{"id":5862,"date":"2020-07-23T12:51:35","date_gmt":"2020-07-23T16:51:35","guid":{"rendered":"https:\/\/cointelegraph.com\/magazine\/?p=5862"},"modified":"2020-07-23T12:51:35","modified_gmt":"2020-07-23T16:51:35","slug":"journeys-in-blockchain-charlie-lee-litecoin-foundation","status":"publish","type":"post","link":"https:\/\/cointelegraph.com\/magazine\/2020\/07\/23\/journeys-in-blockchain-charlie-lee-litecoin-foundation","title":{"rendered":"Journeys in Blockchain: Charlie Lee of the Litecoin Foundation"},"content":{"rendered":"

\u201cIt was kind of crazy to leave Google.\u201d<\/strong><\/p>\n

Charlie Lee was a software engineer for YouTube, which had become part of the world\u2019s dominant technology company. He loved the start-up feel. \u201cYou get to work on really cool, new stuff, except that it\u2019s a start-up that\u2019s guaranteed to succeed.\u201d Anything Google launches, he explains, gets millions of users on day one.<\/span><\/p>\n

The Google campus was just a five-minute drive from Lee\u2019s home, and the company offered a phenomenal salary, top-notch benefits, and a hefty stock incentive scheme to round out the compensation package.<\/span><\/p>\n

But the possibilities of joining a young crypto exchange in San Francisco caught Lee\u2019s interest. It was more than an hour commute one-way, with a salary and benefits nowhere close to matching what Google offered. Despite this, Lee decided that after six years of working for the massive company, it was time to try something new.<\/span><\/p>\n

\u201cI decided to do it because I was excited about working on crypto full-time.\u201d<\/span><\/p>\n

Getting in at the top<\/span><\/h4>\n

While he has since gained some notoriety for selling his Litecoin holdings at the peak of the 2017 crypto market frenzy, Lee had first-hand experience of buying at the top. He caught the crypto bug when he encountered Bitcoin and its characteristic volatility in 2011. Lee purchased some Bitcoins at the then-peak price of $30 and worked at learning everything he could about crypto.\u00a0<\/span><\/p>\n

Soon after his initial investment, he watched the price plummet to just two dollars, but he persisted with his newfound passion.\u00a0<\/span><\/p>\n

While working at Google, Lee spent much of his spare time on Bitcoin forums exploring crypto. Tinkering with the technology, he helped develop an altcoin dubbed Fairbrix. The tech was 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 became an attractive alternative for miners.<\/span><\/p>\n

But Tenebrix had an all-too-familiar problem. Seven million coins were pre-mined and held by its anonymous creator, whose explanation for the pre-mine was that the coins would essentially serve as a money-laundering tool.\u00a0<\/span><\/p>\n

\u201cYou 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\u2019s what\u2019s going to happen. He basically had seven million coins he could just dump on the market and exit scam whenever he felt like it.\u201d<\/span><\/p>\n

The justification for the pre-mine is <\/span>preserved for posterity<\/span><\/a> on the Bitcointalk forum.<\/span><\/p>\n

Lee pushed to relaunch Tenebrix with no pre-mine, calling the new solution Fairbrix. It was based on a complicated fork with numerous bugs and tons of issues at launch, he says. \u201cFairbrix sputtered out of the gate and didn\u2019t do well.\u201d<\/span><\/p>\n

Following the failure of Fairbrix, Lee decided to create another coin, but to \u201cdo it the right way.\u201d He branched off the proven Bitcoin codebase instead, aspiring to keep everything as close to Bitcoin as possible.<\/span><\/p>\n

The newly launched Litecoin changed a few parameters, improving functionality and speed along with adding in Scrypt mining.<\/span><\/p>\n

It wasn\u2019t clear that the new coin would succeed, Lee says, as it was just one among dozens of new coins. But the \u201csilver to Bitcoin\u2019s gold\u201d tagline resonated strongly with the community. The fact that it was CPU-mineable helped kickstart the network. Just about anyone could get involved with CPU mining, he says, which bolstered initial adoption.<\/span><\/p>\n

When Bitcoin ASICs later emerged as the preferred mining tool for the dominant network, the timing was again fortuitous for Litecoin, Lee says. Just as miners were switching to using ASICs for Bitcoin, \u201call the GPUs that were previously mining Bitcoin switched to Litecoin.\u201d Thus, many former Bitcoin miners migrated over to the alternative network. \u201cIt was in the right place at the right time.\u201d<\/span><\/p>\n

By 2013, Lee found himself fully immersed in crypto, shifting from what was once merely an open-source passion project to building solutions in a rapidly growing industry. \u201cSo, I decided to try to figure out what I wanted to do in the crypto space.\u201d<\/span><\/p>\n

Lee wrote a letter to Coinbase asking if they would support the growing Litecoin network. The company replied with an insistence that the focus would remain on Bitcoin for the time being, with possible support for Litecoin in the future. The conversation was fruitful nonetheless, as they expressed a need for engineers and soon hired Lee.<\/span><\/p>\n

And crazy as it may have been, Lee left Google for something\u2026 more interesting.<\/span><\/p>\n

Always on the move<\/span><\/h4>\n

Lee\u2019s willingness to \u201cgo with the flow\u201d seems to stem from events he experienced at a young age. An unstable political situation in the Ivory Coast compelled his parents to send Charlie, thirteen years old at the time, and his brother Bobby (now also an active member of the crypto community) to boarding school in America.<\/span><\/p>\n

