If you’re like most other users in the community, you’re probably wondering, ‘What the hell is Litecoin Cash?’ If you haven’t yet done your research on this issue, you may even be tempted to think that the same individuals that were behind the development of Bitcoin Cash are attempting to create a hard fork of the Litecoin currency.
However, this is not the case. In this article, we’ll give you a brief overview of what constitutes a hard fork, the differences between Litecoin Cash and Litecoin, opinions in the community on this hard fork, the reasons for its creation and what can be expected from this hard fork.
What is a Hard Fork?
For those that are entirely unfamiliar with the concept of a hard fork – this section is for you. However, if you already know everything there is to know about hard forks, feel free to scroll down to the next section.
Hard forks, in a nutshell, are basically a change to the coin’s software that lessens some restrictions.
What Do You Mean By Restrictions?
Restrictions refer to things such as block size, block time, or other aspects of the coin’s software. For example, if there is a block size of 3MB, then an increase to 6MB would constitute a hard fork.
How Are Hard Forks Implemented?
In an ideal world, full nodes and miners work in unison. Full nodes are all updated and running the latest software, and miners are all mining valid blocks that fit within the rules of the full node. In this setup, if a miner decides to produce a block that doesn’t conform to the software’s consensus rules, then that block is automatically rejected as invalid.
Typically, when there’s agreement in the community, the chain does not need to split in order to implement a hard fork. All full nodes will simply upgrade to the new software, and mining will continue on the original chain. This is called a ‘planned’ hard fork.
However, when there is not agreement, a split is all but guaranteed.
Because consensus relies on ALL full nodes agreeing to one set/standard of consensus rules.
If you’re more of a visual learner, check out these graphs from lightco.in.
We’ll revisit hard forks shortly, but now that you got the fundamentals down, we can dive a bit more into the nature of Litecoin Cash and understand what its premise was built from.
What is Litecoin Cash?
For those that are thinking that Litecoin Cash was instituted to serve the same purpose as Bitcoin Cash, you are sadly mistaken. Bitcoin Cash, while controversial and many may even argue against this opinion, was created as an alternative to SegWit and Lightning Network implementation in the bitcoin scalability war. Bitcoin Cash was the manifestation of an argument over scalability that had been brewing in the community for years up to the point of the actual fork. Thus, there were several different market players, miners and other entities that were in full support of the project.
However, Litecoin Cash stems from a very different reason. Rather than having any particular dispute with Litecoin itself, the developers have asserted that they simply wish to use Litecoin’s codebase as a jumping point for their own project. However, many would argue that there was no need to implement Litecoin’s code in such an abrasive manner. Since the code for Litecoin, created by Charlie Lee, is open-source, developers could merely create an entirely new coin with a codebase similar to that of Litecoin.
Given this fact, the ‘Litecoin Cash’ hard fork is without a doubt contentious. Perhaps what’s even more puzzling about its creation is that there didn’t appear to be any prior contention within the Litecoin Cash community at all. Nonetheless, the developers/originators of this project have still decided that this is the best course of action for them to pursue.
Their website can be found here. On the front of it, they state:
For those that are unable to read what is posted above, the website claims that it will introduce:
- New Coins for Old Miners
- ‘Rewarding the Community’
o 10 LCC per 1 LTC
- ‘Simple to Claim’
- Responsible Forking
o Replay attack protection
o New address prefix
- ‘Fair Launch’
o Pre-release of bootstrap
o Improved retargeting
- Modern codebase
o They claim that the tech has SegWit, which will allow them to implement other advancements to the blockchain in the same way that one would expect to gain on Bitcoin or Litecoin.
From a first look, these are surprisingly legitimate objectives that actually speak to some of the potential concerns of hard forking a cryptocurrency, such as replay attacks and ensuring a different address prefix.
Whomever or whatever decided that this project needed to be initiated at least possesses a fundamental and adequate knowledge to assess the risks of a hard fork and budget these considerations into their move.
Who the Hell Are These Guys?
The website does possess a developer team. Here’s a screenshot from the site below:
After inspecting these names, the most rational course of action, in the author’s opinion, was to do further research on those listed on the website to get a better feel for who these people are.
Given the fact that ‘Tanner,’ like the other individuals listed, only had his first name posted on the website rather than his entire name made the author suspicious.
