I know there are a lot of threads for this already, but I wanted to start a new one as I felt the past ones did not give thorough reasons, and were somewhat trollish in nature. I have been a hardcore Litecoin supporter for the past couple years, and I do not think it is going away anytime soon. I am trying to think more long term than that, and Litecoin seems poised to die a slow death if it continues down the same path. The onslaught of copy and paste coins, followed by the onslaught of innovative coins, has changed the way I think about Litecoin. I can no longer recommend it as a good investment at this point in time. I have lobbied for Litecoin harder than even Bitcoin, and my decision to no longer support Litecoin was not an easy one. This post will be brushed aside as FUD or as me being a “hater”, but I hope you read what I have to say and think about the points I bring up, I assure you I have thought long and hard about them.
I feel like the argument that “Litecoin has the best development team” is quite disrespectful to the many other talented and devoted developers of other alt coins. You might as well call them all idiots. In fact, there are many developers that are going above and beyond what the Litecoin developers are doing. Litecoin has decided that it is content to simply follow in the steps of Bitcoin, something I tried hard to lobby against. Litecoin is merely developing things that Bitcoin has already made, such as Electrum and Android wallets. I will give them (well… Warren) a bit of credit for improving some security issues on both Litecoin and Bitcoin, but they do not see the glaring issue in that the end users don’t actually ever see these improvements. Nor do they particularly care… what I mean by that is… Have any of you ever had a problem because of a security issue in the Litecoin/Bitcoin client? I would be surprised to hear one person tell me yes they have, as after using it for years I haven’t and most cases that pop up seem to be user error.
Crypto currency users/investors want new and improved features, this is something they can actually see and use, and that adds value to the currency in their mind. I think merely following in Bitcoin’s footsteps is possibly a path to becoming obsolete. We already have Bitcoin, we don’t need another currency that is almost exactly like it except for a few changed parameters. By staying three steps behind Bitcoin in the crypto currency wars, they are positioning themselves to be obsolete if Bitcoin is ever supplanted by a new crypto currency that is much better. I made a hard push to get Litecoiners behind the idea of implementing new decentralized features, such as asset exchanges and decentralized applications, and I was completely ignored by the developers and dismissed by most of the Litecoin faithful. This is how the “best development team” operates? Completely ignoring their user base and someone that has gone out of his way to support Litecoin time and time again? You would think there is no value in the ideas of creating Dcorps/Dapps the way I was dismissed, but as you can see with the money flowing in on projects like BitsharesAGS/Swarm/Etcetera, a large portion of the crypto currency community agrees with me.
This is not the only case where the developers have done as they pleased, many voiced concerns about ASICs coming online and ruining the decentralized nature of the network, making people pay for hardware that will never ROI and sadly has little to no resale value, and suscept the Litecoin mining community to pre-ordering hardware they may never even see (or at least they likely will never see on time before the difficulty skyrockets like what happened with Bitcoin.) After a year and a half of investing in ASIC mining technology, running group buys, and hosting hardware, I can honestly say it is a fool’s game. The original batch 1 Avalons broke even and made a hefty profit, and almost every ASIC offering since then has fallen short of simply allowing their customers to break even. I will no longer support ASIC mining or the companies that make them, and when that sentiment is shared by a large group of people (I know I’m not alone,) it can be a very dangerous thing and lead to centralization of the network. I am worried for both Bitcoin and Litecoin in those regards… when a crypto currency becomes centralized, what is the point really? Satoshi would not approve.
Litecoin’s trade volume and market cap dwarf those of other alternative crypo currencies. Although this is true, I feel like this is very dangerous reasoning for determining the future of a cryptocoin and should not be a large factor of your decision. Have you ever heard of the banks that are “too big to fail”? This is the kind of reasoning this reminds me of. Does anyone remember when Facebook came out of nowhere and made Myspace obsolete? Blockbuster got killed by Netflix and Redbox. Dell, once a leader in the IT sector has fallen behind its competitors. Kodak’s stock price is about 96% lower than it was in 1997 due to the advent of personal printers, improvements in software, and file sharing. Microsoft was at the forefront of technology at one point, and now they are playing catch up when it comes to search engines, internet video, ebooks, smartphones, and tablet PCs. Motorola was huge when mobile telephones first came out, yet they failed to focus on smartphones with new features and rapidly lost market share to companies like Apple, LG, and Samsung. Sears got huge by sending out catalogs and allowing customers to order things from home, but failed to capitalize when ecommerce became much more popular to consumers. A Sony Walkman used to be today’s iPod. Yahoo… Toys R Us… need I say more?
