from $30 to $2, what was your sense then? Like, were you still so convinced it would succeed? Yeah, I was because from my point of view, the defense. fundamentals didn't change, right? So the price drop was just because it was overhyped in the beginning and went up to 30. I think when it broke dollar parity, after it became more than a dollar, it went like pretty much straight to 30. And then it crashed down back to two. I realized that the fundamentals of Bitcoin hasn't changed. So it still has huge potential. So definitely wasn't worried. But I was kind of enjoying myself just like.

mining and just playing around with it. I feel like you need to, I don't know, be like one of those investment advisors or something and like you just seem so calm and to have such a level head. And I wish other people would have the same reaction. It's kind of nice to hear. Yeah. I mean, the key is to not put everything in, right? Don't invest more than you can afford to lose.

That's like the tagline. Exactly. exactly for something you know super risky all right so before you started like when you also tried to at least as far as i could tell from what i read online you tried to revive a coin called fairbricks or maybe that was something you launched i saw like different one post said that you try to revive it when said you launched it so what's what's the story about fair bricks so the story about fairbricks is there was a coin called tenobricks that used the script mining algorithm and It's CPU minable coin when it launched.

So the problem with Tenerbricks is it was launched by an anonymous person, and he pre-mine 7 million coins for himself. So what that means is he's just before, like in the first block, he basically assigned 7 million coins to himself to an address he owned. And from that point onwards, everyone's mining like, I don't know, 10 or 20 coins a block. So if the coin became successful, he would become extremely rich. And people liked the coin because it was one of the, like, it was the first coin that was CPU mineable. So it brought back the CPU mining in the space.

But then people weren't happy with the pre-mines. So someone had an idea of creating a coin called Fairbricks and basically a fork of tenet bricks. And the only difference is that it won't have. the pre-mine. So he needed technical help, and I offered the help him technically, so wrote the code and helped launch the coin. The problem was that the code for Tenner Bricks was really buggy, and during the launch of Fairbricks, just lots of issues came up.

Some of the blocks were mined without any coins, and I think the coin was also 51% attack from the beginning. So just lots of problems. and kind of decided to give up on that project. Okay, yeah. It sounds like that's another way in which you sort of like learned the lessons of this space very early, actually. Do you know what I mean? Yeah.

Yeah, definitely. I mean, I was pretty, pretty into the space from the beginning, right? Yeah, yeah. Well, all right. So then tell us why did you create like coin? So after Fairbricks failed, right? Well, I didn't really fail. It just the launch was a mess. I decided to kind of step back and create a different coin, right? Start from, instead of forking from Tentadricks's code, fork from Bitcoin and modify a few things. So like with CPU mining, also with faster blocks, and launch something that is like as fair as possible. I realize people don't want to invest and put effort into a coin that is unfairly benefiting the creators, for example.

And did you ever consider launching it anonymously the way that Satoshi did? Actually, when I launched it, I wasn't really, I wasn't a public figure, right? I wasn't publicly known. It wasn't publicly known who was behind the username on Bitcoin Talk Forum. So I went by the user idea of, yeah, Gobbly, C-O-B-L-E-E. And I didn't come out until like a few years later with my real identity. When I started going to like Bitcoin conferences and kind of revealing myself, that's when I came out. Oh, wow.

So and was that like a decision that you were like, okay, I'm not going to be anonymous anymore? Or? Kind of. There was a New York Times article. the author reached out to me to kind of write a little bit about like coin. And at that point in time, I decided, yeah, that's fine. I'm okay with that. And to come out publicly.

I think that was a point when I became publicly known. And why did you decide that rather than staying anonymous? I don't know. Actually, I didn't think too much about it. I wasn't really trying to be anonymous. It's just that there was no need to be kind of public about who I was. about my real identity. I mean, in hindsight,

it might have been better if I stayed anonymous. There's definitely benefits of being anonymous. And so, yeah, why do you say that? Like, what would the benefits have been? Just more privacy, right? I'm definitely concerned about, like, privacy and security and people being upset about me or just people who think that I have a lot of money

and want to, yeah, just concerned about that. Yeah. Yeah. It's not the first time this week I'm having this conversation. I think it's on the minds of kind of all the prominent people in the space. And I'm sorry that you have to deal with that. I really think it's terrible that people would target, you know,

other people for their money. But it's the world we live in. Yeah. And it's also not just the fact that it's also the fear of being targeted, right? Maybe no one will ever. target me. And that's awesome if that's the case. But then always living in kind of fear that you might be a target is just not that finite. Yeah. No, I get it. I got it. Even in my own small way, you know, I'm not like the actual people in the space. But yeah, like I wrote that big