However, it was decided that it was worth investigation regardless. After very briefly poking around the internet via Google, the author found an article that presented an interview done with ‘Tanner,’ the development lead of Litecoin Cash.
In it, the author of the article (who is not named), stated that the hard fork of Litecoin, which was announced here, received a substantial amount of backlash when it was posted (as they probably anticipated). Perhaps the most troubling statement that was made in the article was, “…the LCC team describes a way of claiming the free coins on their website by the use of their wallet – which needs the private key.”
Whoever penned the article appeared to at least be cognizant enough to state, “As one should know, you never put the private key into any other places like website or wallets, and as Crypto is nowadays wild west, the concerns of the community are not baseless.” He then goes on to assert, “However, as we researched the topic, we found several facts that made us think LitecoinCash is not a scam, but a team of knowledgeable nerds with profound mining experience and some kind of unfortunate marketing issues.”
The author then states, “While the slightly hysterical reaction by the community is understandable, we think it is important to stay grounded, take a deep breath and sober look at the facts to provide a balanced view – and we think it is just fair to give LitecoinCash a voice to clear the air.” Although the alleged research to support this statement as not provided directly in the article, we figured that it was worth at least reading through the interview to review the logic behind the decision from the words of ‘Tanner’ himself.
In the interview, this person Tanner states that they were merely browsing through the website, ‘Coinmarketcap,’ one day and noticed that there were ‘so few choices’ for SHA256 miners (Bitcoin uses SHA256 – however, some within the Core team are proposing an alternate hashing algorithm in the future). Given the fact that the environmental consequences of SHA256 mining have been spoken about at great length by a multitude of sources inside and outside the community, there has been a fairly strong movement in cryptocurrency in general to pursue other means of deciding who generates blocks in cryptocurrency. In fact, the inherent drawbacks of the SHA256 hashing algorithm is what gave birth to the Scrypt algorithm that Charlie Lee deployed on Litecoin and the Delegated Proof-of-Stake algorithm that developers such as Dan Larimer of $EOS have come up with.
The author then claims that miners that are using the SHA256 mining method are limited to either mining Bitcoin or Bitcoin Cash. This observation does actually ring true. However, the question of whether Litecoin Cash can provide enough utility to be competitive enough, profit-wise, for miners to even consider switching to it is an entirely different issue.
‘Tanner’ then makes a statement in this article that the author considers to be iffy when he states, “While there is no point creating a coin just for miners, it’s true that what’s good for miners is good for the network, and good for everyday use.” The author believes in this statement, Tanner conflates the term, ‘network.’ Generally, that word refers specifically to a certain coin. For example, there’s the ‘Litecoin Network’ or the ‘Bitcoin Network’ or the ‘Ethereum Network.’ However, all cryptocurrencies themselves are not on a universal network. Therefore, employing this logic to justify the use of creating another coin that has the SHA256 hashing algorithm is flawed.
Tanner does make a few true points though – SHA256, if profitable, does motivate the hell out of miners. In theory, if there were enough individuals that deemed Litecoin Cash to be legitimate cash, the SHA256 mining algorithm could help the network quickly acquire enough hashing power to become legitimate.
Tanner then states his primary purpose for implementing a hard fork versus simply creating an entirely separate cryptocurrency network when he says, “We realized that what we really wanted was a mature, widely-spread distribution. And what better way to get that than to use a few years of blockchain from a popular coin?” To his credit, this is a logical stream of thought. However, the obvious and easily predictable anguish in the community against this hard fork of Litecoin is enough to make one question whether the benefit of the ‘convenience’ outweighs the immediate negative and visceral reaction that the community will/has had toward Litecoin Cash.
The article then goes in to look at the coin’s tech, which we’ll cover a bit later in this article. The individual, ‘Tanner,’ appears to be cognizant of the fact that he does have a responsibility to inform investors of the nature of this hard fork, which the author personally agrees with.
Tanner also acknowledges that there are other Litecoin hard forks that are legitimate scams, but insists that his does not fall under this category. He also establishes that he and his team have absolutely no affiliation with Charlie Lee, creator of the Litecoin.
