 I think being boring is good for money and you want it to be stable and you want it to actually work. And Litecoin has worked flawlessly over the past nine years. It takes forever to get anything kind of implemented on Bitcoin because consensus is slow. With Litecoin, if we want to do something, we can move pretty fast on it. What's up YouTube? I'm your host Giovanni, and I have the pleasure to be joined today by Charlie Lee, creator of Litecoin. Thanks for joining us, Charlie. Thanks for having me. In a previous interview, you defined Litecoin as boring compared to other coins. Why do you think so? And do you see it as a plus or a minus? I think it's boring because people think it's boring because it's kind of very similar to Bitcoin. We don't do anything like crazy and anything very risky because I think we want to keep it like money, right? It should be stable. It should be conservative. So because of that, people think it's boring. I think the bad part about that is it's hard for us to attract developers because while we didn't want to work on Litecoin, they can work on Bitcoin or some other like more fancy coin that is doing crazy stuff. But the good thing is, I think being boring is good for money, right? Just like Bitcoin is conservative. You don't want money to be taking risks, right? I don't think it's good to kind of take the approach of build fast and break things with money when you want it to be stable and you want to actually work. And Litecoin has worked flawlessly over the past nine years, so that's good. During our last interview almost a year ago, you said that fungibility and privacy were the main features that you wanted to improve in Litecoin and also that you would like to see as improved in Bitcoin. What achievements in this direction have been reached since then? Yeah, so I did mention that I think fungibility and privacy is one of the main feature of good money that's missing in Bitcoin and Litecoin. And that's something I'm focused on right now. So what we're doing right now is we're working on adding Mimbo-Wimbo to Litecoin with extension blocks. And this is something we've been working on since late last year. It's been going well. We're targeting end of the summer for a test at launch. And if that goes well, then we'll launch it soon after that and get it activated and deployed on Litecoin. You said that it will involve some risks related to the possibility of hidden inflation. Can you explain exactly what these risks are? Yeah, so with the current way Bitcoin and Litecoin works, everything, the ledger is transparent. It's open for public to see. So you can see exactly how many coins exist, how many coins are mined every time a new block is created. So from that, you can see that Bitcoin will have at most 21 million coins and Litecoin will have at most 84 million coins. The thing with privacy coins is kind of the nature of privacy coins, where the amount of coins being transacted is hidden. Right, so you can't tell how many coins someone holds. You can't tell using math and cryptography. You can kind of try to ensure that no coins are created out of thin air. But if there's a bug in a code or something wrong with the crypto, then potentially there could be hidden inflation where someone actually creates coins out of thin air, like doubles their number of coins. And because no one can see the ledger, it's not transparent, you can't easily tell that extra coins were created. So that's a risk with any private coins, Zcash, Monero, or Mimbo-Wimbo coins. Yeah, and so why do you think people will be willing to run this risk and use Litecoin's privacy feature? The reason why people would use something that has this inherent risk of hidden inflation is because the privacy is really important to people. And also the way we're doing it, we're using extension blocks to implement Mimbo-Wimbo. So all the potential hidden inflation is isolated in extension blocks. So unless you're using the Mimbo-Wimbo extension blocks, you have no risk of your coins being having any hidden inflation. So I guess people will kind of take it slow, right? It'll take some time before people will trust that Mimbo-Wimbo is safe, or the way we implement it is good enough. So over time as it becomes clear that there isn't any hidden inflation, people will start using it more. So basically what you mean is that as long as this hidden inflation remains a possibility on the layer 2, that risk is not going to affect the whole layer 1 of Litecoin. Yeah, so the layer 1 of Litecoin, if you consider this layer 1 and layer 2, right? So layer 1 of Litecoin is the main chain which is transparent. When people move coins from the main chain to the extension blocks, it's a transaction. You can see them sending coins to a specific address associated with the Mimbo-Wimbo extension block. So that address will hold all the balance on the Mimbo-Wimbo side. And then when someone withdraws or moves money from Mimbo-Wimbo back to the main chain, coins will come out of that address to a transparent address on the