article about the phone hijackings that were going on. And, you know, before I release that, everybody I interviewed was like, oh, before you publish this, you should make sure all your security is, is, you know, buttoned up. And so I did that. And, you know, I don't know what they would have gotten. It might have just been like something to just annoy me because they were irritated that I had exposed what they were doing, maybe something like that. But, but yeah, like, I totally get how you feel. So actually, let's keep talking about the fair launch concept. because so when you launched like coin you only launched it with 150 coins pre-mined so how did you you know decide so it's like a tiny amount but how did you decide on that like and how did

in general like how did you make it what you deemed fair yeah so there's a funny story behind that so the idea was to launch it with um i originally only mine two blocks one is the the first block is the genesis block right and it And I also mine a block on top of that to make sure that everything is working fine. And the way I launched Litecoin to try to make it as fair as possible is to release the source code and binaries. So applications where you can actually start mining. I did that a week before the actual launch. But the catch is that with the source code and the binary, you can't mine the main net light coin.

You can only mine test net light coin because I withheld the source code. Genesis block. So the hash of the Genesis block is hard-coded in the code, but I would file the details of the Genesis block, like two constants that you need to know in order for you to actually mine on the mainnet. And what I did was that at launch time, I just posted those two constants. And all people had to do was update their config file, restart the client, and we'll start mining on mainnet right away.

Right. So that was one way that I did to try to make it as. as fair as possible. Because some of the coins were launched where either the binaries aren't released quickly enough or the source code wasn't released. So there was no way for people to actually verify the source code or compile binaries for themselves. So it's hard for people unless they want to take the risk to actually start running code

that you don't trust. So I try to make this as fair as possible to make it easy. and for anyone to actually start mining the second it was launched. Oh, that's interesting. So let me make sure that I understood this. You mined the Genesis block and one additional block just to make sure everything was working correctly. You found that, yes, you indeed, it is working correctly and you were able to get 150 coins. So at that point, then you release the source code and the binary so people could kind of run their little mining machines, I guess, on test net.

and then once they had had an opportunity to make sure that that was working, then what you did was release the details they would know in order to be able to immediately switch to Mainnet. Did I understand that? Yeah, that's right. And one of the, the reason why I actually mined two blocks instead of just one was because I accidentally connected my node to the internet for like an hour or so. And if someone connected to me, they would have downloaded the Genesis block.

And this is like some technical thing. So I basically mine another block and lock that in to make sure that no one could actually like secretly mine before the actual launch. So that was the idea, right? So no one could secretly mine before the launch. So when I launched it, I released the constants, the two constants to everyone and people can update their software and start mining right away. And it was extremely successful because that also helped protect from 51% attacks. So because no one, first of all, no one could mine before the launch. And second while, there will be like thousands of people mining at the same time.

And it would be hard to overrun that network for any one individual to overrun that network. Oh, wow. And is that how many people you had mining from the start? From the looks of it, yes. from like the hash rate that we saw in the beginning, there were, I would say, like, a couple thousand people. And it's not a lot, but it's for the start of a coin, it's pretty good. It's very good. Yeah. And at that time, too, when nobody really even knew what all this was.

Yeah, the community was small. But there was definitely a healthy community playing around with all coins. Yeah. The interesting thing is a lot of, of coins forked off from like coin and copied like like coin right um but very few coins actually copied the way i launched like coin like people just didn't copy that and they launched it with without binaries or there's a lot of coins that were launched with um they call like ninja mining where i've yeah like sometimes they're launched to friends and family only for like the first

week. So the creators, friends and families are like mining before everyone else get a chance to mine. That's interesting. Well, I guess you would think that they would have learned from the Tennebrick situation that, like if you do that, people are less interested in the coin. I think people in general are greedy, right? Just they, yeah, I mean, and if you look back on it, one of the reasons why I like coin was successful is, I believe it's people. because of the fair launch, right? But it's hard to kind of figure out that that's truly the case, right? Oh, like, meaning you can't know if the developers?

No, no, you can't know that. You can't know that that's one of the reasons why Lycorn was successful. Oh, oh, right. Right. So, yeah. Well, yeah. Well, so how do you define success? Like, would you say that so far,

that we're at this moment that it is successful. Like, what, what's your goal with like coin? Well, it's extremely successful, right? So when I launched like coin, it was more just like a fun side project, right? Just something I did on a side for fun. I didn't expect it to become anything big, right? To put it in perspective, when I first found out about Bitcoin, Bitcoin's market cap was $200 million.