Due to rapid technological advancements and the competition being innovative and forward thinking (seeing a pattern here?), companies can become obsolete very fast and I see no reason why this does not (or could not) hold true with crypto currencies. The network effect is very powerful, however I feel like the network effect is exponentially more powerful for Bitcoin than it is for Litecoin. It is Bitcoin that is in the news all day every day, not Litecoin. Although Litecoin does get more attention than most other alternative crypto currencies, I feel this is because they are the guys to beat right now. As you can see in the last paragraph, this could change quickly and this is not a good argument for Litecoin holding its number two spot.
Although Litecoin may be accepted by more exchanges and merchants than other alternative crypto currencies, the more innovative and valuable ones are sure to follow. Multi coin payment processing is going to become more popular as more coins come out. Having a different payment processor for every crypto currency is just not a smart way of doing things, and the ones that only accept one or two crypto currencies will be less popular with merchants over time. If someone wants to buy something from me with Sex Coin, I am going to want their business as I can simply exchange the Sex Coin for whatever coin I would like. If the consumers have more options to pay, the more likely they are to purchase something. I am sure that I sold a few extra physical Litecoins because I used coinpayments.net which accepts something like 30+ crypto coins. I had it setup to automatically exchange the coins that I didn’t want. It was stupidly easy and got me a little extra business. What merchant wouldn’t want this? They will choose the payment processor that supports the most coins, and the most stubborn payment processors will be slowly phased out. Exchanges make money by people trading crypto currencies (duh, right?). There is no reason they will not keep adding coins to trade alongside other coins to increase their profit. By not adding new coins, whether it’s a scam coin or not, they are leaving money off the table and it makes no sense.
The Litecoin is silver to Bitcoin’s goal is simply a marketing slogan, nothing more nothing less. You could just as easily say Xcoin is silver to Bitcoin’s gold, and it wouldn’t be an incorrect statement. This thinking is similar to the “Litecoin is too big to fail” dogma, as we’ve seen with many of the technology giants that have been surpassed by innovative and forward thinking competition, this could change very quickly. I don’t look at Litecoin having ATMs as being a huge deal, as most people are looking to install Bitcoin ATMs. For Litecoin to compete with Bitcoin in the ATM space, they need to hope that Bitcoin ATMs are made to support Litecoin. If Bitcoin ATMs can be made to support Litecoin (and duh they can), then there is nothing stopping them from supporting other crypto currencies.
Yes Litecoin’s network speed dwarfs that of other Scrypt coins, and it is likely much more secure than those. However, I think it is silly to focus on only Scrypt coins. There are other innovative and valuable alternative crypto currencies that are not Scrypt-based. Some of the newer & most popular ones you can’t even mine them at all (like PoS coins). Making that a reason to be better than another ALT coin that does not have mining is like Mike Tyson fighting a baby. You can’t mine those coins, so how is Litecoin being the most secure Scrypt coin a good selling point? Maybe it is a good selling point versus all other Scrypt coins, however most of those are crap and everyone knows it.
