LETS TALK BITCOIN

Episode 71 - Blockchain Tools and Litecoin Devs

Participants:
Adam B. Levine (ABL): Host
Andreas M. Antonopoulos (AA): Co-Host
Stephanie Murphy (SM): Co-Host
Nic Cary (NC): CEO of Blockchain.info
Charlie Lee (CL): Founder of Litecoin.
Warren Togami (WT): Developer of Litecoin.


ABL: Hi, and welcome to episode 71 of Lets Talk Bitcoin, a twice weekly show about the ideas,
people and projects building the digital economy and future of money. Visit us at
Letstalkbitcoin.com for our daily guest blog, all our past episodes and of course, tipping
addresses.
As we move into the wild blue yonder of 2014, its becoming clear Bitcoin wont be the only
cryptocurrency to find popular success. At the recent Las Vegas event, Stephanie Murphy
caught up with Litecoin devs Charlie Lee and Warren Togami to talk the value and the past,
Litecoins contributions to the broader cryptocurrency ecosystem, and what theyre aiming for
in the future. This interview comprises the second part of todays show. But first, Nic Cary is
one of the leads behind the wildly popular Blockchain.info as a multi-tool and an easy, relatively
secure online wallet. We kick off todays show in Argentina, where he sat down with LTBs
Andreas M. Antonopoulos. Enjoy the Show!
AA: Hi, this is Andrews Antonopoulos in Latin America, in Buenos Aires, Argentina for the Latin
America bitcoin Conference. I am very pleased today to have with me Nic Cary from Blockchain.
Nic Cary is the new CEO of the Blockchain, Blockchain.info, a company that has brought so
many new users into the space, by giving them an easy to use online web wallet. I am very
excited to have you here Nic.
NC: Thank you very much.
AA: Thanks for coming and thanks for all the works you have done as partner of the Blockchain.
info company. I know you have experienced some absolutely, outstanding or dramatic growth
in the recent months after the hardest change.
NC: Its been a very well ride Id have to say that, all the credit really should go to the co-
founder, who has designed and built unbelievable web tool, thats brought wonderful value and
solved some really important problems in the bitcoin economy as a young business. So, the last
few months weve seen really impressive community adoption of Blockchain work. We are one
of the older companies in Bitcoin. I think we are 2.5 years old now, so that makes us almost
Jurassic in bitcoin years. But I am happy to talk more about, the trajectory of business, tell you a
little bit more about what weve been working on. So, November was a particularly historic
month for Blockchain, at the very end of October we actually hit 500,000 wallets, that
represents half a million users. When you think about some of the big cities in the world, thats
actually the same size of some of them. We are really seeing impressive adoption of bitcoin and
that was just through October, so kind of historic, numbers are just for people psychology. But
November was even better, we saw almost 300,000 new wallet users in the month of
November, with just unbelievable traction. At one point we were doing a 1000 new wallet an
hour. That velocity is continuing through December here, so we are watching all that very
carefully. Its been wonderful to see the traction.
AA: One of the things that I find most interesting about Blockchain, apart from the user
interface which is relatively easy to use has been development. One of the core principals
behind the blockchain info wallets is that, you dont store the credentials of the end user and
you essentially give them the ability, at any time from the wallet backup to be able to
reconstruct the wallet and use it independently in any of your application. Traditionally theres
been this tradeoff where, you either have the full desktop appliance and full control, or you go
to Web wallet, but then you got this trusted third party issue that can introduce a lot of risk.
And you seem to have found the golden mean right between those positions. Tell me a bit
about that marvel.
NC: Yea, we like to call it a web assisted wallet. We have all the convenience of the Web wallet
but none of the liabilities, so were really trying to marketize this technology as well, so that end
users if they choose, even if they dont trust us for some reason, even though we dont have
access to private keys, or passwords or any of that. They can leave anytime and we provide lots
of tools sets to migrate to other tools. But we really hope that people find a safe place to store
their bitcoin at blockchain. I like to tell people that I store all of my bitcoins at blcokchian.info,
but its really important for users to understand basic security practice; they really should
follow. All users should set up two factor authentication. They should really learn and set up
some secondary password, which approves the transactions and if they do those things, then
they most likely gonna be just be fine. The most secure way to use Blockcahin.info is to use
either, the android app or iPhone app, the chrome extension or Firefox extension those are the
best, most secure ways to use blockchain.info wallet.
AA: So, the secondary password, which is a key innovation, it prevents you from sending funds
unless you enter the secondary password?
NC: Thats exactly right. For Example lets say you use the Blockchain.info Apple wallet and
someone steals your wallet, if you didnt have the secondary password setup. They could send
transactions from that wallet, if you are logged in. The secondary password would prevent
something like that from happening. So, think it of almost like a pin or a key, when you pull
money out an ATM or authorize any type of movement of money from your wallet. And of
course if you have an email address set up at blockchain.info, well automatically send you a
wallet backup and you can get directly to email and instantly after the transactions completely.
AA: I am one of the more security paranoid people in the space.
NC: We appreciate it.
AA: Through experience and security makes me paranoid, because digital information security
is really hard, its not easy. I really appreciate blockchain.info s ability to provide multiple layers
of security, so its not just about having a secure core, but layers and layers of protection, so
that the more youre trying to do with your wallet, the more security you have to get through. If
I just want check my balance, I am never gonna see the second password. But, if I do want to
send, then I have to escalate my level of security and that provides me with a much greater
degree of confidence.
NC: Yeah! You should know that we host all of the code of blockchain.info on dedicated private
servers. So, there are zero third parties involves at blockchain.info. All of the code, was all
crafted internally, everything is home made. We dont use third party software anywhere.