When I launched like coin, Bitcoin's market cap was around like, $100 million. So NyQuine today is $5 billion. Right. So it's 50 times as large as what Bitcoin was when it launched, when Bitcoin launched. So I mean, that's extremely, I mean, that's, I totally didn't expect that to be the case to happen. And at that time when you say that you launched it as a fun side project, like what did you imagine people would use it for? Like did you just think, oh, this is going to be nothing or did you have some kind of goal for it or what?

Yeah, well, when I launched like when Bitcoin, Bitcoin was still like an unknown quantity, right? Like no one expected, no one knew where Bitcoin was heading. Right. It's a decentralized currency that no one's really using for anything except for Silk Road. Right. So no one really expected much from Bitcoin and I didn't expect much from like coin. Right. So when I launched it, one of the things like I kind of saw it being was what I set out initially being like silver to Bitcoin's gold.

Right. If I saw I saw Bitcoin as digital gold and I've seen throughout history of people using more than one currency in a case of gold and silver. And I saw like like on complementing Bitcoin, right, being kind of a cheaper version of Bitcoin where fees will be less. and people potentially could use it for more things. Okay. And when you say silver to Bitcoin's gold, so in the real world, silver has like particular uses. And so when it comes to the digital world,

like what were those uses that you were imagining? I was thinking more along the lines of both gold and silver being used as money and not necessarily the industrial use of silver, which came much later, right? So being just metals that are rare and sought after and has value made gold and silver useful for money. Okay. And so then like what would be the different ways that Bitcoin would have, that you were imagining Bitcoin would be used versus like coin? Yeah. So Bitcoin would be used for, larger purchases, right? So fees will be higher on Bitcoin. So it wouldn't make sense to buy coffee, for example, on Bitcoin. But you would do so on like coin because the fees would be lower and a

smaller percentage of the actual purchase. The thing with cryptocurrency is that the fees for transactions are based on the size of the transaction, not the amount of the transaction. So if you're sending like a million dollars worth of Bitcoin, it will cost you the same amount of fees in general as if you're sending like $5 worth of Bitcoin's. Right. So when Bitcoin becomes really popular and people see the value in paying and using it, the fees will inherently go up. And we see that. Right. When the blocks are full, then people are fighting for the block space, which is a valuable.

commodity and people are willing to pay more because you're comparing that to like for example wire transfer something that takes like a few hours and has all the problems with wire transfer and also costs like $30 to do a wire transfer but if you can send Bitcoin which is you can send like $10 million for Bitcoin and only pay $10 and it's it'll confirm in like 10 minutes that's a very good use case compared to wire. So people are willing to pay the $10 for fees. So that's why you'll see Bitcoin fees go out because people actually value spending Bitcoin.

And like coin having like a larger block size can kind of work alongside that, right? Can complement Bitcoin for smaller purchases. All right. And so actually like after you created like coin, you ended up leaving Google to work at Coinbase. What did you do there? Yeah, so in 2013, I decided to kind of go all in on crypto and actually work on cryptocurrency.

So I joined Coinbase because I realized in order for Bitcoin to succeed, it has to be easy to use. There has to be easy on-ramps and off-ramps. And Coinbase was really making it a lot easy for U.S. citizens to – or people in the U.S. to buy and sell Bitcoin. So, yeah, so I decided to join them in Quick Google. All right, we're going to discuss how Charlie famously sold all his like coins after the break, but first a quick word from our fabulous sponsors.

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So during this period when you were working at Coinbase, I think there was kind of a little stretch where you didn't really work on like coin. So what means you get more involved again and when when did you get more involved? Yeah, there's actually quite a stretch where I wasn't working that much on my coin. I was focused on Bitcoin with Coinbase. And I would say like early 2016, I decided to kind of shift my focus a bit. I saw kind of a need for me to kind of step back into to start working on Lycone again. this was because I saw the Bitcoin having problems with activating Segwit.

