In an exclusive interview with CryptoSlate, the creator of the litecoin, Charlie Lee, talked about how bitcoin and lightcoin will challenge the state and revolutionize payments.
One of the most serious problems with bitcoin is the inability to scale. The maximum network capacity is 3-7 transactions per second. In periods of increased network load, the cost of one transaction can reach $ 5.
As a reference, critics often point to VISA. A leading payment processor processes an average of approximately 2,000 transactions per second (maximum, 56,000 transactions, theoretically).
The difficulty of scaling is the reason for the existence of many altcoins. Such projects, Bitcoin Cash, EOS and TRON can boast a higher transaction processing speed – at the cost of more centralization – solving the key problem of bitcoin.
Bitcoin works here and now.
Unlike other creators of altcoins, Charlie Lee has completely different views on the problem of scaling. He says:
“Now bitcoin and litecoin are working flawlessly, serving as a store of value. They are relatively easy to pay. They are relatively cheap compared to bank transfers, for example. ”
According to Lee, the main advantage of bitcoin is not that it is able to compete with such payment processors as VISA, but that it competes with banks and financial institutions. Lee says:
“Today, a bank transfer costs $ 20-35 and takes half a day. And in order to transfer money, a person is forced to make considerable efforts. In addition, the procedure is monitored. Theoretically, a transfer can even be canceled. ”
Lee is confident that over time, the Lightning Network and other second-tier solutions will solve the scalability problems that bitcoin faces at a basic level.
Other Bitcoin proponents believe that Bitcoin is not a competitor to VISA or PayPal.
“Bitcoin competes with governments, legal systems and property rights – the fundamental levels of the existing social structure – and not with payment processors that serve as an add-on on it,” writes the famous (anonymous) bitcoin theorist Hasu in his essay “Bitcoin and the promise independent property rights. ”
It seems that Lee agrees with him, saying that bitcoin already brings people practical benefits, replacing bank transfers. He notices:
“In the case of bitcoin, you have the opportunity to make a free irreversible transaction for $ 1, even if you want to send millions. This option is much better than a bank transfer. ”
Better than gold
One of the critics of Bitcoin, Peter Schiff, claims that gold is the best store of value, the history of which dates back thousands of years. According to the head of Euro Pacific Precious Metals, gold serves as a solution to the problems of inflation and inefficient monetary policy.
However, Lee believes that bitcoin and gold are “even impossible to compare.” The reasons become obvious if you look at these assets in detail. Verifying the authenticity of gold is an expensive process. Gold storage and trade require large centralized institutions. Authorities can easily confiscate gold. Bitcoin and lightcoin solve these fundamental problems. According to Lee, because of this, they have enormous growth potential. Lee notes:
“The gold market is worth almost $ 10 trillion. Thus, the market capitalization of gold is 30-50 times higher than that of bitcoin. This means that bitcoin has room to grow. And he already feels pretty good. ”
Fiat is not your money
Charlie Lee believes that the authorities tightly control the money:
“You cannot freely dispose of them, because the government does not allow you. Moving money is also difficult. ”
As an example, Lee talks about an episode that happened before the invention of bitcoin. In April 2011, the owners of the three largest poker game websites – PokerStars, Full Tilt Poker and Absolute Poker – were arrested. Authorities closed the sites, accusing their creators of money laundering and bank transfer fraud. According to Lee, the steps were probably lobbied by casinos in Las Vegas and other institutions, as poker on the Internet reduced their income.
However, no arrests led to the fact that the work of online casinos ceased, Lee added. People paid in these institutions in dollars, sending money through credit cards and bank transfers. Accordingly, US authorities denied customers access by blocking their payments. Lee says:
“Cash flows from banks to these poker sites were successfully stopped because the government considered the game illegal. And this story is another reminder that “your” money, in fact, does not belong to you. “
The authorities are not able to stop cryptocurrencies
Now, thanks to bitcoin, litecoin and other cryptocurrencies, the authorities of different countries can not stop the work of Internet services by limiting payments. Also, Lee cited Silk Road and other darknet trading platforms as an example – in his opinion, they serve as proof of the value of Bitcoin and its resistance to restriction attempts.
In other words, bitcoin and litecoin are widely used to buy drugs, money laundering and terrorist financing. Nevertheless, despite close supervision by the authorities of the most powerful world powers, these networks continue to operate successfully.
To emphasize strict supervision, US authorities sentenced Silk Road founder Ross Ulbricht to two life sentences, plus forty years, without the right to pardon. Cryptocurrencies allow you to circumvent control, since no one controls them and there is no one to blame. The blame for illegal activities at Silk Road lies with Ulbricht.
“I see cryptocurrency as the freedom of money. In comparison, the Internet, for example, is freedom of information. Cryptocurrency frees money, ”Lee believes.
Are cryptocurrencies a boon to society?
Financial regulations exist to prevent the financing of terrorism, money laundering and other activities detrimental to society. In this regard, the question is relevant whether cryptocurrencies undermine the foundations of society by depriving the power of a law enforcement tool.
Lee answers the question like this:
“Cryptocurrencies will definitely become a plus for society. I think money should be free. If you break the law, you should be stopped. But not at the cost of restricting the freedom of money. ”
Moreover, Lee believes that in certain respects, regulation goes beyond what is acceptable. Lee says:
“The ability to make decisions for others – especially in those areas where the choice does not affect others, for example, in drug use and online gambling – is the antithesis of individual choice and creates the basis for abuse by those in power. I believe that people should have the freedom to do with their bodies what they want – as long as it does not harm others. And freely manage your money. ”
Lee gives another analogy – with the Internet.
“Limiting the freedom of money is like information censorship,” he notes, “for example, the Chinese authorities are censoring information on the Web, not wanting their citizens to know what is happening. Living in an information vacuum, Chinese citizens are victims of propaganda and lies. It is unacceptable”.
The future of bitcoin
Bitcoin and litecoin give people a new way to interact and freedom from government control. According to Lee, in the future people will not even know that they use cryptocurrency to pay for goods and services. He says:
“In the future, people will use bitcoin and litecoin, without even understanding how it works. It will be enough for them to know that they transfer money, paying for goods and services. ”
According to Charlie Lee, cryptocurrency is a revolution, a way to fundamentally change the nature of money. Lee says:
“I consider cryptocurrencies as freedom of money … I dream of becoming an eyewitness to the revolution, thanks to which cryptocurrencies will become a reserve currency and everyone will start using it. This is the best kind of money in the history of mankind. ”