AA: One of the little noticed features, perhaps that I liked to point this out, when you have
requested secondary password for sending, there is a little hidden feature there, which pops up
on your screen, is a virtual keyboard. So, people may wonder why that is? Cant you just go into
the input field and type away on your keyboard? Yes, of course you can, but the real magic of
that feature, is that it allows you to mask your second password. So that even in the event that
your machine has been completely Trojan and compromised, and you have a keylogger, which
is probably one of the biggest threat for online wallets, or wallets in general, that the keylogger
will not be able to capture the entry of the secondary password.
NC: Yeah! Thank you, so much for bringing that up, that is an amazing and really important
point, and one of the responsibilities we have is to actually help users understand to do these
things more and to guide them and to coach them through these things. Ill speak real quickly
about a project were working on, which is a new user education game basically, so when a
wallet will be created, Itll actually send the user through a pathway of learning what a private
key is, how to use an address, how to set up a secondary password and actually demonstrate
this functional use, so people are actually behaving in learning to do these things without
someone having to have an one-on-one conversation with them. At the end of this game well
have actually a reward for new users to complete it and will give them some miniatures, some
fractions of the bitcoin for completing it. So, thats kind of, one of the things we are working on.
We really feel strongly that, in order for the bitcoin to be ready for the next 10, 50, 100 million
users, some of these best practices had to just become second nature and so far the battlefield
of bitcoin is really been fought in these one-on-one conversations and some amazing angels,
who dedicating their entire lives to doing that. But, the software has got to mature, the new
user education has to mature and it have to be so simple to use it, people arent even, they
dont even realize why they're clicking on the secondary password that way for their own
privacy, but that's one of the things we are thinking about. So, we are trying to incorporate
those things into maturing our software
AA: There are many layers of security and very often security is seen as the kind of thing were
you just buy a security products, if I put it as point in what, of course thats not security and
above that you want to think about architecture operations, but in this new field I think one of
the most underappreciated aspects of security is user interfaces design, user experience. The
best way to apply security is when the user doesn't even know their secure, but through their
user experience in the interface, they adopt secure practices, because it is the intuitive thing to
do, rather than the counterintuitive thing to do, and I think youve made a lot of progress in
that space.
NC: Yeah, and I think the other area i will comment on, which is that we live in this age now,
were many, many people are so not careful with their privacy, in fact they live completely open
with their whole world on Facebook, on twitter, and all these social media site and I think that
bitcoin can almost interestingly bring some of that privacy back without people even
necessarily knowing it by designing very effectively, by teaching through games and otherwise.
Why using things like bitcoin can actually improve everyone's freedom and secure everyone
around the world. But, I think about that for all the Millennials that, they broadcast our whole
lives in the world, but were about to introduced the most digital and most free money in the
history of time that can also be the most private one. And I think companies, should have an
obligation to sort of view that same sort of philosophy into the privacy side and not just the
security.
AA: Security is a problem for bitcoin, but as an entrepreneur, and especially in the field of
security, that means opportunity and we have programmable money, so we can actually
innovate in ways of security and create new security model, new security paradigm, new
security practices through this programmable money, be it Multisig, be it CoinJoin and being
able to do anonymization or be it the user interface design. Where do you see blockchain.infos
role in innovation and using innovation as a tool to drive better security and better wallet
experience?
NC: So, its going to be a core principle of the blockchain team to implement and prototype all
kinds of new ideas and a little like Google apps does that, thats gonna be something we
incorporate well into our business. Well literally spend time and resources on wild ideas just to
see if we can get them working. I love Multisig, CoinJoin is a major push inside the blocking
wallet right now, its currently a free feature that helps users brake the custody of coin
transactions without ever having to surrender their coins, to a centralized server, so to allow
the server to manage proposals and individuals to basically make a sure transaction together
and what's amazing about CoinJoin is that, it actually improves the privacy of the entire Bitcoin
network, because when you stay transactions, now you won't know whether or not any of the
original addresses belonged to the same person. So, were very excited on that technology,
Multisig is definitely on our radar as well, and were open to ideas from anyone. So, to
everyone who is listening, if you have great ideas, please send them along, were definitely
looking for innovation from our users, that actually been one of the reasons, why blockchain
that looks and behaves and is the way it is. We spent hundreds and hundreds of hours on
bitcointalk forums going through posts, responding to people and we haven't gotten to
everyone in, part of its been more difficult than ever to keep up with the volume of
interactions and we are dedicating resources around-the-clock to work on the things. So, if you
have good ideas, please share them with us, we want to build things that that bitcoin users love
and make and want in their lives.
AA: Add to that, it is been incredibly impressive to watch and thats probably due in more small
part to Ben Reeves, the core engineer of Blockchain.info, to watch how quickly ideas can be
turned into reality prototypes and then actual production code and I think one perfect example
of that was, within less than a week of the release of CoinJoin, as an idea, there was an
implementation in blockchain.info, it was absolutely the first implementation in any wallet and
there is certainly that is in low and small part due to Ben.
NC: Yea, Ben is unbelievable and I think what inspires him in many ways, is an impressive sense
of curiosity around, how new and innovative things can be done with bitcoin. So, whenever
there's a project like that, that needs some attention, hes on it right away, he studies it, he
think about how to build something and when it makes sense to have that in Blockchain, we
will, and when it make sense to open source things and just provide resources, the community
will do that as well. So, yea, he read that study, that proposal for a CoinJoin solution and I was
talking with him one afternoon, I was like Do you think that something like that could be
done, he was like Yea, I think may be in three or four days. Yea, I have heard that before
developers in something thats 3-4 months or something like it, but he delivers very quickly.
AA: So, whats next for Blockchain.info? Where do we see the future in next 12 months?