main chain. So all the potential issues with Mimbo-Wimbo is isolated to only the coins in the extension block. But talking about what you just said, so that people are very much interested in privacy, are you sure though? Because as far as I can see, a lot of people don't care about privacy that much. At the end of the day, people are all the time sharing stuff on social media. It seems that privacy is not exactly the thing people are looking for the most. Don't you think that people are more concerned about other things like, for example, quickness in transfers, comfort in making transfers instead of having privacy? Yeah. So coins like Zcash and Monero are probably two of the most prominent privacy coins out there. They're not being used that much today because there's a lot of trade-offs. Trade-offs with user experience, mostly the trade-off with user experience. So people prefer something that's fast and easy to use over something that is much harder to use but adds a little bit more privacy. I probably agree that is the case. So we want to find a good kind of trade-off where it's private and still easy to use. So that's where we're targeting. So if, given that, people would choose privacy over non-privacy, if the trade-offs make sense. But I do agree. A lot of people are giving up their privacy willingly today in social media posting about all their personal information. But I think over time, people will realize how important privacy is. I mean, we're starting to see today where a lot of people are really against Facebook because of the misuse of your private information. And I think this is even a lot more important with money. You want your money to be, you want full control of your money. You don't want someone for a transaction. Even today, if I send you some Litecoins, you can look at the Block Explorer and potentially see how many Litecoins I have or where I got it from or where I spent Litecoins. And that's not good for money. In the crypto space, there are a lot of cryptocurrency leaders which are often promoting their own coins and criticizing Bitcoin. Others call themselves Bitcoin maximalists and see all other coins as shitcoins. Conversely, you have been taking a far less conflictual approach. In a recent interview, you even said that before investing in Litecoin, people should first invest in Bitcoin. So what is the rationale behind this no conflict approach? I've always thought that Bitcoin is, Bitcoin is the king, king of crypto, right? So I think Bitcoin has the least amount of risk of it succeeding. So I think in terms of investment portfolio, people should definitely invest in Bitcoin in addition to Litecoin or whatever other coins they want to invest in. But Bitcoin is a safest of all cryptos, I think, for investment purposes. So I think Bitcoin is, so Litecoin, I think, works hand in hand with Bitcoin. I like to see both being used. I think they both work well together. And that's kind of my approach to all of this. I just remember that on Twitter, you have this image of Vegeta and Goku. So Goku would be Bitcoin and Vegeta would be Litecoin, right? Something like that, yeah. Vegeta will always try to best Goku but never succeed. But they help each other out. Litecoin's main advantage compared with Bitcoin is higher transaction speed and lower costs. Other coins such as Bitcoin Cash are also betting on these characteristics. What is the competitive advantage of Litecoin compared to Bitcoin Cash? I think it's because we follow more closely to the Bitcoin world map. I think a successful form of cryptocurrency or form of money needs to be decentralized and secure first and foremost. And that's our approach. It's important for Litecoin and just like Bitcoin to be decentralized and secure. Bitcoin Cash is, the security of Bitcoin Cash is nowhere near that of Litecoin because Bitcoin Cash's hash rate is dominated by Bitcoin. So it's very easy for a small miner or small Bitcoin pool to attack Bitcoin Cash. So the security is not there. For Litecoin, Litecoin dominates the script mining ecosystem. So the security is really top notch. And I think Litecoin aims to be more decentralized, right? So one thing about Litecoin is I'm still around. So because of that, it's less decentralized than Bitcoin. But over time, I'm going to step away and let Litecoin become more decentralized. How do you measure these degrees of decentralization in this case? It's really hard to measure. But the thing with Bitcoin Cash is basically they are doing like hard forks every six months. Or at least I think that's the schedule they're doing it. And in order to do that, it has to be very centralized. Some group of people, small group of people are making this decision about what to add to Bitcoin Cash. And that makes it very, very centralized. You often point out that when you launched Litecoin, there was no pre-mining leading to a large amount of coins concentrating in a few hands. How do you think this feature is going to benefit Litecoin in the long run? In the long run, when people use Bitcoin