Coinbase hires Charlie Lee, creator of Litecoin

http://blog.coinbase.com/post/56906034176/welcome-charlie-lee-creator-of-litecoin-to-the-team

by FredEE • 13 years ago

86 51 13 years ago

blog.coinbase.com

mikemoka• 13 years ago

I can't be convinced that bitcoin is anything but inevitable, and I think that it will, at some point in the near future, solve its apparent problems by means of a company born from its very ecosystem

dragontamer8• 13 years ago

BTC is going to have issues as long as it takes a significant period of time to confirm a BTC transfer. I'm seeing reports of people trying to buy coffee, but the BTC transfer takes so long to confirm that the customer is long gone before you know whether or not the BTCs really transferred.

Nothing can stop this either, it is innate to the system. BTC confirmations will take on the average 10minutes, but can last much longer in practice. Attempts to mitigate this issue only result in rebuilding credit-cards / accounts / virtual money systems on top of BTC... which then begs the question... why not just use a Credit Card as always?

Litecoin tries to solve the problem by making the block discovery process much quicker (among other things). These "virtual coins" will need to go through several revisions before they're really useful.

marcell2• 13 years ago

Credit card transactions can be reversed weeks/months after they are made. This is necessary to combat fraud, and is part of the reason why fees around 2% exist. In contrast, bitcoin transactions are infeasible to reverse after a few hours.

That said, anything on the order of minutes is obviously too long to wait for certain types of transactions. Litecoin, with a target of 2.5 minutes between confirmations, does nothing to solve this. Bitcoin/P2P cryptocurrencies will need a solution for this problem if they are to be used for in person sales at retailers.

cgore2• 13 years ago

If it is a coffee, just accept it at the first block, that should only be a few minutes. For the rare occurance of an orphaned block, it is still less of a loss than the normal credit card processing fees for a typical day at such a place.

baddox• 13 years ago

Attempts to mitigate this issue only result in rebuilding credit-cards / accounts / virtual money systems on top of BTC... which then begs the question... why not just use a Credit Card as always?

Because you can have the benefits of both worlds.

TomGullen• 13 years ago

Can't there exist a company that accepts Bitcoin transactions on behalf of clients (shops) and guarantees them? Even if a transaction fails, the company coughs up, and to make ends meet they charge a small per-transaction fee.

Even without this, it's quite possible that bad bitcoin transactions will be far less costly to shops on average.

If a shop sells a coffee for $2 paid for by a bad bitcoin transaction, the shop seller has made around a 50c loss (stock mainly).

If a shop sells a coffee for $2 paid for by a later charge backed credit card transaction, the shop seller is charged $15[1], plus the 50c stock loss for a net $15.50 loss! You'd have to have over 30 bad bitcoin transactions to equal that level of loss.

Chargebacks are a money making operation by the credit card companies, at the expense of merchants. Bitcoin helps a lot.

[1] https://stripe.com/help/disputes

SmokyBorbon• 13 years ago

I do not think you sufficiently understand Bitcoin or double spend attacks work.

You should read this section of the Bitcoin FAQ: https://en.bitcoin.it/wiki/FAQ#Do_you_have_to_wait_until_my_...

jjsz• 13 years ago

Any modern store would have an API that allows you to schedule a pickup through a mobile app and use Bitcoins as long as you schedule it 30 minutes to an hour before you arrive. What is this mentality Q2-2013?

richcollins• 13 years ago

You can just wait until its in the memory pool of some trusted nodes. Double spend risk on coffee isn't worth waiting for a block.

gigq3• 13 years ago

There is the concept of green addresses (https://en.bitcoin.it/wiki/Green_address) to solve this. Basically if customers use a wallet that the merchant trusts not to commit a double spend then they can safely accept a zero confirmation transaction. MtGox and Bridgewalker (https://www.bridgewalkerapp.com) support this so if you trust them and your customer uses them then you can accept the transaction immediately.

Of course for something like a cup of coffee or even a purchase for $80 worth of clothes I think most companies would be fine with accepting a zero confirmation transaction and taking the risk as it will be far less of a cost then shoplifting and will be less than the 2% they currently pay on every credit card transaction. If you are buying a $1000 laptop then maybe they make you hang out while they explain the features and wait for a single confirmation.

bdcs3• 13 years ago

"Confirmed" has two definitions depending on if you apply it to credit cards or Bitcoin:

1 "Confirmed with a certainty that's good enough for values less than 10,000USD" )

Credit cards are good for this basically instantly... unless the register is "taking longer than normal today." It is on the order of seconds. Notice that PayPal doesn't accept credit card payments over 10K AND takes a large percentage. The same is true of Escrow.com, for example. Wires (SEPA in eu) take several hours, but are much more used at these amounts.

With bitcoins, this is true once 90% of the nodes have a transaction in their memory pools which ALSO happens to be on the order of seconds (you can watch propagation of transactions on blockchain.info)

2 "Truly irreversible")

This level of confirmation is true of credit cards after, usually, 180 or 270 days. Whereas with Bitcoin this is true after 4 or 5 confirmations (~40-50 minutes).