NC: Okay, 12 months, I probably won't try and project that far along, theres a lot of low
hanging fruit Blockchain and were really trying for prepare it for newer audiences. I think
Blockchain.info became so successful because it was listing to the very earliest adopters, who
wanted amazing and interesting features for bitcoin and the next kind of battlefield in bitcoin is
to create interfaces that are much more familiar to millennials, to mom-and-pop people, to
anyone whos got a cell phone, so we are thinking about that in a couple of different ways. This
summer Blockchain purchased blockchain.com, so we own a couple of different web properties,
so we got blockchain.com, blockchain.info and well be launching sharedcoin.com sometime in
Q1, so the idea behind these different properties is as follows:-
Blockchain.info will continue to be the Bitcoin Block Explorer and we gonna build more and
more functionality and to studying the bitcoin economy, being a resource for journalists,
academics and anybody that wants to crunch numbers. So, big data analytics is definitely gonna
be coming to blockchain.info and one of the hopes there is that, well continue to get feedback
from people on what to build and we do every week and there's really profound and interesting
economist that are starting to provide guidance for us, for the things that looking for and if we
hear an interesting idea we just implement it. So, the vision for blockchain.info is basically to
become a little bit like to Google for bitcoin, studying the network or maybe the Bloomberg of
Bitcoin and were gonna be investing in that for especially sort of more sophisticated bitcoin
users. Blockchain.com is going to become the web wallet and were going to build out and
invest all over the place to make the user experience as familiar and as simple to use as
possible, while teaching people around, about privacy and about security, so those are going to
be core principle in our apps. We are totally reworking all the UI right now for a wonderful new
iPhone application that we hope to get out in the next quarter as well. We are going to be
investing in our chrome extension, our Firefox extension, Firefox OS; we want to be where ever
people are, so they have access to the blockchain wallet in a secure way that is easy to use and
that kind of the key functionality, were sort of focused on in Blockchain is basically putting it on
mobile and making it easier to use. Thats a major endeavor and a lot of people talk about those
things, but were gonna AB test everything, when we cant figure out which way to design, we
are gonna mass prove it for us. The last property is sharedcoin.com and the vision for
Sharedcoin is to actually to turn it into a donationing campaign building application, so if I'm
really inspired by the World Wildlife Foundation or I wanna donate money to a cause in Africa
or something like that, I'll be able to build a campaign there and then solicit donations from
other people around the Internet in bitcoin, so what will happen is, a bunch of the proposals
will be submitted into a Sharedcoin campaign and once the donations hit the peak amount,
then well send a CoinJoin transaction to the end recipient. This will be a free tool for anyone
who wants to start a campaign, for any social cause or political cause that they feel they want
to raise money for.
AA: Very exciting, coming down the hike and of course all of this will be almost overshadowed
by the enormous influx of users that, were certainly anticipating if not, slightly dreading from
operational perspective, so where do you see the growth in terms of wallets in the next few
months?
NC: I anticipate it will be very fast! Blockchain provide free APIs for teens, developers and
entrepreneurs to integrate a Bitcoin wallet right into their apps or toolsets, so on having heard
about some projects that are firing up in the next 6-8 weeks, I'm very encouraged for the total
user base of the bitcoin growing. But for Blockchain, it will be very special to because were
anticipating seeing over 1 million wallet hopefully by the end of this year, I think that number is
just gonna keep going up, the velocity is getting faster and faster, so with free APIs for wallet
creation and things like that, lots of different organizations and teams and businesses around
the world are relying on the Blockchain wallet, so were excited for all the future growth, but
for the most part its gonna be a wild ride, were investing right now in anticipation of that
growth, buying lots of equipment and hardware and posting that in different geographic and
politically redundant zones, we are anticipating the next big wave of users.
AA: So, you mentioned APIs and I think that's probably one of the unsung heroes of Bitcoin in
general but also Blockchain.info. As a developer I have used Blockchain.info APIs and I thinks its
important to mention the richness of those APIs both in terms of being able to extract
information from transactions and blocks, an easy to consume JSON and RESTful interfaces, but
also some of the real-time Websockets interfaces that you have, that can be used to create
applications that are ultimately responsive in real-time surveillance on the network. Can you
tell us a bit about the APIs and their importance to your business?
NC: They are hugely important to Blockchain.info. So, if you are an entrepreneur, developer and
you are interested in getting a business started up, please check out the free documentation,
theyve always been free, we have a rate limiter right now in place, but you can easily apply to
override that, and if you are anticipating a lot of traffic definitely get API key for it. We think
and we don't know for sure, because you dont even have to be a Blockchain user to use some
of our APIs, but they are responsible for almost 1/3 to almost nearly 1/2 of all of the volume on
the backend for wallet creation and transactions in the bitcoin economy, from the Blockchain
wallet perspective. So, theyre very interesting and theyre exciting, theyre incredibly
strategically important for us. We will continue to keep the documentation current, to release
APIs for all the services we build. We want people to do anything and everything they want
with our technologies.
AA: Nick Carry of Blockchain.info, thank you so much for joining us today and giving us some of
your vision and the exciting days ahead for bitcoin and for blockchain.info. Thanks so much.
NC: Thank you very much, its going to be extremely exciting year, were looking forward to
building a world-class team, so if you are interested, please visit us at blockchain.info and get in
touch. We are looking for people to join the mission.
AA: Thank you.
NC: Thank you.
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SM: Hi, so i am here today with two very special gentlemen who are involved intimately in the
Litecoin project, its Charlie Lee, he is the creator of Litecoin and Warren Togami, developer and
also you made Fedora, so you are well -known for that as well, you are both also Bitcoin
developers. Welcome to the show, thank you for being here.
CL: Thanks for having us.
