Interview With Andrew Vegetabile aka The Mage on Litecoin, Bitcoin and More
Bitcoin has seen a resurgence. While things have come off their USD $315+ heights, after Greece delayed the seemingly inevitable at least one more time, Bitcoin has shown its first positive signs of consistent growth of the year. The currency certainly seems healthier than it did at the start of the year when it fell below $200.
It wasn’t the only cryptocurrency making news and profits either, Litecoin saw a massive rise in value, reaching heights it had not seen since September 2014. Unlike Bitcoin, its value didn’t hold consistently. Without a doubt, some people lost money buying Litecoin on the way down. However, it held above its previous levels as the increased attention seemed to legitimately grow the coin’s value.
Andrew Vegetabile, better known as “The Mage” is a Litecoin Association Board Member and is working on a not-yet released cryptocurrency exchange. He took some time out to talk to us about Litecoin’s success, if altcoins are in a state of revival, the Bitcoin blocksize debate and alts as a testing ground.
He also recently wrote an academic paper about the implications of forking a coin and compares a few incidents when it was instituted and when it was considered. It is a real nice read and worth checking out as well.
Ian DeMartino: Let’s start with the price of Litecoin. You guys were flying high there for a minute, almost to your previous peak. A lot of people have said it was because it mirrored bitcoin, but other alts didn’t have that much success. What do you attribute it to?
Andrew Vegetabile: I personally think its a multitude of factors that are involved in the price.
First and foremost, we have our first block halving coming up in ~40 days. I believe that this is speculation driven because it is such a large event to have the first halving, a milestone if you will. The other side of the coin (pun intended) is that there are quite a number of issues going on right now with Bitcoin between leadership and technical issues. The developers infighting with the 20MB discussions (which are really toxic for the community as a whole not just Bitcoin), the transaction spam attacks clogging up the network, and the recent Bitcoin forks that have happened.
Because of the issues with Bitcoin, I think a larger number of people are viewing Litecoin as a perfectly viable alternative to store value and hedge against Bitcoin until some of their issues are resolved. With that said, I believe that Litecoin compliments Bitcoin really well.
There is also other speculation that the turmoil in Greece is playing a factor, but I’m not too sure. I would have to see some sort of data showing that Greeks are buying cryptos/litecoin as a store of value.
Ian DeMartino: Litecoin crashed pretty hard after. Still, it is above where it was before the jump. While this is a pretty typical pattern of jumps in cryptocurrencies, do you have any theories on where it will go from here? Knowing, of course, that accurately predicting the price is impossible. But speaking in more general terms.
Andrew Vegetabile: At this point it is pretty hard to tell, I still believe the markets are rumbling. I’m sure most people have seen the “stages of a bubble” chart, so as you said a selloff at some point is to be expected.
As a matter of fact, before the drop, I tweeted the same thing. The expectation is that the new corrections will fall above the previous price, which so far is holding true. Later on, when we get closer to the halving, we may see the price uptick a bit more because of speculation, but at what price, I have no idea.
Ian DeMartino: Litecoin long ago put in safeguards against the kind of spam attacks Bitcoin is experiencing now, Charlie Lee has talked about it publicly. Has the Litecoin community noticed any ill-effects from the fix?
Andrew Vegetabile: We have not seen any effects from the rules that were put in place. If I know my Litecoin history correctly, we have not suffered an attack of that type again.
Ian DeMartino A lot of people, primarily bitcoin proponents who feel that there isn’t a future in alts, argue that alts can serve as a testing ground for Bitcoin, but we haven’t seen the Bitcoin Core developers adopt many features from altcoins.
While I’m sure you disagree with their stance that alts don’t have a future, serving as a test ground for bitcoin in addition to their efforts to becoming a viable currency in their own right, would be a good thing. What do you think needs to happen for the Bitcoin Core developers to begin adopting fixes from the alt community more readily? Is there anything the community can do?
Andrew Vegetabile: At this point in time, I don’t know if it will become a reality or if there is really anything the community can do to help nudge the Bitcoin developers in that direction.
Frankly, they can’t even agree right now how to solve the max block issue that is predicted to take place in the end of 2016. With that said, having the “keys to the system” via code and being responsible for several billion dollars is not something that should be taken lightly. The more changes made to the foundational core of Bitcoin, the more of a chance something bad could potentially happen.
Ian DeMartino: Do you have an opinion on the block size debate?
Andrew Vegetabile: I have been forming an opinion yes, but it’s still forming due to what little time I have dedicated to researching the topic. I am leaning towards increasing the block size as opposed to the sidechains suggestion for a few reasons so far (however I also recognize that might not be a final solution either). On a philosophical level, the purpose of the Bitcoin’s (or any coin’s) developers is to produce a foundation in order for others to build on for third party applications (perfect example, smart contracts). Having a company propose a solution to a fundamental problem and implement it scares me. What would happen if they fold up? Who would then be responsible to fix the problem? Will the code be open source for others to help pick it up? And for that matter, will the code be open source at all so we can have multiple eyes on it to ensure that 4 billion+ dollars are safe?