The logic that the team developer gives for naming the fork is interesting as well. Below, is an excerpt to save you the trouble of having to read through a bunch of quoted sentences (we probably should’ve done this earlier, right?):
Tanner, also states:
Truthfully, it’s extremely hard to argue against the logic that was put forth by Tanner in this article. One may disagree with the coin’s inception or its existence, but nothing that he said could be objectively thought of as ‘wrong.’ Thus, it is hard for the author to come out and claim that this is a ‘scam’ coin definitively.
Let’s take a look at the original release article that the Litecoin Cash team published on February 3, 2018:
The title of that article was, ‘Litecoin Is Getting Lit With The LitecoinCash Hard Fork (1:10 Ratio)’ – which is a bit abrasive in the semi-professional arena of cryptocurrency. However, like any other project, we should at least hear the merits of any project before making any definitive conclusions, even if other individuals in the community whom we respect are deeming it as a ‘scam.’
Rather than giving a dissection of the article, we will just post the relevant bits below:
The tech is actually pretty legit. The incorporation of SHA256 is a unique one. It has received a lot of criticism from individuals all over the world due to the fact that it has led to environmental degradation from the excessive electrical output from miners. However, it is a major part of the reason why Bitcoin is universally considered to be the ‘safest’ or ‘most secure’ network in all of crypto. The arms race-esque Proof of Work-style that Satoshi had originally incorporated into Bitcoin has effectively exploited one of humanity’s greatest incentives – money.
The adjustment of the coin supply by a factor of ten is an interesting update as well. The fact that the block difficulty is recalculated every block rather than every 2016 blocks is yet another noticeable improvement. If you look at Litecoin’s block explorer, you’ll notice that there is hardly any consistency in the rate that the blocks are produced.
It looks like the majority of the rest of the tech is adopted from Litecoin’s structure as well. Thus, when taking all of those things into consideration, if legitimate, this could very well be a “better” coin or an upgrade over Litecoin itself. That may be a tough statement for some to accept and one that is more than likely to draw ire from many readers, but the facts are the facts, regardless of what uncomfortable conclusions we must come to as a result of these facts.
At the time of writing (February 19, 2018 – 5:44 pm), the wallet is not yet available. The coins have, however, launched, as expected, at the 1,371,111 block height for Litecoin. They are now available on the YoBit exchange for anyone that is interested (which is not an endorsement or an encouragement to buy them or participate).
So What Should We Make of All This?
Most people in the community, particularly Litecoin fans, believe that the fork is a scam. This sentiment was no doubt ushered in by Charlie Lee’s blanket assertion of ‘scam’ on Twitter here:
Some of the bigger personalities in the ‘Litecoin Twitter’ community have denounced this fork as well:
Given the above statements from these individuals and others in the community, there are a number of clarifications that should be made.
First, what is a scam?
Yes, I pulled out the dictionary definition of ‘scam,’ so that we can all be on the same page here.
Let’s also look at one of Charlie’s statements that he made in the first Twitter screenshot that is posted above;
“The Litecoin team and I are not forking Litecoin!”
“The 1% premine to enrich the developers of LCC. That’s the scam.”
Unpacking These Statements
From what the author has uncovered about the coin and from what we have seen on social media and from the alleged developers themselves, there is nothing about this that makes the author justify that it is a “scam.”
Also, whether Charlie Lee is “behind” the forking of the coin or not, is irrelevant. By definition, contentious hard forks (hard forks where the blockchain actually splits) occur when the community is not at a consensus about the future direction of the blockchain.
In fact, few people know this better than Charlie Lee himself because he created his own fork of Bitcoin seven years ago:
But That’s Different
Perhaps it is with Litecoin. However, much of the community overlook Charlie’s previous foray into cryptocurrency:
What you see above is an excerpt from an article posted in 2013 on CoinDesk. The movements Charlie made are clear. He co-opted the name and technology of another altcoin, hoping to create his own, which sounds eerily similar to what Litecoin Cash is doing.
Another statement that Charlie Lee made, which impacted the price significantly at the time, came in 2014 when he stated that, “Litecoin does not need any development.”
Thus, is the Litecoin Cash team wrong for creating a cryptocurrency that they believe is an arguable improvement over Litecoin? That’s up for debate and the answer more than likely depends on who you ask. But the question of whether they need “authorization” or a blessing from Charlie Lee to do so should be answered with a resounding “No.”