WT: Oh! Thank you, Stephanie.
SM: Great! So, ok first of all, for somebody whos never heard of Litecoin before and people are
hearing about it, so it's getting more popular, but for somebody whos never heard of Litecoin
before. How would you describe it? What is it?
CL: When I first created it, I always described it as, Silver to Bitcoins Gold. So, its kind of an
easy way to understand what Litecoin is. The proposition Litecoin: trying to be a lighter version
of Bitcoin, more currency and faster transactions, something thats easier for someone to
spend than bitcoin.
WT: I joined development of Litecoin fairly late, in May of this year. I actually thought that the
silver slogan was kind of silly, but then it turned turn out to be true in a way, so I am going with
it. The lighter then bitcoin thing turned out to be true from engineering and a user behavioral
standpoint, thanks to a change that Charlie made in 2011, that discouraged uneconomical Tiny
or something people would call a spam transactions that bloat the Blockchain. If the
Blockchains and the client scales at a pace that is more in line with actual users, then it is makes
it easier for people to get started, use the client and were actually making improvements to
litecoin and submitting back it, some of this back to bitcoin within the next few months, with
the goal of making litecoin even more light.
SM: Ok! So, you wanted to be very user-friendly and when was the Litecoin project first started
Charlie? When did you first think of it?
CL: I created it in October of 2011.
SM: October, 2011. Okay so it's one of the oldest so called Altcoins, but it's not The oldest is
that correct?
CL: That's correct. When I create Litecoin, there were quite a few other altcoins and I was
dabbling with them, playing around with them. Thats when I realized that bitcoin is awesome
but there is always gonna be an alternative. People like to have choices, so I decided to create
my own, because what was out there was really not very good. So, I took all the good things
from other altcoins, picked a good name, launched it very fairly and that was that, and rest is
history I guess.
SM: And when you say you launched it fairly, you are talking about no premining is that
correct?
CL: That's correct, so the previous coins had like a lot of premines, one coin had like 7 million
coins premined. So, the developers were trying to kinda strike it rich, they launched a coin, had
a lot for themselves, tried to get it accepted in private exchanges, when people were trading,
speculating, all, they could like cash out. They could cash out like hundreds of thousands of
dollars that way. And I wanted to launch something that's fair because I think thats how to
succeed long-term, not to, just for short term profit. So, I actually announced the coin, i actually
released the software a week before it started mining, so what was missing was the Genesis
blocks, so I kept that to myself and everyone had chance to prepare their software for mining
on their PC and then on the date of the launch, which was also democratically chosen by poll on
the forum, I released the Genesis block hash and people just jumped in at the same second and
at that point I didnt have any litecoin myself, so I had one block mined and the rest is everyone
jumped in
SM: 3, 2, 1 Go! Right!
WT: I like add that, in addition to the fair distribution from the very beginning and a fairly
smooth you could say on difficulty curve, showing continued fair distribution through the
history of Litecoin. I really have to credit Charlie for the anti-spam rule that I think is one of the
reasons why litecoin has survived to today when so many others have failed.
SM: When you talk about anti-spam, there was that something happen in 2011 and where
somebody's launched an attack on the litecoin network and sent millions of tiny one litecoin
satoshi transactions to addresses. Is that right?
CL: Yea, thats correct. At that time, some people didnt like litecoin, a lot of bitcoin supporters
thought that altcurrencies is a parasite on bitcoin and it takes away from bitcoin. I personally
dont agree. I think theres always gonna be an alternate currency and people would like
choices, so we got attacked in sense where a lot of tiny satoshi transactions were sent on the
litecoin network, because our fees werent very strict back then, they didnt cost the attacker
much, maybe cost him like $10-20 in fees to bloat the blockchain by like megabytes, like make it
really cumbersome for everyone else. So, at that point i tried various things, made the fees
harsher, and made the spams cost more so that if you wanna attack the network you had to
pay for it that helped really a lot.
SM: Litecoin uses a different mining algorithm then bitcoin, its called scrypt, scrypt with a Y
and Bitcoin uses the SHA 256 algorithm and you made that choice because? Was it because the
script algorithm is more memory intensive and you thought it would be resistant to mining on
specialized devices like GPUs or ASIC miners. Is that correct?
CL: The main reason why I decide to use scrypt is because I realized early on that itll be hard for
altcurrency to survive with bitcoin, if it was fighting for the same set of miners. Back then the
bitcoin miners were using GPUs, so I wanted something that was hostile to GPUs, but worked
on CPUs, so script was the choice and one of the great things about Scrypt is, it scales well with
hardware. Recently, for example the bitcoin ASICs came out, theyre like a 100 times more
efficient then GPU mining. So, when they came on the scene all the GPU miners got basically
wiped out because super unprofitable to mine with GPUs.
SM: But they still had the equipment.
CL: They still had the equipment and someone figured out how to make the GPU mining
efficient on script. Its like 10 times more efficient but not like bitcoin, so all the GPU miners
switched to mining Litecoin scrypt, which is cool. So, we still have different set of miner mining
the two different coins and I believe that when ASICs for litecoin does come out, it wont totally
wipe out the GPU miners, so in some sense hopefully itll be more democratic, where people
with GPUs will still be able to mine litecoin.
WT: Ill have to add here to speak to something that Charlie mentioned earlier about the bitcoin
people who don't appreciate altcoins, well for one, for script the litecoin network is now
secured by entirely different hardware that is no longer capable of being used with bitcoin in a
meaningful way, so there is an alternative network now. To help justify Litecoins existence at
all, especially with the growth of the litecoin development team recently, we now believe that
litecoin can help bitcoin, by helping to improve the upstream bitcoin software that we also rely
upon for improvements. In the last several bitcoin releases we have had a major influence on
bug fixes, not only in the 08. releases but also in the upcoming 09 release, in addition to that we
are working on entirely new features that would be suitable for bitcoin as well and a lot of this
are detailed on the Litecoin project blog and Google plus stream, we are just quite active in
describing what's going on with the development project. We are engineers and were focused
on development.