In addition, and this is by no means a knock to Blockstream at all, they have received $20 million in order to work on this (which companies do, they need funding). What I do not know is that how they will monetize this system to pay back their investors.
Lastly, from what little time I had to look into sidechains, I believe that it’s going to end up being more of a novelty than a solution to today’s woes. The step in the right direction so far, from what I have gathered, is an incremental increase in the block size.
Ian DeMartino: Litecoin has always had a dedicated core group of developers and the kind of fundamentals needed for a healthy network. But other coins have good developers and community and a lot of nodes and everything else.
There have been countless coins that have tried to knock Litecoin off of its perch. Dark/Dash, Monero, Blackcoin, they all have gotten pairs on major exchanges, but Litecoin still seems to be the most visible currency outside of Bitcoin with the possible exception of Dogecoin, which needed Litecoin merged mining to save it.
Other coins, it could be argued, have added more powerful features, Asset exchange and similar features, but they still haven’t gained Litecoin’s popularity.
What do you think makes Litecoin stand out?
Andrew Vegetabile: Simply put, I believe its a trust issue. We have had the advantage of being around for many years, and for all intents and purposes compared to other coins out there, we are one of the oldest.
In 2014 we saw the population of coins explode where developers forked other coins with little done to improve it in order to take advantage of possible monetary gains (pump and dump, as you will). There was a sense in the air that the community at large was getting burnt out from alts all together. Because of this, it may have turned them off of other viable and good alternatives.
Litecoin was never premined (the first 2 blocks were for testing), was released very fairly (where everyone had a chance to download the wallet ahead of time and the day of release, Charlie Lee gave a switch to a config file that allowed people to mine on the network), and Charlie is a well known public figure who is a strong advocate for Litecoin and promotes it at conferences. Obviously, not a knock to Satoshi or any other developers who are not public, but there are great advantages when you can shake the person’s hand who did the work.
We also have a great community who is passionate about the coin, and the Litecoin Association has stepped up within the last year to help wherever they can, not just for Litecoin, but for other communities as well.
Everything put together has really help solidify Litecoin as the defacto second cryptocurrency.
As a side note, I am also a very strong advocate for other alts. I have many friends within multiple communities such as Dogecoin, Blackcoin, Dash, Vericoin, Neoscoin, and more.
Ian DeMartino: 2014, like you said, had a lot of pump and dump and otherwise crap coins, but also a few really decent ones to, but one thing all around was price-wise it was really bad for alts.
Do you think the recent rise in Litecoin price in indicative of a larger trend of the altcoin markets finally showing some life again or would that be reading too much into it? Blackcoin, for an example, saw its market cap double recently as well, back in May.
Andrew Vegetabile: During the upswing with Litecoin I did notice that several other alts were having some amazing price increases. Peercoin yesterday, had a %60 24-hour price increase which was amazing! Very few coins had negative returns in that 24 hour period.
Strickly in my opinion, I believe this could be a catalyst that yes we will start seeing more activity in the altcoin markets within the coming months. But again with crypto who knows!
Ian DeMartino: In your paper, you talk about thefts leading to forks in PoS and malicious miners causing a fork in PoW.
I want to stick with PoS for this question because we have seen it first hand with Vericoin and the such.
There have been cases, of a coin community considering cutting out a person because they don’t like them. So, sort of a mix of the two scenarios mentioned in your paper. A malicious but legitimate owner of enough coins to influence the network is simply cut out of the network with a forked blockchain. [Paycoin’s community consideration of forking to cut out Josh Garza is an example of this.]
What do you think are the moral and legal (if you can speak on that) consequences of that?
Andrew Vegetabile: Interesting question, the original paper did contain blacklisting addresses but I decided it would have been very lengthy, so I cut that section out.
If a holder is a owner of coins of a network, and the network decides to fork in a way that would blacklist those owners coins, from a legal perspective it could go either way. The network is not taking those coins away, but rather the ability to utilize them. The coins still exsist on the older network apart from the fork and can still be used on that older fork. The exception here would be in the future, if cryptos were to become legal means of paying debt (from a US law perspective, since I am US based), taking that ability to utilize those coins might be an issue. So today, I do not believe there would be any legal standing to prevent this from happening.
Morally and ethically is another subject all together. And something that might have to be applied on a case by case basis. Was the reason simply because the person was someone a large number of people didnt like, or is that person someone who could influence the network and maybe even tried, in order to hurt everyone else? Or is there more to this hypothetical story?
At the end of the day, code can be provided for a fork and theoretically those individuals that make up the network decide collectivly. So perhaps if a coin forks to blacklist an address, then there potentially is justification for doing so on an ethical level.
We would like to thank Andrew for taking the time out to talk to us. You can follow him on twitter at @therealmage