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Charlie Lee Sums Up Litecoin’s 10 Years History. Part Two: Exchanges + Betrayal

The creator of Litecoin, Charlie Lee, continues to guide us through memory lane. For part one, he took us through Litecoin’s fair launch. Considering the small number of projects that have managed to do this, it’s a pretty big achievement. Today, for part two, we’re going to cover the project’s relation with cryptocurrency exchanges. Charlie Lee wears his heart on his sleeve for this one, and tells a heartfelt story that ends up in betrayal. Can you feel the excitement in the air?

Related Reading | Charlie Lee Predicts Resurgence of Litecoin as Bitcoin Cash Falters

This part of the story is all about relationships, connections, and the long road to credibility. It’s also about Charlie Lee’s resistance and willpower.

Before we get into the meat and potatoes of the story, though, a light detail that shouldn’t go unnoticed.

Charlie Lee Gives Flowers To The Litecoin Logo Creators

There’s not much story to the logos, but it’s cool that Charlie Lee gives credit where credit is due. The first and the second one show evolution:

The second logo was designed by @mjbmetals. I still like that quite a lot. It looks well next to that Bitcoin logo.https://t.co/T5hzEldonI pic.twitter.com/Uy5qpl8JUP

— Charlie Lee (@SatoshiLite) October 7, 2021

And the final one is a simplification of the second one:

And the current logo is designed by Robbie Coleman (@robertfcoleman) and his team.

Of course being decentralized, there are many other logos that people have created and used. Some are pretty wacky. And people can use whatever logo they want and I can't do anything about it. 😂 pic.twitter.com/M7FgBcGPum

— Charlie Lee (@SatoshiLite) October 7, 2021

That being said, let’s get back to the story.

LTC price chart for 10/09/2021 on Coinbase | Source: LTC/USD on TradingView.com
Litecoin’s Long Hard Road To Exchange Listings

This contradicts the title, but, in 2011 Litecoin was immediately listed in the defunct BTC-e. The site was a pretty successful cryptocurrency exchange that fell into disgrace when the US Justice Department accused them of laundering funds from the Mt. Gox hack, but that’s another story. Regarding Litecoin, Charlie Lee tells us that the listing, “helped a lot as miners had access to liquidity pretty quickly. Litecoin quickly become one of the most popular coin on BTC-e.”

From 2011 to 2013, I spent a lot of time supporting Litecoin's early growth and pushed for adoption wherever I can. I pretty much talked to all the exchanges to support LTC. I realized that liquidity is super important for a coin. Without liquidity, you can't do anything.

— Charlie Lee (@SatoshiLite) October 7, 2021

However, even though Lee “pretty much talked to all the exchanges to support LTC,” it was two years later that the second one listed Litecoin. Bitfinex took a chance on the nascent project, “This was a huge deal for Litecoin. It’s the first major exchange to support LTC.”

At the Bitcoin 2013 conference, I remember attending a talk by Bitstamp Co-Founder and CEO Nejc Kodrič( @nejc_kodric). During the Q&A after the talk, I asked him if Bitstamp will add Litecoin. I think he just chuckled and went to the next question.

— Charlie Lee (@SatoshiLite) October 7, 2021

Then, Charlie Lee remember how he tried to get the CEO of Bitstamp to list them and he laughed him off. Only to list the coin in 2017. The same thing happened with BitPay, who ended up supporting Litecoin only this year. 

The Chinese exchanges, though, listed Litecoin from the beginning. “Sometime late 2012 to early 2013, 2 of the largest exchanges in China, Okcoin and Huobi, added support for LTC. That was huge.” A question arises, did Charlie Lee have to throw shade at those two exchanges this hard? “The trading volume was also pretty crazy, but unclear how much of that was fabricated.”

In 2013, I thought it was time for me to step away from Litecoin. I was very fortunate to find Warren Togami (@wtogami), Founder of the Fedora Project, to take over as Litecoin lead developer. Warren is amazing and we were very lucky to have him at the helm of development.