CL: Yea, so I think the Litecoin development teams development efforts complement the
bitcoin development efforts really well. So, the litecoin compliments bitcoin and I think its very
good for both coins, for the whole ecosystem, where bitcoin and litecoin developers work
together and make everything better.
SM: Yea, its sounds like there have almost been some features that were tried in litecoin, ok
that works maybe we can do this in bitcoin too, so its kind of an experimental things.
WT: The most recent example, a long standing issue in the bitcoin reference client was a level
DB corruption, that would temporarily render the Mac OS client unable to function and this
happened only for some users, but it was prevalent enough to be disruptive of bitcoin and
litecoin adoption and use. The top developers within bitcoin really tried to figure out the cause
of this, but they have plenty of other priorities, I personally led a joint bitcoin and litecoin dev.
bounty, where Gavin Andresen and famous bitcointalk and a few donors of the community and
the litecoin dev. team, all combined with a bitcoin, litecoin bounty to attract other people who
might understand that particular part of the code, through contributions of a level DB
consultant from elsewhere and other coders, we also distribute a Bitcoin client, that is litecoin
minus litecoin, because litecoin client has a lot of features that are not yet in the bitcoin 08
client, so we managed to test and it seems that these patches fix the Mac OS corruption issue
and now bitcoin 086 is released to fix that issue.
SM: Returning back to the Scrypt algorithm for just a minute, Charlie I just want to get your
thoughts, people are saying now theres a company Alpha Technologies and there are some
others that have been talking about developing ASIC miners for scrypt based coins like litecoin.
What are your thoughts on that? How do think its going to impact litecoin and other scrypt
based coins.
CL: Well I think that litecoin ASICs will come out, because litecoin, basically it's a matter of time
if the price goes high, which is pretty high right now. It becomes worthwhile for someone to
research and develop an ASIC specifically for mining litecoin, then people will probably work on
that because itll be profitable when they actually launch it. When it does come out my hope is
that, it wont to do the same thing to litecoin network as, what the bitcoin ASICs did. Itll be
more.
SM: Which is a centralizing effect?
CL: A little bit of centralizing issue, bitcoin people are concerned about bitcoin. Due to the
centralization of ASICs, now it seems like only the large wealthy miners are going to have deals
with ASIC companies to get them at a cheap price or get them early and now they seem to be
dominating the Bitcoin mining market, so there might be like 10 large miners that control all
the mining. So that's bad because then its not as decentralized and they get control what
transactions get mined, they can like prioritize their own transactions over someone else and if
they were malicious they can even attack the network, that likely be not, but its a possibility.
So, hopefully due to scrypt, litecoin ASICs will not be so much more powerful than litecoin GPU
mining that it will push out all the GPU miners. So, my hope is that it was designed that way, so
lets say, if it actually does happen, when ASICs do come out, it will still have some democracy,
it will still be Democratic, and there will still be a lot of small miners.
WT: I like to add that even before ASICs came out, the major threat to the security of the
bitcoin or the litecoin network was the tendency for people to mine at the largest centralized
mining pools, even Satoshi himself did not anticipate this as being a problem until it happened,
as a matter of education for all bitcoin, litecoin users, its important to note that it is less secure
for the network if everyone is using the largest pools. To help that problem the litecoin dev.
team actually is investing in decentralized mining technology, including helping the sponsor
Phorus White, the author of P2P pool. I personally have contributed code to P2P pool and now
were sponsoring him to improve P2P pool for both Bitcoin and litecoin for it to scale
substantially more, if P2P pool were much larger than it is today, would not be as big of a
systemic risk as the centralized mining pools. I also like to add that P2P pool supporting ASICs
today is in large part thanks to us, our past support of forcevoit.
SM: So, one thing that I've noticed, I been following litecoin personally for quite a while, over a
year now, not as long as you guys, but I have been aware of litecoin for a while, Ive invested in
litecoin myself, used litecoin. I have gotten paid in litecoin a couple of times for voice over job,
thats cool. What I noticed is there some people, as you mentioned Charlie that don't like
litecoin and they criticize it, they say its, I think they're afraid maybe its taking away something
from bitcoin as you noted and they make all kinds of criticisms. To me Ive noticed that focus
kind of increasing a little bit to the point where, I think it's a good thing for litecoin because
people are talking about it, right. If they really thought it was irrelevant or it was not here to
stay, they wouldn't waste time; you know trying to criticize it. I just wonder, what do you think
about the Litecoin haters?
CL: One of the main reasons why people say litecoin is bad is, because they don't like the fact
that it's so easy to create a coin that inflates the total bitcoins out there. So, you take litecoin
has 8% market share, it kind of inflates the number of cryptocurrency out there. They dont like
that fact and my answer to that is, I think its just human nature, people like choices. So theres
gonna be , lets say 10% of the market taken over by litecoins, like you can make thousands of
alternate currencies but they are not gonna all take like 10% of Bitcoins market share. All the
alternate currency added together might take 10%, thats just the way it will be, maybe like the
number one coin Bitcoin takes 90%, second coin Litecoin takes 8%, the third coin might take
like 1.5% and the rest would take the smaller chunk. So, its just the way its going to be and
until you accept it, people will finally realize that, thats way and not fight it.
