‘I definitely think that what the internet did to information, cryptocurrency will do to currency’ – Charlie Lee
Having spent five years studying computer science at the Massachusetts Institute of Technology (MIT), Lee graduated in the first year of the new millennium. He eventually started trading in gold before moving into other commodities, as well as futures.
Seven years later, Lee was working for Google developing the likes of YouTube for mobile and the Play Games app, as well as the company’s next-generation operating system, Chrome OS.
During his time in Silicon Valley, in April 2011, Lee came across an article about the black market website, Silk Road, which led to his discovery of bitcoin. This was three years after the founding father of cryptocurrency, Satoshi Nakamoto, first unveiled his plans to revolutionise the world with an electronic payment system based on cryptographic proof instead of trust.
Charlie Lee’s CV
- 1990 – 1995: private boarding and day school in New Jersey, Lawrenceville School
- 1995 – 1999: BS in Computer Science at MIT
- 1999 – 2000: MEng in Computer Science at MIT
- 2000 – 2003: Software Engineer at Kana Communications
- July 2003 – July 2007: Senior Software Engineer at Guidewire
- September 2007 – July 2013: Software Engineer at Google
- July 2013 – July 2015: Engineering Manager at Coinbase
- July 2015 – June 2017: Director of Engineering at Coinbase
- June 2017: resigns from Coinbase to work on litecoin full time
‘When I designed the coin, I was trying to design a coin that was like silver compared to gold. So I made the confirmation times four times as fast and the total supply four times as much. That’s also why I decided to call it “lite” coin.’ – Charlie Lee
With a swathe of other cryptocurrencies having already spawned from Satoshi’s idea, Lee was determined to make his own version, one that had all of their benefits, but ‘nearly none’ of their problems.
Things moved quickly. Only months later, in September 2011, Lee took his first leap into the crypto-world with Fairbrix, a carbon copy of a coin that had surfaced earlier that year named Tenebrix. After seeing the creator make a mess of Tenebrix by mining seven million coins for himself before launching it, Lee was determined to create a level playing field by making a clone coin and launching it without any coins being mined beforehand. While Fairbrix lived up to its name, the venture collapsed after being besieged by technical issues.
Still, it would only be another few months before Lee struck gold, or silver in this case, with litecoin being launched at precisely 3am (London time) on Thursday 13 October 2011.
- only 150 litecoins were mined before launch, the genesis block and the first two blocks to confirm that the genesis is valid
- only 84 million litecoin will ever exist, quadruple bitcoin’s 21 million limit
- litecoin can be indentified on exchanges under the symbols LTC or XLT
- while bitcoin’s early days were marred by its use on Silk Road, litecoin was accepted on an alternative website named Atlantis
- founder Charlie Lee’s online identities include ‘Coblee’ and ‘@SatoshiLite’
- Lee has donated bitcoin and litecoin to WikiLeaks to demonstrate the ‘censorship resistance feature’ of both cryptocurrencies
Bitcoin and litecoin: ‘a good one-two cryptocurrency punch’ against fiat currencies
‘I comment on bitcoin, and try to help bitcoin, out of my own interest in seeing bitcoin succeed. This will help all coins. Being the creator of litecoin should not prevent me from being part of the bitcoin community, right?’ – Charlie Lee.
Lee demonstrated the extent of his obsession with cryptocurrencies, about two years after creating litecoin, by leaving Google and joining digital currency exchange Coinbase. He was only the third person hired at Coinbase, and the second engineer brought on board. While he took a pay cut, his view was that it was a ‘no-brainer’, as he got to work on cryptocurrency full time, and Google didn’t have any cryptocurrency projects on the go at the time.
But he wasn’t at Coinbase to work on or promote litecoin, in fact, Coinbase didn’t even list litecoin until years later. Lee was there to work on its big brother, bitcoin.
‘I’m committed to cryptocurrency. I’m into bitcoin as much as I’m into litecoin. I know that in order for cryptocurrency to succeed, bitcoin needs to be adopted by the masses first. And that’s why I’m focusing most of my time on bitcoin currently. When I feel my time is best spent on litecoin, I will do that’, Lee responded to online criticism about his commitment to litecoin at the time.
Development of litecoin was handed over to Warren Togami, who previously worked as Linux operating system software engineer at Red Hat Inc., and founded the Fedora project, a community building a free and open source software platform.
Another developer with 20 years of experience under his belt, Anton Yemelyanov, was also assisting. Both have an interest in bitcoin that matches Lee’s. Togami was already a bitcoin developer and Yemelyanov was the chief technology officer at the Bitcoin Embassy for two years, until August 2015.