or Litecoin as money, it's important that the launch is fair, in my opinion. You don't want to be using money that enriches the rich. Today with what's happening with fiat currencies. So you want something that is fair. Everyone has their fair chance of getting in. And I think that that would be good for a long term for Litecoin. And you think that for Bitcoin, this is a fundamental flaw? No, I don't think it's a flaw in Bitcoin. I mean, it is true that Satoshi mined quite a bit of coins initially. But just like same thing with Litecoin, people who got into Litecoin early were able to mine a lot more coins than people who are getting today. But I don't think with Bitcoin and Litecoin, I think they're both fair launches. So once the fungibility and privacy goal will be achieved, what is the next step in the evolution of Litecoin? I don't think fungibility and privacy will ever be achieved. I think this would be a constant kind of battle for Litecoin and Bitcoin to become more private and more fungible because there's always trade-offs involved. I honestly haven't looked ahead past that because I don't think that's the battle that's easily won. So you are basically saying that fungibility and privacy are going to be the battlefields you're going to be busy with for the long-term period and you don't have any other interests or not interests, but you don't have any other characteristic that you would like to implement into Litecoin? So there's quite a few things. So fungibility and privacy is important. I think we'll always try to have better ways to scale the coin. I think scalability is also one of the trade-offs we have to make with decentralization and security. So trying to make Litecoin scale to billions of users, that's always the hard problem. Currently the way is to scale on-chain as much as you can with file sacrifice and decentralization and then also scale on layer two solutions like Lightning Network. Membo-Wimbo as extension blocks can also help things scale. One of the reasons why I chose Membo-Wimbo over other privacy tech is because of the ability for it to scale. It does privacy and scales really well compared to other implementations like Rink's signature with Monero or ZK's start with Zcash. Membo-Wimbo scales the best. You said that you plan to step away from Litecoin as soon as it gets to a certain level of maturity. What are your plans for the future after that? What I mean about stepping away first of all is I think over time, Litecoin right now works well with me around. That's one thing about the difference between Litecoin and Bitcoin. With someone like the creator around a coin, I can have a lot of influence over the coin and things can be more efficient or things can move faster. With Bitcoin, it takes forever to get anything implemented on Bitcoin because consensus is slow. It's hard to achieve consensus on certain things and hard to implement. With Litecoin, if we want to do something, we can move pretty fast on it. That's one of the benefits. Obviously, the bad thing with a creator around is the creator has more control, more influence over the project. It's kind of like the now villain dictator situation where the dictator does something, becomes evil, then the whole country or whole project goes back. But I think over time, as Litecoin becomes more used, there's less reason for me to stick around. I can potentially do more harm than good. When that time comes, I'm going to slowly give up my influence and get out of the picture. When that comes, Litecoin will become more decentralized and I think it will be better for everyone. It came to my mind the comparison with the MakerDAO Foundation. The MakerDAO Foundation is also trying to gradually dissolve and give all the power to the MakerDAO community. Do you imagine a future like this for the Litecoin Foundation? The Litecoin Foundation, I don't know specifically about MakerDAO, but a lot of coin foundations hold a lot of their pre-mine coins. That's why they have a lot of control. The Litecoin Foundation doesn't hold any pre-mine coins, obviously. Its function is to take donations and make money from partnership and merchandise sales and put that money all towards development of Litecoin and more adoption. I think that's always a good thing to have for a foundation to support adoption of Litecoin. I don't think the Litecoin Foundation is going to kind of dissolve over time. I actually wanted to become stronger and do more for Litecoin. You haven't told me what you plan to do once you gradually step aside. If you have any plans for your future as an entrepreneur, as a technology entrepreneur? I don't think I'm going to do anything outside of crypto. I think I'm going to be working on cryptocurrency for the rest of my life. But if I step away from Litecoin, I think I'm still going to work on stuff. I don't know what yet. Thanks a lot, Charlie, for being with us. Yeah, thank you. That was Charlie Lee, founder at Litecoin. I'm Giovanni, your host. Don't forget to like the video and subscribe to our channel.