WT: I like to add two key points to this, first some of the bitcoin devs have warmed up to the
idea, that litecoin can be useful in being able to prove ideas that may not be popular politically
in bitcoin yet, because litecoin already has a different philosophy and different users, who are
not so locked into what the original rules were for bitcoin, so because of that were able to be
far more efficient in the growth of litecoin with the number of users and beyond that we love
the opportunity and some contributions that we've already had, to test concepts before they go
to bitcoin.
CL: One thing I like to try to tell people is, you can think of litecoin as like a running mate to
bitcoin, so we are both fighting the same battle, were both trying to defeat fiat, were both
cryptocurrencies trying to win the war against fiat, right. Think of them as enemy and be happy
that bitcoins running mate is not like BBQcoin, right, at least litecoin has a really good image
and we had a lot of good developers, we have bought a lot, and we dont try to attack bitcoin or
try to overtake bitcoin. So, I think its a good thing for everyone involved.
WT: It's important for everyone to understand especially as there is this idea of not wanting to
miss the next big thing, but what people don't realize is that a lot of these copies bitcoin are
made by people who really don't understand the code. Actually very few of the Altcoins have
developers, who understand the code to the extent to be able to fix a problem especially in the
event of an emergency, I don't like to name, names, but one of the other, lets say copies of
litecoin has struggled to update their software to such an extent that they've offered us bribes
to help them to fix their coin and they ended up hiring someone else at a very high price to fix
their coin. So, beware of coins that seem to have lots of good marketing without the
engineering skill to back it I think, we haven't been all that interested in marketing litecoin
ourselves, largely because were engineers and what we do best is improve technology and to
make it better and I personally believe that, if you can make a network stable and dependable
long term just maybe people can trust it as a medium for commerce.
SM: Speaking of the value that people see in litecoin, the price, i think we have to talk about it.
For a long time litecoin was somewhere around two US dollars and the exchange rate with
Bitcoin is on the order of somewhere around 50-100 litecoins per bitcoin. Recently, there was a
big price spike in litecoin, it hit an all-time high against bitcoin and also an all-time high in terms
of US dollars and it was about US$50 and then one litecoin was .05 bitcoins or 50 milibits. I
guess, I am just curious, what are your comments about that. Do you think that's a good thing
for litecoin long-term, is it people seeing the value, is it sort of a bubble, what was going on
there?
CL: Yea, its kinda incredible that at the peak litecoin actually hit $1 billion market cap, I mean
bitcoin just this year hit $1 billion market cap. Litecoin is definitely way ahead and its due to
speculation, I mean right now litecoin is like, I would say about a year and half behind bitcoin.
So, we don't have as many merchants, were missing some key infrastructures like payment
processing and exchanges, we are only on like on one big exchange, so compared to bitcoin,
litecoins still very young. So, a lot of the price is due to speculation, people gets hyped for
some reason, Mt. Gox announces that they will support litecoin, and the price shots to the roof
and they dont talk about litecoin for a while and price drops through the floor. Its all
speculation, and its kinda bad but were growing, so it will take some time. Bitcoin went to the
same thing right. It shot through $30 and then dropped all the way back to $2. Litecoin went to
50 and might go back to $2, who knows and I really care or worry too much about the price, we
just worry about making sure that network is secure, build up the infrastructure and try to get
more people to adopt it, try to convince bitcoin people that litecoin is not as scary as people
think it is. So, thats what we are working on and with time the market will grow, infrastructure
will come, prices will stabilize, merchants will come.

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SM: Charlie you work at Google and Warren you work on all kinds of other projects and you
both doing a lot. So, you dont have time yourself, necessarily to build all this infrastructure.
Who is working on the litecoin payment processor or the API, whos working on that stuff?
CL: One thing I wanna clarify, actually i recently joined Coinbase a few months ago, last time I
talked to you I was working with Google.
SM: Oh! I am sorry.
CL: Yea, thats ok. I decide to go all in with cryptocurrency, so I am working with Coinbase on
bitcoin stuff and at nights and weekends I work on litecoin with Warren, trying to push the
whole ecosystem forward, everything cryptocurrency related. Maybe eventually I can convince
Coinbase to support litecoin, well see about that.
SM: I guess another thing is, youre saying that litecoin is supposed to be light, thats a big thing
about litecoin and when you say light part of what you mean by that is that the block chain is
not cumbersome to download and run a full node on your computer. There used to be an
Electrum client for litecoin, which I think you made Charlie, is that right?
CL: Thats correct.
SM: What happened with that, are there light litecoin clients that currently exist or do people
have to the run the litecoin QT client, to be able to use litecoin on their computer.
CL: Currently the main client we have is the Litecoin QT client, were working with a lot of
different developers to implement other litecoin clients, so we are trying to convince some of
the bitcoins clients, wallets to support litecoin and were also forking some of the wallet
software of the other clients to add litecoin support to it. There's gonna be more litecoin clients
and also the lighter clients too.
SM: Yep, and all your spare time youre doing this.
WT: I personally have been directing and working with upstream Bitcoin J and android wallet
makers, to make a long-term maintainable litecoin wallet for mobile, someone had already
done it earlier this year but we recommend people not using that: One, because it was done
without understanding the protocol, they were not able to update the code after that. So, the
new port to android will be done in a way that is easier to maintain, to rebase and merge with
new upstream versions in the future, so that will be long term and maintainable. Here at the
Bitcoin conference, we got some interest from Armory to also support litecoin, because of
armory is like at the forefront of security and it actually is not a lot of code change for them to
also support litecoin. So, theres a huge possibility there, especially within like a month or so
when they will have Trezor support, where even if your computer is compromised, with Trezor
your bitcoins and litecoins, hypothetically are secure from theft.