There was a lot of just misinformation out there about how Segwit is not a good upgrade for Bitcoin. And I figured that there's something I can do about that, right? Being the creator of Lightcoin, I can help try to get Lightcoin or Segwit activated on Lightcoin to kind of prove to the world that this is actually a good upgrade, that it leads to awesome things like Lightning Network, and there's nothing to be afraid of. There is a lot of just fake news around Segwit. People, for whatever reason, don't want to see Segwit on Bitcoin,

and they were just talking about the fact that if you use Segwit addresses, miners can just steal money from it, it's unsafe to use Segwit, stuff like that. That's just from, if you understand Bitcoin and Segwit, from the technical side of things, you realize immediately that's just like FUD, right? That's people just lying about it, trying to scare people away from it. Yeah. And for listeners, hopefully my listeners know what SegWD is, but in case you know and FUD,

because you know, Segwit is segregated witness, which was like basically a scaling solution for Bitcoin and FUD is fear, uncertainty, and doubt, which definitely you should know that term if you're interested in crypto. So at that point, you decided to basically what leave Coinbase and then start working more on Likecoin in order to bring Segwit to Like Coin to show that, you know, all the, the misinformation about Segwit was not true. Is that what your goal was? Pretty much. And also I wanted to, it also, it's good for Lycoin, right? So this upgrade allows, makes it possible for lightning network to happen. And I realized that scaling on-chain is not a solution

because it just hurts decentralization. So the solution to scale Bitcoin and like-coin is to scale on second layers. And Lightning Network was an up-and-coming solution that really, I thought, was awesome for helping scale Bitcoin and Bitcoin. So SegWit was needed for that to happen. Yeah, so in 2016, I told Coinbase I wanted to start working more on Lightcoin.

And I took, I believe I took three months off to kind of totally work on Likecoin. And then when I came back to Coinbase in like late 2016, I told him I wanted to kind of leave Coinbase and focus 100% on Like Coin. All right. So that, I guess, must have been, yeah, late 2016. So then a year later is when the crypto markets hit what we now realize was their all-time high. And you famously sold all your like coins. Why did you do that? Over the, like over 2017, I became a lot more, or 2016 to 2017, I became a lot more influential in the space because of my work on my coin and Segw.

and helping Bitcoin with Segwit. And my Twitter follow account grew exponentially, kind of tracking the price of everything. But I also, I, yeah, throughout that time, I realized that what I say had potentially had quite a bit, big influence on prices, especially Lycron price. And some of the information, like some of the tweets I posted, people were questioning my motives, right?

Am I saying this because I'm trying to pump the Lycorn price, or am I saying this because it's actually good for Lycoyne and people are questioning my motives? And I also kind of felt conflicted because I don't want people to think that I'm doing this for the price or for my own benefit. My goal for everything is to, for Lycoin to succeed, is for adoption, right? Price doesn't matter in the,

price doesn't matter, right? Adoption, yeah, price would follow adoption, but I shouldn't be focused on price. So after thinking about it for a while, I decided that I kind of don't want the distraction of both people thinking I'm doing stuff because I'm pumping the price for my own benefit and also because I don't want the kind of the distraction

and questioning myself that I'm not doing this. for the best for Lykecoin, but only because I wanted to make more money. So at that point, I decided to just sell everything and focus on the project and not the price. Well, so the day that you announced that you had sold or donated all your like coins, that was the day after Lightcoin hit its all-time high. I actually checked it on OnChane FX. And the day it hit its all-time high was $356 and now it's like about 69. So how do you feel about that idea that it looks as though you sold at the top and left others holding the bag? I don't think that's exactly true because I remember after I sold, the price kept going up.

Oh, really? So the day you announced and the day you sold are probably because. Yeah, maybe. Did you announce the day after you sold? Didn't it hit like 400? Oh, gosh. Like I think I sold, yeah, depending on which exchange you look at. But it definitely hit like 400.

But I sold my last sale was at, was it like $350 or something. Oh, okay. But for sure, the timing is suspect, right? And that's why people are hating, like kept trolling me about selling at all-time high because some people actually thought I caused the whole market to crash, which is ridiculous. Wait, the whole market or just the like coin market? What do you mean about it? The whole market.

Like the whole crypto market or just like coin? Yeah. But I mean, like coin didn't crash more than Bitcoin, right? It's very close. If you look at it today, um, compared to the day I sold, it hasn't really crashed.