At the time he left, Lee was well ahead of his classmates. In his first day of grade one mathematics, his teacher sent him to the second grade, deeming him too advanced for first grade. He then spent one day in second grade, after which the teacher sent him on to third grade.\u00a0<\/span><\/p>\n

\u201cI 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.\u201d By seventh grade, Lee had exhausted the available curriculum.<\/span><\/p>\n

Starting in New Jersey as an eighth grade student, Lee acknowledges, was \u201ca big shock. My brother was there, so that helped a little bit, but still I was kinda by myself, separated from my parents.\u201d\u00a0<\/span><\/p>\n

During this period, Lee learned a great deal about controlling his own finances. His parents sent him an allowance enabling him to get used to budgeting and financial planning at a relatively young age. \u201cAs a thirteen year old, I learned to save for things in the future.\u201d<\/span><\/p>\n

He first learned about the value of sound money from his grandfather, who left China with gold bars sewn into his clothes. \u201cIt was the only way he was able to take his wealth out of China to Hong Kong.\u201d This understanding of money enabled Lee to make a connection between gold and Bitcoin when he first encountered it.<\/span><\/p>\n

It\u2019s a natural progression, Lee explains. Before crypto technology\u2019s inception, gold was the best form of money. \u201cIt\u2019s sound money. It\u2019s inflation-proof. Governments can\u2019t just create more gold out of thin air like they do with fiat.\u201d<\/span><\/p>\n

\u201cWith crypto, people call Bitcoin digital gold and Litecoin digital silver because of the fact that it\u2019s very similar to gold and silver in terms of its monetary properties. But it\u2019s better than gold and silver because it\u2019s digital. There\u2019s no or low cost for storage compared to gold and low cost for transport. It\u2019s next to impossible to move a lot of gold cross-country. But with Bitcoin, Litecoin, and cryptocurrencies, you can.\u201d<\/span><\/p>\n

Dot.com is hiring<\/span><\/h4>\n

After completing his studies at MIT in computer software and electrical engineering, Lee graduated at the peak of the dot.com boom. He was a hot commodity. \u201cCompanies were hiring like crazy back then\u2026 Offers were pretty incredible for college grads.\u201d<\/span><\/p>\n

Lee soon decided to join a startup, Kana, a company pegged at a \u201ccrazy\u201d valuation of $4 billion, Lee says. \u201cThe 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.\u201d But a year later, internet companies were plummeting. Many companies fell in value by 90% or collapsed entirely. \u201cI got in at the top, so to speak,\u201d Lee laughs.<\/span><\/p>\n

Kana sputtered along after the crash while a number of Lee\u2019s colleagues started Guidewire, an automated insurance software company. Lee joined them for three years before opting for Google.<\/span><\/p>\n

Exploring Litecoin<\/span><\/h4>\n

Following his departure from Google and subsequent stint at Coinbase as Director of Engineering, Lee returned to exploring possibilities with Litecoin. The enthusiastic community was delighted with the news. At first easing back on his hours at Coinbase, he eventually shifted to focusing full-time on his brainchild, eventually leaving the exchange to dedicate himself to the activation of the controversial SegWit scaling solution. \u201cThere 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.\u201d<\/span><\/p>\n

Many in the community were unsure of the technology\u2019s implementation, but Lee felt Litecoin was the perfect network for testing its efficacy and security.\u00a0<\/span><\/p>\n

\u201cNo one\u2019s going to attack a testnet because even if you succeed you can\u2019t make money from it. You need real value to test the game theory.\u201d\u00a0<\/span><\/i><\/p><\/blockquote>\n

Lee realized that if they could activate SegWit successfully on Litecoin, they could show the legitimacy of the scaling solution. \u201cIn reality, SegWit was actually very good technology that would help Bitcoin… with very little downside.\u201d<\/span><\/p>\n

It wasn\u2019t easy, Lee says, but eventually he convinced Litecoin miners to activate SegWit in April of 2017, to great success. He believes this innovation led to SegWit\u2019s eventual implementation on Bitcoin. \u201cIt made it clear-cut that there was nothing wrong with it and they should just activate it.\u201d<\/span><\/p>\n

About selling Litecoin at the peak…<\/span><\/h4>\n

The 2017 market peak put Lee in a no-win situation. His Twitter follower count had exploded during the market surge, and his tweets appeared to exert considerable influence on the value of Litecoin.\u00a0<\/span><\/p>\n

Lee explained that a simple \u201cannouncement of an announcement\u201d <\/span>\u00e0 la<\/span><\/i> Justin Sun could cause prices to spike. \u201cI didn\u2019t want to have incentives to do that, to just care about the price and pump the price.\u201d<\/span><\/p>\n

The conflict of interest troubled Lee and he decided it would be best to divest himself of his holdings in Litecoin, much to the bitter disappointment (and vocal criticism) of the community, who questioned his commitment to the cause and wondered if he contributed to the subsequent price crash. He explains that he did not have a lot of coins to begin with, certainly not enough to crash the market, unlike some other creators who held on to pre-mined large sums of their own created coins. \u201cI bought and mined the coins just like everyone else. The only difference is that I was early.\u201d\u00a0<\/span><\/p>\n

\u201cThere 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.\u201d<\/span><\/p><\/blockquote>\n

 <\/p>\n