Journeys in Blockchain: Charlie Lee of the Litecoin Foundation – Cointelegraph Magazine

“It was kind of crazy to leave Google.”

Charlie Lee was a software program engineer for YouTube, which had change into a part of the world’s dominant expertise firm. He liked the start-up really feel. “You get to work on really cool, new stuff, except that it’s a start-up that’s guaranteed to succeed.” Anything Google launches, he explains, will get tens of millions of customers on day one.

The Google campus was only a five-minute drive from Lee’s house, and the corporate supplied an exceptional wage, top-notch advantages, and a hefty inventory incentive scheme to spherical out the compensation bundle.

But the probabilities of becoming a member of a younger crypto trade in San Francisco caught Lee’s curiosity. It was greater than an hour commute one-way, with a wage and advantages nowhere near matching what Google supplied. Despite this, Lee determined that after six years of working for the large firm, it was time to attempt one thing new.

“I decided to do it because I was excited about working on crypto full-time.”

Getting in on the high

While he has since gained some notoriety for promoting his Litecoin holdings on the peak of the 2017 crypto market frenzy, Lee had first-hand expertise of shopping for on the high. He caught the crypto bug when he encountered Bitcoin and its attribute volatility in 2011. Lee bought some Bitcoins on the then-peak value of $30 and labored at studying every thing he may about crypto. 

Soon after his preliminary funding, he watched the value plummet to simply two {dollars}, however he endured together with his newfound ardour. 

While working at Google, Lee spent a lot of his spare time on Bitcoin boards exploring crypto. Tinkering with the expertise, he helped develop an altcoin dubbed Fairbrix. The tech was primarily based on Tenebrix, a cryptocurrency which used the Scrypt algorithm for mining with a CPU. Powerful GPUs had rendered CPU mining of Bitcoin unprofitable, so Tenebrix grew to become a horny different for miners.

But Tenebrix had an all-too-familiar downside. Seven million cash have been pre-mined and held by its nameless creator, whose clarification for the pre-mine was that the cash would basically function a money-laundering instrument. 

“You would send him coins and then he would send you clean coins from those seven million clean coins. It was supposed to be a service to clean your coins, but who knows if that’s what’s going to happen. He basically had seven million coins he could just dump on the market and exit scam whenever he felt like it.”

The justification for the pre-mine is preserved for posterity on the Bitcointalk discussion board.

Lee pushed to relaunch Tenebrix with no pre-mine, calling the brand new answer Fairbrix. It was primarily based on a sophisticated fork with quite a few bugs and tons of points at launch, he says. “Fairbrix sputtered out of the gate and didn’t do well.”

Following the failure of Fairbrix, Lee determined to create one other coin, however to “do it the right way.” He branched off the confirmed Bitcoin codebase as an alternative, aspiring to maintain every thing as near Bitcoin as attainable.

The newly launched Litecoin modified a couple of parameters, enhancing performance and pace together with including in Scrypt mining.

It wasn’t clear that the brand new coin would succeed, Lee says, because it was only one amongst dozens of recent cash. But the “silver to Bitcoin’s gold” tagline resonated strongly with the group. The proven fact that it was CPU-mineable helped kickstart the community. Just about anybody may become involved with CPU mining, he says, which bolstered preliminary adoption.

When Bitcoin ASICs later emerged as the popular mining instrument for the dominant community, the timing was once more fortuitous for Litecoin, Lee says. Just as miners have been switching to utilizing ASICs for Bitcoin, “all the GPUs that were previously mining Bitcoin switched to Litecoin.” Thus, many former Bitcoin miners migrated over to the choice community. “It was in the right place at the right time.”

By 2013, Lee discovered himself absolutely immersed in crypto, shifting from what was as soon as merely an open-source ardour challenge to constructing options in a quickly rising trade. “So, I decided to try to figure out what I wanted to do in the crypto space.”

Lee wrote a letter to Coinbase asking if they’d assist the rising Litecoin community. The firm replied with an insistence that the main target would stay on Bitcoin in the intervening time, with attainable assist for Litecoin sooner or later. The dialog was fruitful nonetheless, as they expressed a necessity for engineers and shortly employed Lee.

And loopy as it might have been, Lee left Google for one thing… extra attention-grabbing.

Always on the transfer

Lee’s willingness to “go with the flow” appears to stem from occasions he skilled at a younger age. An unstable political scenario within the Ivory Coast compelled his dad and mom to ship Charlie, 13 years previous on the time, and his brother Bobby (now additionally an energetic member of the crypto group) to boarding faculty in America.

At the time he left, Lee was effectively forward of his classmates. In his first day of grade one arithmetic, his instructor despatched him to the second grade, deeming him too superior for first grade. He then spent at some point in second grade, after which the instructor despatched him on to 3rd grade. 

