Litecoin creator Charlie Lee has been known for his occasional controversial statement on Twitter. Today was no different as Lee has raised the ire of the Stellar community with a backhanded compliment. Reactions on Twitter were mixed, but generally the community did not appear to be in support of Lee’s assertion that Stellar Lumens does not deserve its market cap since it is not a mined currency.

Litecoin vs Stellar

So what did Lee say, exactly?

Lee: Good job Stellar… Not!

Here is Lee’s original Tweet from earlier that has already collected over 500 comments:

Basically speaking, he congratulated Stellar, but suggested that due to the fact that Stellar Lumens are not mined through proof-of-work or proof-of-stake, that they are somehow less deserving of their valuation and consequent market cap.

Further, in response to a number of comments left to the Tweet, Lee suggested that only cryptocurrencies that are distributed through a mining reward of some type are truly decentralized.

This is the same methodology employed by bitcoin creator Satoshi Nakamoto. In the original bitcoin white paper, Nakamoto states that utilizing a block reward to distribute the currency will help to ensure a wider distribution – as opposed to a centralized model such as a central bank.

Stellar Lumens, on the other hand, are not mined and were instead issued by the Stellar Foundation.

In order to distribute the tokens, Steller performed what is essentially an airdrop and gave away a large portion of the available Lumens for free. Today, Lumens are distributed through a process the group calls inflation which again releases them without a monetary or computational cost.

Community Target: Charlie Lee

Lee saw quite a backlash for his comment and suggested that Stellar Lumens and other non-mined cryptocurrencies like XRP do not deserve their market cap. Here are a few examples of the shade thrown at Lee in response to his “complement”.

Litecoin’s Uncertain Future

For the last 18 months, LTC has seemed to be a highly solid asset with a clear trajectory and use case. That being, since bitcoin fees were too high, Litecoin was the cryptocurrency of choice for spending. Now, Litecoin has seen a number of new and highly nimble competitors come onto the scene like Bitcoin Cash, Dash, Ethereum Classic, and many other popular choices that offer even lower transaction fees than Litecoin.

What’s worse is that Litecoin mining has arguably become highly centralized due to the Chinese company Bitmain being the only serious supplier of Scrypt-compatible miners, and that Bitmain operates its own Litecoin industrial scale mining operation.

Litecoin creator poses for photo with Bitmain CEO Jihan Wu

Even Charlie Lee himself has been accused of centralizing Litecoin when he infamously sold all of his LTC holdings when the asset was at its all-time high of well over $300 each.

But it’s not all doom and gloom for the once number three asset. Litecoin has recently partnered with TokenPay in the purchase of a large piece of a German bank, as well as a handful of other groundbreaking partnerships that could prove to help keep Litecoin relevant and evolving.

Litecoin prices recently have been steady between the $70-$90 range, so from a monetary perspective, Litecoin seems secure for the time being. But the Litecoin Foundation will undoubtedly need to keep working hard in order to make sure this asset doesn’t become irrelevant in the face of some steep competition.

Images via @SatoshiLite


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Posted by Robert Devoe

Robert is News Editor at Blockonomi. A true believer in the freedom, privacy, and independence of the future digital economy, he has been involved in the cryptocurrency scene for years.


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One Comment

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    Well first off I don’t hold any alts and you can tell by the comments that there is some bias here from those that do. That said I would actually agree with Lee in the fact that all of these coins like Ripple, Stellar etc that aren’t mined are in fact a centralized product. Most of the following these coins have to date is from newbie hype. In the next run up/mass adoption phase, some of these coins will completely disappear all together and these original coins that have proven themselves over time like Litecoin or even small cap coins like Vericoin (sorry newbs, you would have to have been around a while to know about this coin) will have the staying power/support, and start to really emerge and come to market. The devs behind these old school Legenday coins as I refer to them to my friends, are top notch and they are time proven. Now more often that not you are finding people that want to create a coin or have an ICO as a get rich quick scheme. Those coins along with their hype are, or will be short lived, and I believe Lee will be proven right in time. Coins like Dogecoin or Verge I feel have way more potential and long term staying power than Ripple. Ripple is a crap product controlled by about 7 people who “promised” they wouldn’t dump their bags as it goes to the moon. Just wait till that day comes, that is fools money. Keep up the hard work Charlie, and don’t get distracted with all these little crap coins, they will all be gone soon.

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