Maybe crash a bit more, right? But not much more. Right. So if I, if I cause the whole, if I cause like coin to crash and I kind of had to blame me for causing everything to crash. And,

and, okay. But basically, like, they're saying like your announcement, right? Because like, in your announcement, you kind of implied that you had sold it all on G-Dax and it didn't really move the market. So it doesn't sound like it was like a ton of like coin. No, it's not, right? So one thing about like coin that people don't realize is I didn't pre-mine anything, right? So all the like coins I own were either mined by myself or bought on an exchange. So I know plenty of people that had a lot more like coins than I did. So it's not that. that unlike people like Vitalik who has a lot of Ethereum or like creators of other coins or ICOs that just hold on to a lot of their own coins, I for, yeah, I didn't have a lot. So my selling coins didn't really affect the market. And that's also one of the reasons why I wanted to sell it before I announced it. Right. So if I, if I announced it, I think the fear of people, fear in how many coins I

had would have caused the price to, would have hurt the price a lot more. But by announcing that I already sold and it didn't affect the price, there's no fear that I'm going to sell more later. So I think that helped. But I think one thing I didn't kind of account for is people are talking about how now that I don't have like coin anymore, I don't have skin in the game, right? And people said that they don't believe in light coin anymore because I don't own any, which is, so stupid in my opinion, right? If you're not holding onto Lykecoin because I don't have any, then you kind of, your reason for holding and using like coin is just silly to begin with. And the project is already a failure, if that's the case. This is supposed to be a decentralized currency.

So just because the creator doesn't hold it anymore shouldn't affect how useful the currency is. So, so okay, I mean, I guess like, you know, to my mind, they're just sort of saying, hey, incentives exist. And a traditional way we motivate people to work on things is to incentivize them, you know, which is why people get stock options or, you know, equity or whatever. So, but you're saying, oh, that's the old model. That's like the startup model. And it's centralized and in a decentralized world that doesn't matter. Or, I mean, like, what's your take on incentives? Like, don't you agree that kind of being?

To a certain degree, to a certain degree I agree, but unlike other things, like, I am still extremely incentivized to to work on like coin. If like coin succeeds and does well, I do well, right? Like just, I'm not incentive. Financially, I'm already fine, right? I don't like financially, I'm not motivated, right? I'm working harder today than I, than last year or the year before, not because I'm financially incentivized. Kind of I'm working on something I'm passionate about.

So I don't need incentives. But people don't realize that. And for dumb it matters. All right. Well, one other thing I want to ask you about was you've kind of hinted at, you know, like you have, I think, strong notions of fairness. What's your opinion on? coins that allocate a percentage of the block reward to the developers of that coin?

Let me see. So I think as long as they're upfront about it, it's okay. So people who are investing in these coins, they know that a certain percentage of block rewards are going out to fund developers. And I think that's fine. And in some case, it's really needed, right? One thing about light coin is it's kind of hard to find developers because we don't have a lot money to pay for these developers. So we're raising, like the Icon Foundation, we work on raising money and using money to pay for developers. But unlike ICOs or other projects, we just don't have millions sitting from selling our ICO tokens to fund these developers. So yeah, I think projects that do that, it's kind of needed. But I think for coins like Bitcoin and like coin, if you really want

to become like decentralized money, there can't be any centralizing. kind of actions like using mining rewards you pay for developers. So how does the Likecoin Foundation raise funds then? We sell merchandises. We work off of donations. We try to be as efficient as lean as possible. So what is the annual budget? Annual budget is like less than 100,000. Oh, wow. Okay.

Well, we'll see. Yeah, we have a huge, we have a huge network of volunteers. People who are passionate about like coin and sound money and Bitcoin that volunteer their time and we don't pay them anything. And I'm very grateful to these volunteers that help us out a lot. Yeah, this is really interesting because during that ICO phase or the FAT protocols phase, or not fat protocols, but yeah, it's really, it's even before the word ICO was used in when people were talking about app coins.

I feel like at that time, everyone was like, oh, like the point is you, you know, do a crowdfund with these tokens and it incentivizes those people to grow the network. However, what we've seen is those were just speculators who, frankly, aren't really incentivized to grow the network. Like a lot of these people aren't using these coins. They're just holding on to them. Correct. And they flip it as soon as they can, right?

Yeah. And it's fascinating how you guys don't have that mechanism. And yet you do have volunteers who, I guess, passionately believe in like coin and are trying to help promote it. So I think basically this means that all the crypto economics theorists who, many of whom I featured on my show, because yes, I do find these ideas fascinating. probably a lot of their theories have been proven incorrect. So we will have to see what actually turns out to work.

Well, at least in the case of like coin, right? Lightcoin is much different, at least a project. The foundation is very different from other coins and foundations. Yeah, yeah, for sure. So you talked about, you know, that early vision for Lycoyne. what is your vision now? Is it different or is it the same? Like what do you imagine it will be used for now?

Or, you know, what are the ways in which you're trying to get it used? It's very similar, right? I still see, I've always seen like like like coin as a compliment to Bitcoin. I see Bitcoin still being used. Like, like coin is not out there to replace Bitcoin. Unlike a lot of other coins that try to say they're better than Bitcoin. I think it's tradeoff. A lot of people don't talk about the tradeoffs.