— Charlie Lee (@SatoshiLite) October 7, 2021

Charlie Lee And Coinbase, A Love Story

So, in 2013 Charlie Lee steps down as Litecoin’s lead developer and leaves the job to Warren Togami. At the same time, he leaves a high-paying job at Google because they weren’t interested in anything crypto-related. That’s when Coinbase gets into the picture. Lee contacts them to see if they’re interested in listing Litecoin and they end up hiring him instead.

I interviewed at Coinbase and on paper, it sounded like a horrible deal. I would have to commute to SF, which was an hour each way, take a 50% or so pay cut, work twice as hard, and miss out on all the Google perks. But it was a no-brainer for me.

— Charlie Lee (@SatoshiLite) October 8, 2021

According to Charlie Lee, “Coinbase was the hot startup and THE crypto company that is making Bitcoin easy to use. I knew that if Bitcoin didn’t succeed, Litecoin wasn’t going anywhere either.” A cold hard truth that all of the Altcoins have to live with to this day. Besides that, Lee wanted to eventually convince Coinbase to support Litecoin. How could he not?

But at least he created a cool banner for it. 😁https://t.co/7BToh7YNdX

After that, there were rumors of @MtGox finally adding its second coin, Litecoin. At the time MtGox had like 97% of the total Bitcoin trading volume. Support of LTC would be huge for Litecoin's liquidity. pic.twitter.com/rfBhA7z1Pm

— Charlie Lee (@SatoshiLite) October 8, 2021

The Chinese connection paid off and the BTC China, lead by Charlie Lee’s brother, listed the coin. “Although it was a huge news, what took him so long?!,” asks Lee hilariously. Also notice that the banner that he mentions plays on the fact that Charlie and Bobby are brothers. 

In 2015, there were rumors that the infamous Mt. Gox exchange was going to list Litecoin. At the time, this was THE place to be. Charlie Lee finally confirms the story, “The rumors were actually true. I was talking to the CEO, Mark Karpelès almost on a daily basis in mid 2015.” However, the Mt. Gox hack was exposed before they materialized those plans. And all hell broke loose. “In hindsight, it was a blessing in disguise.”

Then, as it happens, things turned sour in the Charlie Lee and Coinbase romance.

That changed though in 2016. The was when Litecoin trade volume exploded on Chinese exchanges and it was clear to me that Coinbase was leaving a lot of money on the table by not supporting altcoins. And it made business sense for Coinbase to add altcoins.

— Charlie Lee (@SatoshiLite) October 8, 2021

The Brian Armstrong tweet he refers to says: “Ripple, Stellar, and Altcoins are all a distraction. Bitcoin is way too far ahead. We should be focused on bitcoin and sidechains.” Wow. What would the Brian Armstrong of the present say about that statement?

Anyway, in 2016 Litecoin’s trading volume was exploding in the Chinese exchanges and Charlie Lee saw his opportunity. “This was also when Ethereum was starting to get big. So I put together a proposal to Brian and Fred Ehrsam to add both LTC and ETH to Coinbase.” The proposal’s thesis was that, since people in the US had no easy way to buy, store, and trade those coins, there was “a lot of unsatisfied demand.” And Coinbase could make a lot of money. 

There was a lot of unsatisfied demand. People in the US had no easy way to store and trade these coins. And Coinbase would steal a lion share of the demand if we added the 2 coins to start.

Both Brian and Fred like the idea but they crossed out LTC. They just want to do ETH.

— Charlie Lee (@SatoshiLite) October 8, 2021

Here it is: betrayal. The two Coinbase executives broke Charlie Lee’s heart by accepting the proposal, but only for Ethereum. “Although I went along with the plan, it kind of rubbed me the wrong way. Litecoin had a much higher global trade volume at the time and was the #2 coin in marketcap.” A little while later, Lee took three months of Coinbase to focus on his project.