Charlie Lee, the creator of the Litecoin, had to have been aware of the potential consequences of making all of the coin’s software and technology open source, which was a decision he made purposefully and willfully.
Check this out:
So Why the Anger?
For a couple of reasons.
- Perhaps Charlie Lee failed to do his due diligence on the coin and simply dismissed it prematurely, insisting that it must be a fraud.
- Perhaps Charlie Lee investigated the coin and its team on a deep level and felt it could potentially pose a threat, or at least harm the adoption rate and ‘belief’ in the Litecoin project. Thus, the strategy of calling it a ‘scam’ would be to encourage the community to hate/dismiss it before it really begins to take root.
- Maybe Charlie Lee is truly confused on what does and does not constitute as a scam.
There are a lot of things that happen in the crypto world that we simply don’t like. Obviously, for most Litecoin supporters, the idea of another coin that they believe ‘co-ops’ the Litecoin name is infuriating for them. They believe in Litecoin and no other direct competitors.
However, there are no rules or laws that were broken here by the Litecoin Cash team. They explicitly stated that they weren’t affiliated with Charlie Lee and they made sure to inform everyone of that in multiple different locations and publications.
In addition, the Litecoin Cash team has taken the efforts to inform the general public that wants/wanted to become involved in the fork that they should empty their wallets before submitting the private key if they are interested in receiving the forked coins. The wallets should then be subsequently ‘destroyed’ or never in use again.
There do seem to be some legitimate upgrades that the team is proposing as well, such as recalculating the difficulty every block rather than every 2016 blocks. The move back to SHA256 is also pretty interesting as well.
What About the Premine?
There’s no rule against a premine. In fact, if we are to be fair, Charlie has been far from transparent in his Litecoin holdings.
Between the refusal to divulge how big of a stake he held in Litecoin at different times and the fact that he actively speculates on the coin itself as the creator of the coin using his own intuitive knowledge of what’s going on, are actions that seem to teeter on the edge of legitimate if we are to go by Charlie Lee’s strict condemnation of a ‘premine.’
Also, considering that the developers announced that this hard fork gives individuals the ability to receive ten times the quantity of Litecoins they held in their wallet at the time of the crash in Litecoin Cash redemptions, it seems that there is a sufficient opportunity for Litecoin “whales” and other heavy holders to receive more than their fair share. Ironically, Charlie Lee himself would have been included in that category had he not entirely divested himself of Litecoin in 2017 (a move that he’s still criticized for to this day).
Litecoin Cash isn’t a scam at this point in time. It has the right to create a hard fork of the Litecoin currency and even use the Litecoin Cash name. Given the fact that they claim the wallet addresses were designed in a way not to be confused with the original Litecoin protocol’s addresses, weakens the argument that they are merely trying to gain fame off of the Litecoin name.
Perhaps the irony of this situation is that, if Charlie Lee and others had never even bothered to mention Litecoin Cash in the first place, it probably would not have received much attention. The author doesn’t even believe that Charlie should’ve gone as far as to say the Litecoin team was not planning any fork. Unless the Litecoin Cash team had stated otherwise, this should’ve been implicitly obvious. It seems like this was the only fork that Charlie Lee spoke strongly against as well.
Thus, Litecoin Cash passes the test for now. If there is anything shady, shaky, or ‘scam-like’ about the coin, we’ll be sure to update you all as the readers immediately. At the time of writing, everyone is waiting for the wallet to be released.
IF the wallet is NOT released, then Charlie Lee and all others will be right in their claim that it is a scam (albeit for the wrong reasons). Let the waiting game begin.
After completion of this article, the wallet was released by the Litecoin Cash dev team in their Discord Chat at approximately 12:35 GMT:
Here is the actual GitHub image and link:
A miner in the chat that the author spoke with personally also posted this.
The author has not confirmed the veracity of the wallet or anything else for that matter, so please proceed with caution! The author would personally recommend waiting a bit of time to see the reaction of those in the community to the actual tech, wallet, and the exchanges that decide they will/will not adopt the coin before making any definitive moves on it.
Never make yourself the guinea pig when money/security is involved.
Source: Read Full Article
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