People talk about how they have fees are cheaper. Bitcoin Cash constantly talks about, or people in support of Bitcoin Cash, constantly talks about how Bitcoin Cash transaction fees are like a hundredth of that of Bitcoin. But you get what you pay for, right? The Bitcoin's security is more than 100 times that of Bitcoin Cash, right? Maybe the hash rate is not more than 100, but the fact that Bitcoin's, security is like you can't you can't attack bitcoin whereas you can easily attack bitcoin cash so that matters a lot right so that's why the fees are less and same for light coin right light coin is cheaper um and the

security is less than bitcoin so if i if i'm sending like millions of dollars of light coin it's not as secure as sending million dollars of bitcoin so people who actually moving lots of money they would want to use Bitcoin. And I think that's fine. I think Lightcoin can complement Bitcoin perfectly fine. And with Lightning Network, one of the reasons why I think Lightning Network is really good for both Bitcoin and Lightcoin, not only does it help at scale, it can also add cross-chain atomic swaps, where people can easily, in a decentralized manner, swap between two different coins instantly. I think technologies like that, we haven't really seen the true potential. of that. Like, I'm excited for what, like, what we'll see there. Yeah. Just the concept of it is so cool.

One thing, though, is so if the main purpose of like coin is for payments, why would someone use light coin over a stable coin? It depends, right? So it depends on how easy it is for you to get that stable coin, right? And the stable coin in the end is still likely to be, controlled, right, by governments or companies. So you're still at the whim of that central, centralized party, right? Whereas like coin is decentralized like Bitcoin. Yeah. Well, I mean, stable, you know, there's kind of a spectrum of how stable or how centralized stable coins are. Yeah. But then. But the decentralized stable coins have not proven to work yet. possibly we'll find one that is that works perfectly but the the kind of the attack surface for that

is potentially pretty large and it's unclear if they will actually work long term we've seen many algorithmic stable coins fail over time yeah or be shut down by the SEC well if they're truly decentralized then they can't be shut down right but yeah but there's also a possibility of them getting shut down, right? So like, for example, Teter could be shut down and also they are, you have to trust the company that they're not, they have enough money to back their reserves. Yeah. Or enough reserves to back the coins, right? So, and then also with most of these stable coins, they're still, they're not censorship resistant. Right. That's one thing about cryptocurrency.

One of the values of cryptocurrency is the censorship resistant part. Right. I would say that's, that's what gives cryptocurrency most of its value. Well, what about die? I don't think that's censorable. However, it's not very stable because, as we've seen, it hasn't been able to keep the dollar peg. But that aside, I don't think that one is censorable, right? I'm not too sure about that, but I think it's also a bit, there's, it's centralized, right? It's not perfectly decentralized.

I mean, I guess nothing is perfectly decentralized. But there's centralized aspect of it. I'll look and you die more. I honestly don't know too much about it. I'm not really that excited about stable coins. Okay. Huh. Interesting.

Because that was all the rage last year and into this year. So we'll see if you were right. It is. But it's funny you talk about stable coins that is not actually stable. So that's the point. I know, I know. But I have to admit, I'm a little bit obsessed with Di. My listeners will know that from listening to my show. Yeah, I've, I did a really, really long double episode with Rune Christensen of MakerDAO, which is, you know, for the die stable coin. Because it's a very complicated system and just kind of endlessly fascinating. But anyway, so speaking of spending light coins, where can people spend their like coins right now? A lot of places, right? So Lightcoin is obviously not as everywhere as Bitcoin.

Even then Bitcoin's not, you can't really spend it everywhere either. So you can spend like coin on pretty much everything, right? So like plane tickets, meals, buying stuff online. We have like whole directory of places you can spend like coin. But I think the general idea is just to have more. more and more places that you can spend. You need for Bitcoin and like quite, right? So I think in order for it truly to be successful is you can just spend it anywhere, right?

It's kind of like, kind of like if you look at Visa and MasterCard, like credit cards, you can pretty much spend it anywhere, right? And we want to get there. But it's a chicken egg problem. People, for one thing, because the volatility of the currency, a lot of people don't want to spend it because they think that it's going to be worth more in the future. But that problem, I think, will solve itself over time as it becomes less volatile. And you need more merchants to accept it before people can spend it anywhere. And you need more people to spend it before

merchants realize the benefit of accepting it. So it's a tough nut to crack. Yeah. I mean, I feel like Coinbase went down this route with Bitcoin where they tried the merchants thing and it didn't work out. So like why, you know, why do you think that strategy will work for like coin? I think when Coinbase and BitPay did that, it's a bit too early. I think we need like technologies like Lightning Network

to make payments make more sense. And you need the price to become less volatile for payments to succeed. So when Coinbase and BitPay were doing it, it was in, what, 2013, 2014, I think it was too early. Yeah. So it'll take some time. Yeah, I feel like we could make that argument now still.