“I basically jumped two grades in math. So a really small first-grader was taking math class with third graders. It must have looked really weird.” By seventh grade, Lee had exhausted the out there curriculum.

Starting in New Jersey as an eighth grade pupil, Lee acknowledges, was “a big shock. My brother was there, so that helped a little bit, but still I was kinda by myself, separated from my parents.” 

During this era, Lee realized an excellent deal about controlling his personal funds. His dad and mom despatched him an allowance enabling him to get used to budgeting and monetary planning at a comparatively younger age. “As a thirteen year old, I learned to save for things in the future.”

He first realized concerning the worth of sound cash from his grandfather, who left China with gold bars sewn into his garments. “It was the only way he was able to take his wealth out of China to Hong Kong.” This understanding of cash enabled Lee to make a connection between gold and Bitcoin when he first encountered it.

It’s a pure development, Lee explains. Before crypto expertise’s inception, gold was the most effective type of cash. “It’s sound money. It’s inflation-proof. Governments can’t just create more gold out of thin air like they do with fiat.”

“With crypto, people call Bitcoin digital gold and Litecoin digital silver because of the fact that it’s very similar to gold and silver in terms of its monetary properties. But it’s better than gold and silver because it’s digital. There’s no or low cost for storage compared to gold and low cost for transport. It’s next to impossible to move a lot of gold cross-country. But with Bitcoin, Litecoin, and cryptocurrencies, you can.”

Dot.com is hiring

After finishing his research at MIT in laptop software program and electrical engineering, Lee graduated on the peak of the dot.com growth. He was a scorching commodity. “Companies were hiring like crazy back then… Offers were pretty incredible for college grads.”

Lee quickly determined to affix a startup, Kana, an organization pegged at a “crazy” valuation of $four billion, Lee says. “The offer was kind of incredible. If the stock price had stayed the same, the stock value that they gave would be worth a million dollars, a million and a half.” But a 12 months later, web firms have been plummeting. Many firms fell in worth by 90% or collapsed fully. “I got in at the top, so to speak,” Lee laughs.

Kana sputtered alongside after the crash whereas a lot of Lee’s colleagues began Guidewire, an automatic insurance coverage software program firm. Lee joined them for 3 years earlier than choosing Google.

Exploring Litecoin

Following his departure from Google and subsequent stint at Coinbase as Director of Engineering, Lee returned to exploring prospects with Litecoin. The enthusiastic group was delighted with the information. At first easing again on his hours at Coinbase, he ultimately shifted to focusing full-time on his brainchild, ultimately leaving the trade to dedicate himself to the activation of the controversial SegWit scaling answer. “There was a lot of FUD around SegWit. My theory is that it came from Jihan Wu and miners trying to block SegWit because it hurt their income.”

Many locally have been not sure of the expertise’s implementation, however Lee felt Litecoin was the right community for testing its efficacy and safety. 

“No one’s going to attack a testnet because even if you succeed you can’t make money from it. You need real value to test the game theory.” 

Lee realized that if they may activate SegWit efficiently on Litecoin, they may present the legitimacy of the scaling answer. “In reality, SegWit was actually very good technology that would help Bitcoin… with very little downside.”

It wasn’t simple, Lee says, however ultimately he satisfied Litecoin miners to activate SegWit in April of 2017, to nice success. He believes this innovation led to SegWit’s eventual implementation on Bitcoin. “It made it clear-cut that there was nothing wrong with it and they should just activate it.”

About promoting Litecoin on the peak…

The 2017 market peak put Lee in a no-win scenario. His Twitter follower depend had exploded through the market surge, and his tweets appeared to exert appreciable affect on the worth of Litecoin. 

Lee defined {that a} easy “announcement of an announcement” à la Justin Sun may trigger costs to spike. “I didn’t want to have incentives to do that, to just care about the price and pump the price.”

The battle of curiosity troubled Lee and he determined it could be greatest to divest himself of his holdings in Litecoin, a lot to the bitter disappointment (and vocal criticism) of the group, who questioned his dedication to the trigger and questioned if he contributed to the following value crash. He explains that he didn’t have quite a lot of cash to start with, actually not sufficient to crash the market, not like another creators who held on to pre-mined giant sums of their very own created cash. “I bought and mined the coins just like everyone else. The only difference is that I was early.” 

“There were thousands of people there at the beginning, probably thousands who owned more coins than I did. But being the creator and central figure of Litecoin, I figured not owning coins and still pushing for adoption, still working on it, was the better way of doing things.”

