Today is the day, Litecoin’s 10th anniversary. Congratulations to Charlie Lee and everyone involved in the project over the years. We are exploring Litecoin’s history through the eyes of its creator. We covered its fair launch, the long-hard road to exchanges adopting LTC, and we introduced the SegWit story. It’s time to finish it.
The last time, we introduced Bitmain’s co-founder Jihan Wu. Reportedly, he was singlehandedly stopping SegWit adoption in the Bitcoin blockchain. Lee’s plan was to use Litecoin as a Testnet of sorts for SegWit. “I realized that here’s a chance for Litecoin to do something to help Bitcoin. If we can get SegWit on Litecoin, it can clear out all the FUD and prove that SegWit is safe and a good upgrade for Bitcoin.” To accomplish that, he had to convince miners to side with him and not with the manufacturer of the most efficient ASICs.
Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course
According to Coindesk, there was another important incentive for Litecoin to adopt SegWit:
“Since SegWit could potentially pave the way for technologies that expand the value proposition of cryptocurrencies, the move toward accepting the upgrade has reignited excitement around the normally less-popular cryptocurrency. Litecoin’s price has nearly tripled since the end of March as a result.”
And this is where today’s story starts.
LTC price chart for 10/13/2021 on FX | Source: LTC/USD on TradingView.com
Charlie Lee Talks To Litecoin‘s Miners
During the end of 2016 and the beginning of 2012, Lee talked to everyone. One of his first victories was to get “Innosilicon, another LTC ASIC maker,” to his side. In this part of the story, we can see how hard Jihan Wu was playing. A “huge LTC Miner” was ready to signal for SegWit in principle, but, since his machines were in a farm controlled by Jihan Wu, he was afraid that he might lose access to cheap electricity.
Innosilicon was immediately on board with SegWit. They agreed with me that it’s the best path forward. And they were able to convince some of their customers to support SegWit.
One of their customers was a huge LTC miner. He owned about 5% of the hashrate. Having him was huge.
— Charlie Lee (@SatoshiLite) October 8, 2021
The objective was to get “75% of blocks signal for SegWit within a 2-week timeframe.” Easier said than done. LitecoinPool was the first great pool to side with SegWit. Another big mining pool, F2pool, also promised to do it, but they didn’t right away. This turned out to be great for the cause because they provided a clear signal that the market supported the SegWit transition. Lee narrates, “over the next month, F2pool actually flipped flopped. They would signal and then stop signaling. The market reacted accordingly. When F2pool started signaling, the price will go up, and vice versa.”
To complicate things, “Jihan wanted me to personally visit him and the miners in China to convince them about SegWit.” Lee didn’t like the power-play, but that was nothing. As more and more miners signaled for SegWit, Jihan turned to the ace up his sleeve. There was a rumor that “Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade.”
Over the next week, more and more miners started signaling for SegWit and it started to look inevitable. And then this happened. Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade. 😡https://t.co/Zvs9srExJJ
— Charlie Lee (@SatoshiLite) October 8, 2021
It was time for Charlie Lee to call in the big guns.
The User Activated Soft Fork
Since both the miners and the market were clearly signaling in support of SegWit, Charlie Lee felt he had the right “to pull the UASF trump card out.” One of the wonders of decentralized organizations is that the users can also activate a soft fork. “If the majority of users and exchanges run the UASF code, SegWit will activate.” If that happened, miners had to comply and adopt SegWit as well.
UASF stands for User Activated Soft Fork. What it means is that instead of having the soft fork (SegWit) being miner activated, the user decides to activate the soft fork in a future date. If the majority of users and exchanges run the UASF code, SegWit will activate.
— Charlie Lee (@SatoshiLite) October 8, 2021
The threat of a UASF was too much to bear, so the miners agreed to meet with Charlie Lee online and work things out.
Yes we will do roundtable online with @SatoshiLite ASAP, not need to wait for June. https://t.co/rVWQjLu5kJ
— Jiang Zhuoer BTC.TOP (@JiangZhuoer) April 20, 2017
And the rest is history, “On April 21, I met with Jihan, Innosilicon, and miners for over 8 hours IIRC. It was exhausting.“ They reached an agreement, this is the blog post announcing it. Among other things, it says:
“We agree that protocol upgrade should be made under community consensus, and should not be unilateral action of developers nor miners. We advocate that Litecoin protocol upgrade decision should be made based on the needs of the users, through the roundtable meeting voting process, and activated by miner voting.”
Charlie Lee reflects, “Although this seems so bad for a decentralized cryptocurrency to have a closed door meeting to make decisions that affect the future of Litecoin, I felt like it was a compromise I’m willing to take. It’s better than an all out war between the miners and I.”
On May 10th, 2017, SegWit was activated on Litecoin.
SegWit has activated on Litecoin! 💥😁 pic.twitter.com/lpeklpQpZe
— Charlie Lee (@SatoshiLite) May 10, 2017
After that, a few historic transactions took place
“A lot of people have been saying that segwit is unsafe because segwit coins are “anyone-can-spend” and can be stolen. So lets put this to the test. I put up $1MM of LTC into a segwit address. You can see it’s a segwit address because I sent and spent 1 LTC first to reveal the redeemscript.”
- A few months later, Bitcoin activated SegWit through a UASF. “It’s hard to know exactly how much Litecoin helped with this. I feel like it definitely has helped.”
- Days later, Charlie Lee and Strike’s Jack Mallers starred in the first Lightning Network request/ payment transaction on Litecoin. That man Jack Mallers has a way to get involved in historic transactions, like this one, and this one.
- That same month, Lee did his first Atomic Swap transaction. “This shows how one can move coins between different chains in a decentralized way. It was a great proof of concept and paved the way for decentralized exchanges.”
- And later, he did another Atomic Swap but this time with Bitcoin.
- And the next month, Lee did “the first ever cross-chain swap between BTC and LTC via Lightning.” This time it was with the now world-famous Lightning Labs.
Related Reading | Binance Burns Record $600 Million BNB In Its 15th Quarter
Wasn’t that an amazing, amazing story? We learned so much. And, even though we said this was the last chapter in the Litecoin 10-year history, Charlie Lee has another story to tell. Join us tomorrow for the infamous story of Charlie selling all of his Litecoin. Another legendary moment in crypto land.
Featured Image: Charlie Lee's picture from this tweet | Charts by TradingView