Related Reading | CHARLIE LEE: AN UNCOMMON INTERVIEW

In the next episode, Litecoin’s story intertwines with Bitcoin’s and the controversial Segwit implementation. We’re going to discover that Charlie Lee and his team were instrumental in this. How? Tune in to find out. 

 

Featured Image by Executium on Unsplash – Charts by TradingView

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Charlie Lee Sums Up Litecoin’s 10 Years History. Part One: Fair Launch

The creator of Litecoin, Charlie Lee, is ready to celebrate the coin’s 10th anniversary. What better way to do it than by giving the public the oral history of Litecoin. Of course, that’s a figure of speech. Since it’s 2021, he gave us that “oral history” through a Twitter thread. And what a thread it is. It takes us back to the very beginning of the cryptocurrency space and, using documentation and images, lets us in on the secrets, the inner jokes, and the wholesomeness of times past.

Related Reading | Led By Litecoin, Mid-Cap Altcoins Bleed With Bitcoin

In this first installment, Charlie Lee will cover the most crucial part of the story: Litecoin’s fair launch. Buckle up people, it’s going to be a wild ride!

Charlie Lee On Altcoin’s Prehistory

A lot of projects saw the light of day after Bitcoin and before Litecoin. He names:

  • Namecoin. 
  • Ixcoin
  • Iocoin
  • Solidcoin
  • Tenebrix 

And somberly declares, “Every one of these coins are now dead.” According to Charlie Lee, the reason for their demise was a lack of fairness. “Most of these altcoins have a huge premine. Tenebrix for example had 7 million coins premined. That means the creator has incentives to pump the coin to a high price so he/she can profit massively without much work.” 

Most of these altcoins have a huge premine. Tenebrix for example had 7 million coins premined. That means the the creator has incentives to pump the coin to a high price so he/she can profit massively without much work. You get things like creators bribing exchanges for listing.

— Charlie Lee (@SatoshiLite) October 7, 2021

Then, Charlie Lee gives us the definition of “Ninja mining.” “If a coin was not premined, you get things like ninja mining. That’s when a coin is released silently to friends and family.” And tells us that some of those projects launched without releasing the source code to the public. The kicker, of course, is that Litecoin was a response to all of that nonsense. Fairness was crucial, and it’s the main reason the project still exists today. 

LTC price chart for 10/08/2021 on Kraken | Source: LTC/USD on TradingView.com
Litecoin’s Prehistory

After Charlie Lee settled on the name Litecoin, his first action was to buy all the related domains. “What a great move in hindsight. So now, we don’t have something like http://litecoin.com promoting Litecoin Cash instead of Litecoin. $38.85 well spent!” Shots fired! Friendly shots, though, but shots nonetheless.

The best part was that all the domains were available. So on 10/4/11, I bought them all on GoDaddy. What a great move in hindsight. So now, we don't have something like https://t.co/TFymqt9pKY promoting Litecoin Cash instead of Litecoin. $38.85 well spent! 😂 pic.twitter.com/ur0ckkHMsh

— Charlie Lee (@SatoshiLite) October 7, 2021

An interesting fact that Lee gives us is that, even though coding the coin was easy, the hardest thing to create was the genesis block. “The hardest part was actually to create the genesis block. Satoshi never documented how he did it and the code to do that was not checked in with the Bitcoin source code.” So, he did “some reverse engineering” and created this block right here. And then, Charlie Lee gives us another amazing factoid. “What a lot of people didn’t know is that I put the headline of Steve Job’s death in the genesis hash. This proves that the genesis block was created after 10/5/11.”