 

 

Lee admits that, in hindsight, the timing created dangerous optics. But, he factors out, he was already financially safe by this time in his profession. “I was early in Bitcoin so I was already very well off. Being relatively early at Google, Guidewire and also Bitcoin, it’s not like I needed the money.” Now, Lee says, he solely cares concerning the value of Litecoin as a result of he cares about its adoption.

Lee warned of the cyclical nature of the crypto market effectively earlier than his sell-off, he provides. Even earlier than promoting, he tweeted that the market was very risky and warned that costs may simply drop 90%. 

New individuals are available and purchase close to the highest throughout hype phases, Lee says, however they’re not prepared for the crashes. These similar individuals will promote when costs plummet. “They’ll be buying high and selling low, which is quite unfortunate. If I could help it, I’d rather the price not pump that much because the fall would be devastating for most people.”

It’s exhausting every time persons are essential towards Lee on social media, he admits, “I probably shouldn’t engage…” He figures the most effective factor to do is to place his head down and simply preserve engaged on Litecoin.

Why does privateness matter for those who’re not doing something dangerous?

Bitcoin, Lee says, is the most effective type of cash that people have ever seen. “It’s gold, but better than gold.” But one property of sound cash that Bitcoin is just not good at, he explains, is fungibility.

Lee explains fungibility and privateness are key priorities for cryptocurrency growth. For many, the problem of privateness appears irrelevant. Why, some would possibly ask, does privateness matter for those who’re not doing something unlawful? 

He presents an instance as an instance the issue:

Someone buys 20 bitcoins on an trade and withdraws the funds to a pockets. The subsequent time they use Bitcoin for one thing from that handle, the unique 20 Bitcoin enter stays seen. “You could see on a block explorer that I sent, whatever, 0.1 BTC to someone and it came from an input that has 20 Bitcoins. So the guy who received it saw that I have 20 Bitcoins. They can go back and look at my transactions and try to figure out exactly how many I have and it wouldn’t be too hard to figure out…” 

This lack of privateness is just not good for cash, he explains. “You want money to be fungible. You don’t want to give someone twenty dollars and for the merchant to know you have $100,000 in your bank account. Or that your paycheck was whatever amount.” Financial privateness is necessary, he says, “even if you’re not doing anything bad.”

More fungibility, Lee says, is at all times good for cash.

Lee is on a mission to make transactions extra personal with MimbleWimble. The expertise is just not excellent, he says, but it surely’s “good enough.” The key attribute, Lee says, is that it’s scalable, an necessary consideration for blockchains. 

MimbleWimble will probably be carried out on Litecoin utilizing extension blocks, like a sidechain that’s connected to the principle chain. Every block has an extension block that holds MimbleWimble transactions. Users can transfer cash between the 2 chains with every thing remaining personal on the sidechain. The funds can then be withdrawn again to the principle chain the place clear transactions happen.

Unlike SegWit, Lee is uncertain that MimbleWimble expertise will ever come to Bitcoin. Unless it really works completely on Litecoin and exhibits that it’s, certainly, the longer term. “I don’t think it will come to Bitcoin in that form, but we’ll see. It’s good to be able to experiment on it.”  

Lee plans to proceed engaged on Litecoin, however says he’ll ultimately step away when the time is true. Having him round is each good and dangerous for Litecoin, he says. Being a central affect for the reason for the Litecoin community, Lee can push to get issues accomplished extra simply and effectively than the extra decentralized Bitcoin growth group may ever do. But this additionally makes Litecoin extra weak.

“Let’s say the government wanted influence on Litecoin, they can put pressure on me. Or if I start doing something bad, I can really hurt Litecoin. Eventually, when Litecoin doesn’t need me anymore, when it’s more mature and decentralized, it will be best for me to step away, but until then I’ll do whatever I can to help it succeed.”

The king of crypto

Bitcoin continues to be the king of crypto, Lee insists:

“I try to help Bitcoin when I can.” 

The subsequent huge factor for Bitcoin? An ETF, Lee says. “You need to make it easy for anyone to have exposure to Bitcoin… There’s a lot of money out there that can’t get exposure to Bitcoin because there’s no easy way.” Lee figures it’s solely a matter of time. “Even the gold ETF took a while. It will take some time, but it will happen eventually… We just need more history and more, bigger exchanges you can trust.”

Even with the mass adoption of Bitcoin, Lee believes there’s nonetheless loads of house out there for Litecoin. It presents low cost, quick transactions, Lightning Network compatibility, and the flexibility to carry out atomic swaps between Litecoin and Bitcoin.

“In the future, I think people will use money without even knowing what the underlying technology is. Whether it’s the Bitcoin network, whether it’s Lightning, whether it’s Liquid, whether it’s the Litecoin network or anything else. In the end, that’s going to be abstracted away from the user. All they care about is sending value.”

 

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