Yin and yang
- litecoin is intended to compliment bitcoin. Lee’s vision sees bitcoin appealing to investors looking to store value, similar to gold, while litecoin would be used for payments and transactions
- litecoin does not compete with bitcoin for miners as it uses a different proof-of-work algorithm
- litecoin transactions are four times faster than bitcoin
- bitcoin developers and merchants can easily integrate to enable litecoin transactions
- both share the ‘chicken and the egg’ problem. Widespread adoption is necessary in order to encourage businesses to accept coins as a form of payment. But widespread adoption will be held back until it is widely accepted by businesses
What Lee learnt at Coinbase could only be to litecoin’s benefit, and helping bitcoin succeed could only be in the favour of his ‘lite’ version. Down the line, in the summer of 2016, Lee went part time at Coinbase before eventually leaving in June 2017, two months after Coinbase added litecoin to its exchange. He felt it was the right time to make litecoin his primary project, but he couldn’t take it to the next level alone.
‘Sadly, I cannot not be the face of litecoin, unless I disappear like Satoshi. I’m all you’ve got dude.’ – Charlie Lee
There is one more fundamental difference between litecoin and bitcoin, and one that has been more significant than what many would think. The reasoning behind Satosi Nakamoto’s decision to remain anonymous couldn’t be better demonstrated by anyone other than Lee. He is at the centre of a decentralised currency – litecoin has a founder with a face.
Lee and the team seemed to initially take control of litecoin’s future by outlining a roadmap (a decision he later regretted, and described as ‘stupid’) and releasing updates, much like any public listed company would. Yes, he was the founder, but he soon realised he couldn’t be responsible for everyone’s money. Lee was learning there wasn’t a book on how to manage cryptocurrencies, nor were there any past experiences he could rely on.
The nature of cryptocurrencies pushes ‘official’ channels of communications into Twitter, Reddit and other online forums, where Lee has made it clear that litecoin is not a company, and he is not a CEO. If any decentralised cryptocurrency is going to succeed, Lee argues, then it’s the responsibility of everyone involved – ‘litecoin is what we make of it. Being the founder, I have more influence, but I don’t get to dictate things.’
‘I’ve said this before and I will say it again. Ask not what litecoin can do for you. Ask what you can do for litecoin. Go forth and make it happen. This is a decentralised currency. You don’t get to sit back and enjoy the profits from other people’s hard work’ – Charlie Lee
While independent of litecoin itself, there is the Litecoin Foundation, where Lee is managing director. The ‘non-profit’ organisation aims to help push the adoption of litecoin, and represents the primary group of developers and those spreading the word in the hope more payment providers and merchants will start accepting litecoin.
Alongside Charlie Lee on the board of directors is Xinxi Wang and Franklyn Richards. Keith Young is the operations director, and the only sponsored full-time developer is Adrian Gallagher, also known as ‘thrasher’. Part-time developer, ‘Loshan T’, and 12 other volunteers complete the team helping to develop litecoin. There is also the Litecoin Core team which, although slightly different, works closely with the foundation.
‘There will always be a doubt on whether any of my actions were to further my own personal wealth above the success of litecoin, and cryptocurrency in general’ – Charlie Lee.
Lee has been honest with those who have purchased litecoin and looked to him for guidance. He was the first to tell prospective buyers that it was ‘risky’, has backed other coins and networks outside of bitcoin (like ethereum, which has a ‘ton of potential’), and stressed to the ‘get rich quick’ investors that stability is a much better trend to follow than the volatility experienced by most coins in the market, even if volatility presents opportunity. While Lee has been happy to tell the buyers that have criticised his ‘leadership’, or the inability to make a quick buck to sell their litecoin, the discord between the litecoin team and the wider market was becoming a bigger and bigger problem.
In December 2017, Lee made a decision that will mark a milestone in litecoin’s history. He sold off and donated his entire litecoin holding to demonstrate he is dedicated to making litecoin and cryptocurrency succeed.
Fed up with being accused of personally benefiting from releasing news, both good and bad, on the likes of Twitter, Lee didn’t hold a single litecoin (apart from some physical coins kept as collectibles) for the first time in six years.
‘This is definitely a weird feeling, but also somehow refreshing. Don’t worry. I’m not quitting litecoin. I will still spend all my time working on litecoin. When litecoin succeeds, I will still be rewarded in lots of different ways, just not directly via ownership of coins. I now believe this is the best way for me to continue to oversee litecoin’s growth.’ – Charlie Lee
Lee didn’t reveal how many coins he sold or at what price, but the sale was only a ‘small percentage’ of the daily volume and it ‘did not crash the market’.
While some lost trust in litecoin and followed Lee in selling their litecoin, he said this made him even more convinced it was the right move. ‘It was too centralised on and dependent on me’, he wrote.
However, he hopes to follow Satoshi Nakamoto into the shadows one day, or at least take a step back. He wrote, if litecoin was to succeed, then he would need to ‘step away’. But he vowed not to do this until he had helped litecoin climb past an all-time high. A popular phrase in reference to where litecoin is heading within the community is, ‘to the moon!’ No prizes for guessing who coined that phrase.
‘Litecoin has been very good for me financially, so I am well-off enough that I no longer need to tie my financial success to litecoin’s success.’ – Charlie Lee.