So I had to do some reverse engineering and managed to create the genesis block on 10/7/11https://t.co/lArbbucLGU

What a lot of people didn't know is that I put the headline of Steve Job's death in the genesis hash. This proves that the genesis block was created after 10/5/11. pic.twitter.com/Zn7tnRBgUM

— Charlie Lee (@SatoshiLite) October 7, 2021

Litecoin’s launch thread in the legendary Bitcointalk forums is an archeological artifact from forgotten times. The story starts with:

“Litecoin is the result of some of us who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin.  We wanted to make a coin that is silver to Bitcoin’s gold.  Various alternative currencies have come and gone.  Some brought innovation, but they all had problems.”

A hilarious story is that a young Vitalik Buterin hated the Litecoin name and said so in the launch thread:

I forgot to mention that I chose Litecoin because Litecoin is the lighter version of Bitcoin. It's faster, cheaper, and easier to use.

And we got to see a young & unknown (at the time) @VitalikButerin hating on the name. I prefer Litecoin over Etherium. Wait, is it Ethereum? 😂 pic.twitter.com/kCLUUNbiel

— Charlie Lee (@SatoshiLite) October 7, 2021

Back to the Twitter thread, Charlie Lee tells us, “The code was available for anyone to download and compile. So they can check the code to make sure.” And later on, that “People were able to immediately mine on testnet to make sure everything works on their system. This is very important.” The table was set for…

Litecoin’s Fair Launch

Since everyone that wanted to was “prepared to mine at launch,” Litecoin had the coveted fair launch. “To accomplish this, I of course had to share the genesis block with everyone. But I can’t just do that because people can mine a long chain in private from that genesis block.” And then, Charlie Lee reveals how he hid it.

Without those 2 parameters, one cannot start mining on the mainnet, but they can easily mine on testnet.

So I lied, there was a 2 block premine of 100 coins. 😂The genesis coins cannot be spent.

Then I did a poll on what time we should launch the coin:https://t.co/BWvGGFjNBN pic.twitter.com/AuXkqMB4QT

— Charlie Lee (@SatoshiLite) October 7, 2021

And he confesses, “So I lied, there was a 2 block premine of 100 coins. The genesis coins cannot be spent.” However, he had already told this to the community in that Bitcointalk thread:

“Litecoin will come with 150 premined coins: just the genesis block and the first 2 blocks to confirm the genesis is valid.“

Related Reading | Litecoin Foundation’s Project Director Makes The Case For LTC’s Network Effect

Then, Chalie Lee created a poll to ask the community when to launch. The option that he wanted didn’t win. Since fairness was what he aimed for, he prepared everything for the day the small community had decided. And then, he rickrolled them!

Over the next few days, I did everything to help people get their system set up.

A few minutes before the actual launch time, I posted this. Of course this was a link to Rick Astley's video. I had to. 😁 pic.twitter.com/isJIRPhEDv

— Charlie Lee (@SatoshiLite) October 7, 2021

Then, he posted the missing configuration parameters on the Bitcointalk thread and everybody was off to the races.

At launch, I posted the config paramters that were needed to mine on mainnet. All everyone had to do was paste that into their litecoin config file, restart their client, and they will be happily mining real LTC.

Of course, there was a mad rush of people mining LTC at the start. pic.twitter.com/ZyUcQ1UEe3

— Charlie Lee (@SatoshiLite) October 7, 2021

And, as they say, the rest is history. To close this chapter, Charlie Lee leaves modesty aside, “I think I managed to pull off the fairest launch of any coin. And that is one of the biggest reasons why Litecoin succeeded. Surprisingly, very very few coins copied Litecoin’s launch.”

I think I managed to pull off the fairest launch of any coin. And that is one of the biggest reasons why Litecoin succeeded. Surprisingly, very very few coins copied Litecoin's launch.

Ok, that's it for now. I will tweet more later about what happened between launch and now.

— Charlie Lee (@SatoshiLite) October 7, 2021

Tomorrow, join us and Charlie Lee to remember what happened between the launch and the present. The article is going to be as full of easter eggs and amazing stories as this one.

Featured Image: Screenshot from the Bitcointalk forums | Charts by TradingView