Litecoin: A Peaceful Protocol

Litecoin can offer something to the world that never existed before Bitcoin was created. The ability for money to be backed by something other than governments, guns, or commodities (oil/gold). For much of mankind, money required some type of centralized service to operate. Whether it was the treasuries of the Roman empire, the modern banks down the street, or the gold at Ft. Knox. They all required at least a modicum of centralization. Centralization ultimately leads to all sorts of problems. Even the gold standard was eventually abandoned because it wasn’t decentralized enough, didn’t scale, and was co-opted by fiat governments that didn’t want to be tied down by the yellow rock.

These problems do not exist with Litecoin. Many Proof-of-Work currencies have a similar ecosystem, but we are going to focus on Litecoin here. The centralization problem has been fixed by a decentralized internet protocol. One of Fiat’s largest problems is that it leads to inflation and possible hyperinflation, you don’t have that problem with Litecoin. The supply is maxed. Another problem with Fiat is that it needs to be backed by the full faith of the government. This typically includes an army that is ready to defend the fiat currency itself. Because the fiat money is centralized, issued and deployed by the government, it needs to be defended. Without defense and trust, the fiat money could fail rather quickly. People on the fiat standard need to believe that the money has a rather consistent form of stability. If it is threatened and not defended, trust could evaporate quickly. Fiat governments that are corrupt or weak in leadership, typically have weak fiat money. The fiat money goes through many changes and can be affected by those in charge. People make mistakes. Bad decisions lead to bad outcomes. Computers make less mistakes. Once again, you do not have these types (poor decisions) of problems with Litecoin. The rules are set, the inflation schedule has already been deployed, and it cannot be sabotaged. It is defended by miners, not by politicians or standing armies.

You might have to have armies to defend other things like property rights, invasions, cultural identities, land, customs, religions, and physical structures. But we’ve never lived in a world where the money doesn’t have to be protected by significant defense mechanisms. Fiat systems need to be defended. Even the gold standard needed defense so that no one could steal and plunder the gold. Pirates exist, or at least they existed. Now you have hardware devices and full nodes. Taking the money by brute force was always an option for an opposing country or army. Basically, just overwhelm the opposition, steal the resources and the money. Stealing Litecoin on the other hand, is going to be much harder and look a lot different. That LTC money is in the hands of plebs. Spread out to whoever chooses to join the network.

Imagine trying to take everybody’s hardware device on an individual level. Going door to door across the globe would be an impossible undertaking. This is one of the best aspects of decentralization, the attack surface is much more spread out. Instead of shooting fish in a barrel, you’d be searching for one fish in the Atlantic Ocean. There exists something called the 51% attack, but if you run those numbers, it becomes increasingly clear that is just not feasible. A 51% could sabotage the protocol itself. You might in theory pull it off, but why would you? You’d ruin a crypto and have nothing to show for it. Another crypto could easily take its place. It is theoretically possible to 51% attack Bitcoin and decimate/rollback the BTC blockchain. It would take a phenomenal number of resources and coordination to pull it off. Some speculate it simply can’t be done. Even if you pulled it off, Litecoin or something similar could easily takes its place. The hash rate of ALL proof-of-work protocols would have to be considered. Not just a certain coin. The 51% attack would have to occur again, and again, and again. There are simply not enough resources to constantly and consistently attack these proof of work blockchains. So, if you play it out, what would be the point? There would be very few reasons to do so. Litecoin & bitcoin game theory has yet to be beaten, let alone punctured. The POW defense system makes the great wall of China look like paper mache.

Litecoin is a peaceful evolution. Many advocates tend to forget that not only is Litecoin an advancement in the money itself, but it’s also an advancement in the lack of need for conflict. It is fairer. In today’s system it is important to be positioned near the money spicket. Something known as the Cantillon effect. Not so much with Litecoin. Everybody has a reasonable opportunity to buy/earn/sell Litecoin. We all know that fiat systems are ripe with corruption. It’s a big game that you must figure out. And if you don’t, you could be poor. Much less mystery occurs with Litecoin. It’s open source, unlike fiat, you are privy to the information. Don’t let the alternative cryptocurrencies fool you. Some are just and trying to do new technological things. That’s okay. Others are complete scams, to be vilified. However, with BTC/LTC we see the code, we see the emission schedule, we know the inflation amount, we know the mining fees, we have what we need to operate an honest market. A freer free market. Think about how much capital misallocation has happened under antiquated systems. Much of that can simply go away because we now have an honest money that doesn’t require force majeure to retain its power structure. We are replacing standing armies with full nodes. The technologists are winning. That’s ultimately an advancement in human society. Litecoin is positioned to embrace a peaceful monetary policy.