SM: Trezor is a hardware wallet, for anybody isnt familiar with that, but what would that look
like if Armory were to support litecoin, would it be like, you run one client and you have your
bitcoins and litecoins in the same application or would it be two different things where you run
one for bitcoin and one for litecoin.
WT: I dont wanna speak for Armory just yet, because we only just got this idea yesterday, we
actually never met before and we realized how easy it would be to implement. The concern will
would be adding support for anything is the long-term maintainability, so our dev. team would
be working with them, to make sure that their client is doing all of the rules exactly in the same
way as the Litecoin client, because there are a few different rule changes, that are different
from bitcoin and I really have to compliment them, that theyve done a tremendous job on
their client and additionally there has been some recent talk of bringing back Electrum for
litecoin, that actually wouldn't be a lot of work it is just a matter of time to do it.
SM: One thing that you can do with litecoins, which this is a very important piece of
infrastructure I think, it's paper wallets, thats at liteaddress.org where, I think Charlie you took
the code from bitaddress.org and you changes it to support litecoin. So, people can store there
litecoins in a paper wallet, is that right?
CL: Thats correct. One of the coolest features of the newest liteaddress.org site is, encrypted
paper wallet, so one of the problems with previous paper wallet is that, if you have your keys
on a paper wallet, it's just on the piece of paper, so if someone else sees that piece of paper,
theres credicall on it or they can just copy the private key down. Once they have your private
key, then they have your coins, so even if you put it in like a safe, if someone breaks into your
safe your coins are gone. So, one thing cool about encrypted paper wallet is, you can pick a
passphrase that only you know, a strong one, and you can encrypt the keys, so what's printed
on the paper wallet is an encrypted version, so if anyone sees it, they wont be able to decrypt
it unless they have your passphrase. Make sure your passphrase is strong enough, and that they
cant decrypt it and then that way you can make multiple copies of this encrypted paper wallet,
because they are safe, like you can put one in your house, you can like hid it somewhere or you
can put one in the safe, so If you loss the copy you dont lose the coins because you have
another copy somewhere, it's kind of almost the foolproof way of storing you coins. Of course
it's still not easy for your grandma to store your coins encrypted paper wallet, but at least its a
very good and safe way to do it now.
WT: I like to add that the liteaddress.org, while Charlie started that and did the code for it, it is
now among one of several litecoin oriented websites that are maintained and secured by a
nonprofit organization called Litecoin Association. Now, this is an entirely different group
outside of the Litecoin devs, whose goal is to educate and protect the resources of the Litecoin
community, so they out how-tos, they run the wiki., they run the forum, they have events
planned, they were speaking in San Francisco only a few days ago. I highly encourage people
that are interested in litecoin to look at the Litecoin Association and to talk with them on the
forum, this is outside the devs and were delighted that other people have picked up this ball to
organize the community; because were a little busy, we like to focus on engineering.
SM: One question that we asked a lot on Lets Talk Bitcoin and I get asked a lot personally is
like, how does someone get litecoins?
CL: Right now the easiest way is, like the largest exchange as most liquidity with litecoin is
BTCe.com, getting US dollar in BTCe.com is hard, I think its like a lot of loop safety jumps
through with verification and stuff, and it might take also a while. So, a lot of people tend to
buy litecoins with bitcoin, I would recommend people buy bitcoins first and then send some to
BTCe and buy litecoin, its pretty safe, I used it for like 2 years now, there hasnt been any issues
with BTCe. Easiest way to get bitcoin is Coinbase, if I can put a word in for my employer.
SM: Maybe at some point there will be easier ways to get litecoin too. I am curious, like what
are your long-term plans for litecoin, what are the next steps and where do you see it going.
What kind of ideas would you like to implement with litecoin?
WT: The Litecoin development team has been growing over the months, largely thanks to the
donations from the Litecoin community, weve been able to financially support more
developers who are working on things that, we think are important to improve both bitcoin and
litecoin, so that includes improving decentralized mining, that includes like the major bug fix for
Mac OS that was just done and we still have to pay the bounty for that.
SM: I feel the price fluctuation makes the bounty situation interesting, right?
WT: Yes, the litecoin portion of the Mac OS fix was posted at 200 litecoins, which at the time
was a lot less money, now to pay that out its kinda painful but with so many Mac OS users
having trouble with both bitcoin and litecoin, it was really worth it to get that bug finally fixed
and I was very happy to have an opportunity to collaborate with bitcoin developers and
together get this problem solved. Beyond that we have some other things down the pipeline,
I'm mentoring a computer science student that is looking at a way to redo the native block
storage format, in a way that would be more compact; at first this would be a way to have a
much smaller download for a bootstrap.dat. So that people can get started with litecoin or
bitcoin a lot faster, but there has been some talk about this could make block transmission over
the network or the native storage format far smaller in the future, which again helps the light
goal. We have also contracted with the prominent bitcoin dev. Peter Todd, to work on two key
things that would help litecoin to become more light in the future. One of which is to deal with
the huge amount of one litecoin Satoshi spam that happened in 2011, this happened to
addresses largely of which are banned now and they're taking up hundreds of megabytes of
UTXO database space, that really no one cares about and no one likely will spend them. What
our goal is to eventually use a minor soft fork, a vote by the miners. So, this would be similar to
bitcoins coins paid to script hash minor vote soft fork that changes the rule after a certain
point, after 90 or 95% of the last thousand blocks or so are mining with this new rule, because
that means that enough of the network has agreed to this. The proposals to the community so
far has been positive on this, because of this allows the disc and RAM consumption of the client
to eventually shrink and because of the growth of our UTXO set, which is substantially smaller
than the bitcoin thanks to the anti-span rule, we think that'll help us to be extra light. In
addition to that part of that contract is to begin the implementation of what bitcoin has
planned all along, which is pruning of the blockchain, we are supporting Peter Todd to work on
bitcoins implementation of pruning, a kind of scary thing for the bitcoin network has been
shrinkage of the number of listening nodes across the global network and the strength of the
global bitcoin network is only as strong as a number of listening nodes that do fully verified and
it's been harder for home users with lower down width and disk space due to the very large
bitcoin blockchain, but in the future you'll be able to have only a subset of the blockchain with a
fully verified node and it'll help a lot more people to run a fully verified node. Though there will
be separate nodes called Archive nodes that have all blocks available and other websites where
you can download or torrent download the full blockchain. Hopefully, within the next few
months, thanks to one of our engineers well have a more compact, compress bootstrap
format, so that you'll be able to sync a client from scratch much faster. A very exciting thing
that you're likely to see within the next few weeks, one of the major vendors, that has been
very successful selling real world goods with bitcoin is sophisticated enough to implement their
own litecoin processor, they don't care about dollars and not quite ready to launch yet, so I
dont wanna name them, but the really interesting about this is that they realize, if they
implemented a payment processor for litecoin, for people who don't care about fiat, then they
can generalize it a little bit and allow other people to use it, as a white label shopping cart
solution. So, lots of people who want to sell various goods and services don't have to do any
code to be able to have a checkout solution for litecoin or bitcoin with no fiat involved that can
be exciting. The entire goal of the bitcoin and litecoin is to be a medium of commerce, and it's
healthier for both code to move away from a wild speculation in general, to have companies
that are sophisticated enough to be able to do that and to enable other companies, is an
exciting things. I wish I had time to do that myself and I'm glad other people are getting
involved.