And not only that, but this goes back to my question about the stable coins. But anyway, actually, let's move on because also like coin is looking into adding privacy. I saw you mention that confidential transactions was one technology you were looking at and also the Memble Wimble Protocol. Are you planning on making light coin? a privacy coin or will this be optional privacy and like with you know both of these technologies like are you going to give users a choice of which type of privacy technology or what's going on sure so the reason why i'm looking into it is i realize that one of the properties of good money that's i think the only property of good sound money that's missing from bitcoin and like coin is

fungibility, right, the ability to treat every single coin exactly the same as every other coin, right? We don't have that today. If I send you some like, if I send you two different light coins, they're different because of their history, which is public on the blockchain. So you can see which coin, where the coins came from and you can use that to, to discriminate against one or the other of the coins. Whereas like, cash, for example, it's fungible. If I go to a store and I want to pay something with $20 bills, I have two-de-truths from it. It doesn't matter which when I give the clerk. It's, it acts the same, right? It's money. For good money, for good form of money, you want it to be

fungible. And for cryptocurrency, privacy is required for fungibility. If there's, if you don't have privacy, then you can always discriminate between two different coins. So, So I realized that I wanted to kind of add more fungibility to like coin. And in that sense, I want to add more privacy. And the things I was looking at was confidential transaction and also Mimbo Wimbo. Mimbo Wimbo is actually also has confidential transaction. So it's like it's pretty much like confidential transaction plus coin join. And it's something that we're exploring right now.

and the current thought is to add it as a soft fork and also opt in. So you can opt in to using Mimbo Wimble, moving your coins to kind of the Mimbo-Wimbo side of things into the Mimbo Wimbo extension block. Yeah, so we'll see where we go with that, but still work in progress. Still a lot of work to be done. So will that be like Zcash, the way that? on the on the on the zcash blockchain you can see some transactions but other ones you can't similar but it's more you can think of it as moving your coins to kind of a side chain that's kind of attached does that make sense

so you're you can move into the member wimble space once you're there everything is is private oh okay um and then you can also move out right you can pull the coins out of the member one space. Oh, wow. All right. And so are you definitely implementing that or you're just exploring it right now? We're exploring it. I really want to do it. In the end, we'll see if the community seems like the idea. So once we have a good grasp of what we want to do, we'll put together a proposal for the community review. All right. Well, we'll have to keep I'll have to keep tabs on that because I find the mimble-wimble technology fascinating. I just did a couple episodes on grin and beam and, yeah, super cool stuff.

So recently I did see some tweets that were critical of you and like coin, and I wanted to get your response to them. Sure. You probably saw them. Mike Novigrats of Galaxy Digital tweeted, Gold has an $8.5 trillion market cap. Silver is $15 billion. that is 0.17%. BTC has a $90 billion market cap and LTC is $5.7 billion, which is 6.4% of BTC. And then he said, silver is at least useful for industrial production. LTC is a glorified test net for BTC. I don't get this rally. Sell LTC by BTC. So that's one. And then the other one was like a shorter one.

to Sharjane of multi-coin capital said, LTC isn't the silver to Bitcoin's gold, but the full's gold. What's your response to tweets like this? Well, I did respond kind of to those tweets. Basically, there's more value to LTC than to like coin than just being a test net, right? Being a glorified test net. But I also do, and also like the comparison between gold and silver is not like, you can't take it too literally, right? just because silver is a certain percentage of gold, it doesn't mean that like coin has to be that percentage,

otherwise it's overvalued or undervalued. I think that's kind of silly to go to that extent of saying that because, yeah, because like coin ratio with Bitcoin is less than, or it's more than silver is ratio to gold, it must be overvalued. I think I can't imagine why anyone would make that comparison. Well, the digital world has to be exactly like the real world. Yeah. Yeah, it's kind of funny.

But also, I do question the motivation behind some of these tweets. For example, multi-coin capital has publicly said that they're shorting like coin. Right. So, of course, every chance they get, they will bash like coin. They even release an article or like a whole analysis of why they think like coin should go to zero. So it's to their, yeah, they have skin in the game for Lycoyne to not succeed. So I don't really put much weight into their post or their tweets. And I don't know if my No regrets has any destroyed Lycoyne or anything like that.

