After discovering Bitcoin, many begin to wonder if a new altcoin might surpass Bitcoin, the way that Facebook eventually surpassed Myspace, Friendster, and those other social networks nobody remembers. At The North American Bitcoin Conference in Chicago, Charlie Lee, Litecoin creator, took the time to explain to people the rules they need to follow to create a successful altcoin or digital currency. With a highly over-saturated altcoin market, Lee does a great job on explaining how developers need to look at currency creation rather than the current state.
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Of course, Lee understandably gave his speech from the perspective and data of Litecoin. He wanted to use his experience to pass on advice to other potential developers looked to get their altcoin out into the world and, hopefully, to become successful.
Though his lighthearted speech was occasionally barraged by rogue tweets appearing on his desktop, he shared some pretty valuable information for aspiring creators and developers. Condensed to five easy steps, he laid out the successes of Litecoin and urged people to copy the fundamentals rather than the protocols and algorithms.
His five steps were as follows:
1. A Good Name
Lee created Litecoin because he wanted it to be a light version of Bitcoin. Litecoin was created to be faster, cheaper, with lower fees. He wanted to improve on the coin as whole, but wanted to be a completely different end-product. Because of that, a Litecoin needed a name to reflect this sentiment.
Other coins like Darkcoin and Dogecoin has seen success in this area. Darkcoin reaches toward the anonymity market while Dogecoin keeps things fun. Both names reflect their mission statement, and each coin has seen a reasonable amount of success in their short lifespan.
2. Excellent Branding
Along with the name, branding was something that Litecoin wanted to tap in on. Lee wanted the coin to be the silver to Bitcoin’s gold. The coupling made sure consumers psychologically brought together that Litecoin was a valuable, cheaper currency that would always be said in the same breath as Bitcoin. Another coin could come out like a copper coin to Bitcoin's gold, but as Lee said, “who the hell wants copper?”
3. Attract Miners
A big point that Lee wanted to push home was to not compete with Bitcoin. Litecoin’s miners don’t have to worry about competing directly with Bitcoin in this aspect, making it a positive investment in the long run.
“There can only be one cryptocurrency in the same mining platform,” he said.
4. Have a Fair Launch
Lee’s advice was to follow Litecoin’s steps: withhold the genesis block, allow users to play with it on testnet and don’t premine it. Premining is a big taboo in the industry, and Lee advises creators and developers to stay far away from this practice.
5. Don’t Change What Isn't Broken
One of the big ideas Lee wanted to get across was the idea to not compete with Bitcoin. That was his platform when creating Litecoin, and it served him well. This idea to separate the coin’s presence from already successful coins fosters creation and furthers innovation, and is something Lee credits to the success of Litecoin
Litecoin Moving Forward
Lee speculated that as digital currencies move forward, they go through five stages of evolution. While all coins he speculates are in the early stages of development, he mapped out a simple scale of success and pinned altcoins, Bitcoin, and Litecoin on the scale.
- Miners - All other altcoins
- Speculators - Litecoin
- Merchants - Bitcoin
- Mass Market Customers
The positives of Litecoin are obvious and it seems that Lee only believes in digital currencies that bring something new to the table. Hopefully developers will look at Litecoin’s steps of progression and create coins that push the envelope, rather than those that are pump-and-dump schemes.
Featured image from Shutterstock.