Litecoin is not a back up to Bitcoin. If a huge flaw is found in Bitcoin and someone attacks it, Litecoin is likely to share that flaw. I always thought Litecoin would be a good backup if Bitcoin somehow was flawed because of it using a different algorithm. After learning more about this, I do not feel that is the case anymore. The encryption algorithm is the least likely place that a huge vulnerability will found. Cryptography is studied in academia much more so than Bitcoin’s source code, and the best and brightest are studying it... cryptography is no walk in the park. Short of quantum computing, which is unfeasible in the next 30 to 40 years, the encryption algorithm will not be the weak link. Furthermore, since Litecoin feels so apt to follow in Bitcoin’s steps, a huge percentage of the code base is shared by the two. If one goes down, the other is likely to follow. You may say… well if Bitcoin dies then all crypto currencies are doomed, but I am not so sure that is the case. Where other companies have failed, others have gone on to innovate and change the industry forever, even becoming bigger and better than their predecessors. Crypto currencies will certainly take a hit if Bitcoin dies, however it will not be the end of this movement I am certain of that.
As to the Litecoin Association being a good reason to support Litecoin… are you kidding me? Have you seen all the drama and mess the Bitcoin Foundation has had going on... I’m sure everyone has. I would venture to say that at this point the Bitcoin Foundation is hurting Bitcoin more than it is supporting it. When people form centralized foundations for decentralized technologies, it goes against the original spirit of decentralization and crypto currencies for which Satoshi set precedent for. As to Litecoin having a better community than any other alternative crypto currency, I beg to differ. I never felt welcomed, and was often chastized for my opinions. Although Coblee was very nice when I met him at the Bitcoin 2013 conference, he literally ignored me after that. Even when I was pleading to the developers to comment on adding new features to Litecoin. Honestly, before Litecoin jumped up in price in November/December 2012, Coblee was nowhere to be seen in the Litecoin community. Once the price started to rise he suddenly showed up and started making an effort. I have no problem with that, but I couldn’t help but notice the coincidence. Anytime I tried to bring up controversial opinions or suggestions I was met with opposition mostly from early adopters. Furthermore, I feel like the Litecoin community is a big “click” and the really early adopters are much more likely to support each other on controversial matters than new users, and this is alarming considering Coblee is in this group.
Faster block times are no longer a good selling point, as there are other coins with faster block times that don’t have a huge problem with stales etcetera. Anywhere in between a minute and two and a half minute block time does not suffer from the things that Litecoin says will happen if they go any faster, at least not to the point where it is a huge problem. Everyone knows by now that Litecoin confirmations are less secure than Bitcoin confirmations. Furthermore, many Bitcoin payment processors process payments without any or as little as 1 confirmation, making some Bitcoin payments instant. I don’t see this as good as a feature I had originally thought, as many coins have come out that were faster and didn’t completely fail. Along this same line of thinking, the statement that Litecoin had a fair release… how is that even a feature? That is just default common sense for any developer developing a crypto currency if they want it to succeed. Not having a fair release is a sure way to death, as was learned with the alternative crypto currencies that came before Litecoin. Since Litecoin was released, I feel like there were numerous even more fair releases than Litecoin. So again, this argument lost its appeal to me.
For those of you that think this may be FUD, I can tell you I currently do not have a balance above zero in any crypto currencies, and this is my non biased opinion of Litecoin and why I have stopped supporting it. Again, I must stress it was a hard decision as I have been supporting it for so long, and even got some of my friends and family invested. I am starting to regret that now, I am going to have to point them to this paper as I would feel horrible if they are left holding the bag. I can only really suggest Bitcoin at this point, anything else is really risky and it’s too early to tell who will rise to the top. I suggest putting a small percentage of your coins into projects you find interesting or innovative. It is going to take something truly innovative to supplant Bitcoin, and by coincidence Litecoin as well since they are content blindly following Bitcoin. I have a feeling this day will come sooner than we all think.
Hm, it is getting boring to me to hear the Litecoin faithful repeat the same mantras over and over, which I have refuted in detail, but none of them seem to be able to come up with a good retort. So, I will summarize here for those that may not have been following the thread. I may repeat some things I've already said, but that's just because no one has come up with a good answer for them yet. There are more half truths that they are spreading, but these seem to be the most common.
Myth #1: Trolls have called Litecoin dead before, but it hasn't happened yet, so that means it is not happening right now.