But you don't know, right? So I don't put too much value into people hating on like coin. So you're the managing director of the Lycoyne Foundation. how does governance work within the foundation and how much weight do you have within it as the creator of Lycoin? In terms of what? I mean, for the foundation, I'm the managing director. We have a few directors and we talk about stuff, right? So we respect each other and there's no, there's really no formal process of how decisions are made. It's kind of made within the directors. and I think just being the creator, I definitely have a lot of influence, right? Because people trust me and they trust my view, right, of things.

And that helps a lot. But in terms of like, in the end, light coin is still a decentralized currency. So the Lyquine Foundation is kind of a centralizing company, but we can't unilatically make decisions for everything. And the community also has a huge voice in how Lycoyne, what happens to Lycoyne. For example, before the Lycoyne Foundation, we had something called the Lycoyne Association. It's also a centralizing, a central company or a foundation that was there to help kind of promote

and help work on like coin. And they weren't doing a very good job. And that's why we formed the Lyquine Foundation to take over and do a better job. So if one day the Lycoming Foundation is like not doing a good job, someone else can kind of create another foundation to help out. It's similar to how like the Bitcoin Foundation, a lot of people think the Bitcoin Foundation is not really doing anything, right? But they have to name the Bitcoin Foundation.

Yeah, I have not heard anything that they're up to. for the longest time. I sometimes forget they even exist. Yeah, but they were a huge deal when they first formed, right? Right. Right. I wasn't around back then, but I can tell from stuff I've read. So, all right, you grasped the concept of cryptocurrency early and kind of the potential there.

So what do you think the world will look like in the future if crypto does become widely used? I think that we won't even know that you're using cryptocurrency in the back end. So, yeah, so I think if cryptocurrency really does become successful, becomes used by, become used by everyone in the world, you won't even realize it. Right. So I think the point, the whole point of this for money is transfer of value. All you care about is your transfer. value from your wallet to the merchant's wallet and they give you the item that you bought.

And in the future, that could happen with you sending them money and you don't realize that in the back end, it's actually Bitcoin or like coin or anything. Right. And that's when it really becomes successful. So you think it's really just about payments and like machines making those payments happen in a way that's more efficient, but you're not aware of it. Yeah. So there will be, yeah. Some people call like Bitcoin the kind of internet of money or just money that can be API for money. So you can machines, AI or you or humans will be using it.

And it's all about storing the value and spending the value. And that's all that matters in the end. All right. Well, we will see. We will see if this comes to fruition. So it's been so great having you on Unchained. I did mean to ask a question about magical crypto friends, but we basically ran out of time. So where can people learn more about you, magical crypto friends, and also like coin?

Yeah. So I'm doing, I'm one of four people on the magical crypto friends podcast. It's me, Samson Mal, Fluffy Pony, or Ricardo Spangney, and Whale Panda. You can check us out at Magical CryptoFriends. I think it's magical cryptofronts.com or you can find us on YouTube. And we're also doing a conference, magical crypto conference in New York. In May 11 and 12, come visit us there. I think it's an awesome conference.

And you can also follow me on Twitter, Satoshi Light. Yeah, I'm pretty easy to find. All right. And also, can I have a press ticket to magical crypto conference? No Sorry Oh man Harsh

Yeah I actually I actually have to pay for my own Like I want to buy a ticket for a friend So I had to pay for it myself Oh there literally aren't press tickets You have to talk to Will Panda How about that

I'm not in charge of press tickets But like we Yeah we try to be very As fair as possible and possibly. How about that? Fair than no. I guess I'll contact him and find out.

Of course, amongst the three of you, he's the only one I don't know. But anyway, I'll have you put in a good word for me. Yeah. I'm sure he knows who you are. All right. Thanks so much for, well, actually, also Charlie, thank you for joining us. Sure, yeah. For sure.

It was a lot of fun. Thanks so much for joining us today. To learn more about Charlie and Lightcoin, check out the show notes inside your podcast player. If you are not yet signed up for my weekly newsletter, go to Unchainedpodcast.com right now to get my thoughts on the top crypto stories of the week. And be sure to check out our new channel on YouTube. Unchained is produced by me, Laura Shin, with help from Rayleigh Gallup Polly, Fractualty, Jenny Josephson, Daniel Less, and Rich Strasselino. Thanks for listening.