SM: Great and Charlie, anything you wanna talk about new features or plans for the future with
litecoin?
CL: I think Warren did a very good job at describing what were planning to do in a future, a
very technical look. So, you might not understand anything that he said, but the general idea is
that we have different priorities in litecoin dev. team, so we can spend our resources on
improving the code in the certain direction and then we might launch something thats little bit
different than bitcoin and if it works, and bitcoin sees and likes what we have, well push it
upstream and they can accept it. So, i think having both bitcoin team and litecoin team working
separately on different approaches, is good for both coins. So, we get all the good things that
the bitcoin dev. team is doing on bitcoin and they can get all the good things that were doing.
Obviously, different teams have different priorities and different politics, sometimes I head
stories that its hard to get certain things pushed into the bitcoin code because theres just so
many different opinions and its hard to convince all the bitcoin developers to agree on one
thing. The nice thing about litecoin is, were a little bit smaller, its just Warren, me and a few
others and it's easier for us to agree on something and go ahead and do it. So, in that sense we
can move faster than bitcoin and I think that helps out a lot with both coins.
WT: I again like to mention the so called bitcoin OMG client that you can find on the bitcointalk
forum thread. It is an enhanced version of the Bitcoin reference client, where it is everything
that is litecoin but it is the bitcoin protocol, the latest version includes all of the bug fixes in
Bitcoin 086, plus coin control, disable wallet and a number of other features and they were
actually tested in bitcoin OMG before the release of bitcoin. So, that helped to prove especially
the Mac OS corruption fix, it took several variations of those patches to figure out what would
actually work to fix that issue.
SM: Is there anything else you want to add?
CL: I think that litecoin is kinda reached a stage where theres no turning back, its just gonna
happen. So, I'm really excited about whats gonna happen with litecoin, we gonna see more
exchanges supporting it, payment processers and more merchants, its very exciting time.
Looking forward to see, what everyone else is doing on top of litecoin.
WT: I'm excited to see that the community has organized around the Litecoin Association, as an
education arm of the litecoin ecosystem, to help protect users and to guard against
centralization and to improve security. On the development side it's our plan to eventually have
a separate foundation and this is been a long time in the making because of were in
negotiations with different allies and the goal of our eventual foundation, will be the
advancement of technology of bitcoin, litecoin and related cryptographic time stamping
technology, there exists today already a prototype of time stamping any file, an unlimited
number timestamps without bloating a blockchain, that has the capability of revolutionizing all
kinds of other industries and creating a powerful reason, that is nonfinancial for bitcoin and
litecoin to exist and wed like to help to advance the technology of that as well, because it has
applications in the financial industry, in the security industry and legal, to prove things that
were not modified from the timestamp, like a month in the past, 10 years from now, 100 years
from now, that can launch an entirely new industry of software. It so turns out that litecoin may
actually be more suitable than bitcoin for that application, because we have finer grained time
standing abilities.
SM: Charlie Lee and Warren Togami, thank you so much for talking with me today, I appreciate
your time. Where can people find information about litecoin and about each of you personally
if they wanted in touch with you?
CL: Visit us at wiki, litecoin.info, INFO which has all the information you can found about
litecoin. Theres a litecoin.org site that explains a bit about litecoin and where you can
download a client. If you wanna send me an email, you can send to me at coblee@litecoin.org ,
COBLEE@litecoin.org.
WT: You can also ask for help at the litecointalk forum, if you want to contact me, just find me
on the forum. I'm Warren on the litecoin forum.
SM: Thank you so much.
CL: Thank you.
WT: Thank you.


Credits
ABL: Thanks for listening to episode 71 of Let's Talk Bitcoin.
Blockchain.info was produced by Andreas Antonopoulos, edited by Adam B. Levine and
featured Nic Cary and Andreas Antonopoulos.
Litecoin Standup was produced by Stephanie Murphy, edited by Adam B. Levine and featured
Charlie Lee, Warren Togami and Stephanie Murphy.
Music was provided by Jared Rubens and Calvin Henderson,
Questions or comments? Email adam@letstalkbitcoin.com
Have a good one.