Logic Re: Myth #1: Most of the "Litecoin is dead" threads they refer to to make this point were from one to two years ago. I do agree that Litecoin was an easy choice back then to be the #2 crypto and was unlikely to die for obvious reasons. I myself defended back then. However, the dynamics of the free market have changed greatly since then. There wasn't really a good alternative to Litecoin or Bitcoin back then. Since then there have been numerous cryptos that have quicker block times, more features, more innovative proof of work protocol or alternatives, just as big of communities, and more developers. In an industry that moves as fast as cryptos are moving, you can't hold onto tired old mantras such as this when the dynamics have changed vastly. Due to rapid technological advancements, and the competition being innovative and forward thinking, companies can become obsolete very fast and I see no reason why this does not hold true with crypto currencies. When it comes to Myth #1, Litecoiners are living in the past. By the way, Smoothie hasn't figured this out yet and I guess there are probably others too, so I will explain it. The title of this thread is poking fun at the other "Litecoin is dead" threads and is a satirical hook. I thought it was a pretty catchy title myself, but maybe that's just me.
Myth #2: The Network Effect... cause just because.... The Network Effect.
Logic Re: Myth #2: I have already covered the network effect extensively in this thread and no one from the Litecoin camp seems to be able to come up with a good retort. The network effect is very powerful, however the network effect is exponentially more powerful for Bitcoin than it is for Litecoin. It is Bitcoin that is in the news all day every day, not Litecoin. Litecoin does get more attention than most other alternative crypto currencies, as they should because they are the guys to beat right now. This could change quickly, and if you read my examples of innovative companies completely killing less innovative companies, you will understand what I mean. I agree Litecoin has it's own network effect, however it is not nearly as strong as Bitcoin's network effect. Search Bitcoin in Google news and tell me how many articles pop up, then do the same for Litecoin, there will be many less articles about Litecoin. Litecoin has a small network effect that is somewhat limited within people engaged in the crypto currency community, however Bitcoin's network effect stretches much wider than that. Since Litecoin's network effect is limited somewhat to people engaged in the community, they are more likely to look at Litecoin for what it is.. Bitcoin with a few changed parameters. When it comes to Myth #2, Litecoiners are in denial.
Myth #3: Innovation does not translate into acceptance or success.
Logic Re: Myth #3: Sure, innovation doesn't equal acceptance or success on its own merits, however it certainly helps. The more innovative coins that have been released in the past year are sitting on top end of the crypto market cap list, and the cryptos that didn't are sitting at the bottom. According to Litecoiners this is purely coincidence... Furthermore, acceptance and therefore success will come for the most innovative cryptos as it is easier to determine who the leader of the pack is. Right now it is a hard decision as to what cryptocoin 2.0 protocol has the best chance for success, so payment processors and exchanges are hesitant to add them to their services (although the most forward thinking ones have already done so.) Over time this will work itself out. In the Field Of Dreams the saying goes, "if you build it they will come". I like this line of thinking when it comes to cryptos. Although they might not be widely adopted right when they come out, I believe that eventually (if there is added substance and value on top of Bitcoin/Litecoin) it is only a matter of time before the crypto community comes. (wow.. that totally didn't sound right..
).
Myth #4: Litecoin is accepted at more merchants than other alternative currencies (as to a reason for it still being a good long term investment).
Logic Re: Myth #4: Sometimes cryptos (Litecoin or Bitcoin) are being used to transfer money and make purchases, however most users are still using them as a speculative vehicle to make money. If you really think that Litecoin is being used everywhere for ecommerce, then I have a bridge to sell you. When I had a physical crypto business I offered two ways to pay, through Paypal and through Coinpayments.net. I would venture to guesstimate that 95% of the orders were made using Paypal. The answer as to why is obvious, since cryptos have been going up in value so much over the past couple years, no one wants to spend their cryptos and would much rather use FIAT. This was only about 6 months ago, and I can guarantee you it has not changed much since then. Furthermore, the popularity of multi-coin payment processors are going to accelerate the adoption of newer innovative cryptos. As merchants demand more payment options for the convenience of their customers to receive more business, payment processors will adopt the most popular and valuable cryptos (which I am speculating will be the most innovative ones).