Bitcoin's speed gets a bad rep because it is held up to definition #2 and credit cards are only held to a standard of definition #1. This whole non-sense about litecoin solving ANY problems is just that: nonsense. The some members bitcoin community clamored for bitcoin to decrease the confirmation time, but the core devs knew it wasn't necessary. In fact, Charlie Lee, in an effort to satiate these requests created an altcoin, Litecoin, to confirm faster, so that the discussion of bitcoin could regain its track.

TL;DR: Bitcoin is very much confirmed within seconds, just like credit cards. Litecoin's faster confirmation time contributes very little (unneeded) benefit.

kaonashi• 13 years ago

BTC can function perfectly well as a supplement to traditional currencies, but it cannot replace them. The needs for currency by the private economy is not fixed, tying an anchor around your political ability to respond to those changing needs is not wise. I can count the number of incidents of runaway inflation on one hand, whereas incidents of runaway deflation are much more common and persistent.

yapcguy3• 13 years ago

"Creator" of Litecoin - is this some kind of joke?

Litecoin is a trivial fork of Bitcoin. Litecoin uses scrypt instead of SHA256 for proof-of-work and the total number of coins is 84 million instead of 21 million. That's it!

t0• 13 years ago

https://github.com/litecoin-project?tab=members

enraged_camel• 13 years ago

How does it feel to be so embarrassingly ignorant all the time?

Simucal• 13 years ago

What are some other differences?

yapcguy3• 13 years ago

So if I fork Bitcoin by changing the hashing algorithm and tweaking a parameter, am I suddenly a "creator" too? Get real. This is an insult to Satoshi Nakamoto.

bdcs3• 13 years ago

Charlie Lee is well aware of this. He created Litecoin to stop endless requests to change bitcoin to a faster confirmation time, even though the benefits are scarce.

yapcguy3• 13 years ago

Coinbase touting their new hire as a "Creator" is a bit much. Nothing wrong with what Charlie has done, good luck to him.

nullc3• 13 years ago

He didn't even write the scrypt integration, IIRC Artforz (author of the first GPU mining code) did.

But hey, there sure were a bunch of lines of code changed to change the name! :P

Sealy• 13 years ago

I hope that this does not have a detrimental affect to the future development of Litecoin.

For most, Litecoin to Bitcoin is seen as what Silver is to Gold. Silver in this sense is credited with its ability to stabilize the price of gold. My opinion is that if there is to be a future for digital currencies there must be more then one option available. Currently Litecoin is the leading alt-coin based on Market cap (which is linked to its value)

Disclosure: Bullish on both BTC and LTC

eru4• 13 years ago

How does silver help stabilize the price of gold?

bredren• 13 years ago

Hey, this is pretty awesome. I changed from Authy to Google for my 2 factor on, which made things more convenient. Passion for crypto and ability to measurably improve Coinbase.

It will be interesting to see if support for Litecoin takes hold at Coinbase.

nazgulnarsil2• 13 years ago

Just a FYI: Litecoin does NOT confirm faster than bitcoins. Based on how the core bitcoin protocol works (which litecoin does not alter), a halving in confirmation time is also a halving in reliability of the confirmation.

pat2man• 13 years ago

Well I think the argument is that the reliability is increased by using scrypt instead of SHA256 which makes it harder for someone to control more than 50% of mining and that the result is about even.

gigq3• 13 years ago

In practice it doesn't seem to matter. For example btc-e.com who accepts both bitcoin and litecoin for trading makes you wait 3 confirmations for bitcoin and 6 confirmations for litecoin. So you are correct that 1 litecoin transaction is not as reliable as 1 bitcoin transaction but they are not making you wait 12 litecoin transactions.

Given that btc-e has a lot to lose on double spend attacks I think it's a good measure of how these two currencies are playing out in the market.

nullc3• 13 years ago

The propagation times are very important here. You can get away with faster if and only if the network communications latency is low enough.

If blocks are too fast you start getting very large reorganizations.

Today litecoin has almost no transactions, so its lower interblock time is not a problem... Yet.

hvidgaard3• 13 years ago

How is that? My understanding is all it does is slightly reducing the time it takes to successfully make a 51% attack, and slightly increase the risk of orphaned blocks.

The reduction in time to perform a 51% attack is countered with just a few more conformations.

makomk• 13 years ago

Not really. The design of Bitcoin assumes that an attacker doesn't control more than 50% of the total mining power. If that's true, the level of protection provided by N confirmations decreases exponentially as N increases and is essentially independent of the confirmation time. This is all in Satoshi's original whitepaper.

If an attacker does control 50-plus percent of the total mining power, you're basically screwed. Increasing the total confirmation time doesn't increase the cost of a 51% attack by enough to be worth attempting.

gigq3• 13 years ago

Is anyone else surprised that the creator of Litecoin needed to take a job? Given that the market cap of Litecoin is 53 million I would have expected the creator to have mined a good amount of that in the early days.

Of course he may have just wanted to take the job and not needed it but I would have assumed he would have worked on something for the Litecoin ecosystem.

hvidgaard3• 13 years ago

Perhaps the job is an opportunity for Litecoin that he would otherwise never have hoped to make happen?

eru4• 13 years ago

Perhaps this job will help him make Litecoin more valuable?

Coinbase hires Charlie Lee, creator of Litecoin

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