A controversial Litecoin hard fork will create a new cryptocurrency, Litecoin Cash (LCC), and it’s causing a lot of confusion among crypto investors.
Anyone who owns LTC ahead of the fork will automatically receive 10 LCC crypto coins, but the lack of transparency around the fork is raising red flags.
Our readers have a lot of questions and concerns leading up to the Feb. 18, 2018, scheduled Litecoin hard fork, including:
- Who is behind the Litecoin Cash hard fork?
- Is Litecoin Cash a scam?
- How do I claim my Litecoin Cash?
- Should I claim my Litecoin Cash?
That’s why, today, we wanted to address all these questions and concerns.
And the best place to start is with who is behind the Litecoin Cash hard forkand why they are forking…
Who Is Behind the Litecoin Hard Fork?
There isn’t a lot of information about the development team on the Litecoin Cash website, which is always is dubious.
The lead developer is listed as “Tanner.” The Litecoin Cash site says he has over 20 years of commercial experience, but we weren’t able to confirm his background.
The site doesn’t say what his experience is in, only that he’s been “active in the crypto scene since 2013.”
The rest of the Litecoin Cash team is listed as “Loxley” (Systems Lead), “Roger” (PM, Public Relations Leads), and Michael “Scarlet” Wyszynski (Design Lead).
We couldn’t find anything else out about these team members besides the vague descriptions on the site.
Wyszynski is also listed as the “Liason Lead,” a misspelling of “liaison,” which further heightens our skepticism of this operation.
And because of the lack of transparency about this team’s experience, some believe Litecoin Cash is a scam…
Is Litecoin Cash a Scam?
When developers and miners push for a cryptocurrency hard fork, it’s important to understand the reasoning behind it.
For example, the Bitcoin Cash hard fork occurred on Aug. 1, 2017, because Bitcoin Cash proponents were unhappy with Bitcoin’s high transaction fees.
It costs $2.94 to send Bitcoin, according to BitInfoCharts.com, which can add up across multiple transactions and weakens the case for Bitcoin to become a viable alternative to cash. The average transaction for Bitcoin Cash is just $0.15, which makes it much more useful for everyday transactions.
While some in the crypto community believe Bitcoin Cash was created just to profit off Bitcoin’s name, there was at least an understandable reason behind the fork.
However, as Money Morning Cryptocurrency Expert David Zeiler told me, Litecoin Cash seems to be trying to solve non-existent problems.
Zeiler was one of the first financial journalists to cover Bitcoin in 2011, and that’s when he first started mining Bitcoin, so he’s seen it all in the crypto world.
LCC says it will have lower transaction fees, but Litecoin fees are already low, at $0.33.
Litecoin Cash’s website also says it will offer “better difficulty adjustment.”
The difficulty level of mining a cryptocurrency ensures that not all coins are mined at once. For Bitcoin, the level of difficulty is automatically reviewed and recalibrated every two weeks.
For Litecoin, it happens every 3.5 days.
For Litecoin Cash, it will be adjusted each block.
That’s a change, but the average crypto investor isn’t clamoring for better difficulty adjustment, and there doesn’t seem to be anything wrong with Litecoin’s as it is.
The limited benefit of a Litecoin hard fork has crypto observers skeptical that the fork is merely a cash grab by the team behind it.
Tanner said he understands why people think Litecoin Cash may be a scam.
“There will be Litecoin forks that are scams. I absolutely understand why people are screaming ‘scam!'” Tanner said in a Feb. 9 interview with SmartOptions.io.
“If absolutely nothing else, we’ll be the ‘tutorial level’ for the Litecoin community, because we’re adamant that we’re going to teach people how not to get scammed.”
He may be saying all the right things, but the most prominent voice in the Litecoin community has a different take on the situation…
Now, receiving 10 free coins of anything sounds enticing.
After all, if you have 10 litecoins, you’ll end up with 100 LCC coins.
But before trying to claim your Litecoin Cash, here’s how you can do it, and whether it’s safe to do at all.
Here’s What to Do When Litecoin Forks
Claiming crypto coins after a fork is complicated.
If your Litecoin is stored on a hardware wallet like the TREZOR or Ledger Nano S, the easiest way to claim LCC is to move Litecoin to online wallets before the fork, according to the Litecoin Cash website.
That’s how you can access the private keys that are needed to claim LCC.
But sending your private keys out is risky because you could lose all of your litecoins.
Tanner from the LCC development team does warn Litecoin holders they need to practice safety when claiming their new LCC coins.
In a Feb. 9 interview with SmartOptions.Io, the LCC developer said, “At every step, we encourage ‘safe forking’. The golden rule is that you never, ever use a private key that holds live coins to claim fork coins – including ours!”
The best and safest way to claim LCC is to open two online wallets.
First, have your Litecoin stored in one wallet before the fork. Then after the fork, move it to the second wallet.
Use the private key from the old wallet to claim your LCC.
This strategy ensures no one will be able to use your private key to steal your Litecoin because the coins will be in another wallet. After the fork, you can transfer your new LCC to your new wallet.
And using Coinbase as a wallet won’t work either… if you have your LTC on Coinbase, as of right now, you would also need to move your Litecoin to an online wallet to claim LCC.
That’s because you can’t access your private keys from Coinbase, and Coinbase hasn’t made any indication they will give Litecoin owners Litecoin Cash.
Again, claiming a forked coin is complicated.
If you aren’t confident you can transfer your LTC to a new wallet and then send the coins to a different wallet after the fork, it’s not worth putting your litecoins at risk.
There’s no reason to use Litecoin Cash right now, as Litecoin is increasing in popularity as a payment solution.
That’s why we’re focusing on why Litecoin prices could continue to climb…
Charlie Lee created Litecoin to be the “silver” to Bitcoin’s “gold,” since it’s easier to spend silver than gold.
U.S. quarters were made with 90% silver before 1965, according to Wired.com.
“So you keep gold in the bank safe, but you would use silver daily. So a similar idea, where you would keep Bitcoin for its store value, but you may use Litecoin for daily purchases,” Lee said in an Oct. 4 interview with Mixergy.com.
With more people willing to use Litecoin for daily transactions, the demand for the coin can increase.
When demand goes up, prices climb too.
And we’re already seeing more adoption of Litecoin as a payment method…
Nash Basel set up the Crypto Café in January in Ireland, and he accepts Litecoin and Ethereum payments.
While a small café in Dublin accepting crypto payments may not make national headlines, remember that Litecoin was just released in 2011. If you told someone seven years ago people could pay for a cup of coffee with a digital currency not controlled by banks or governments, they would have laughed at you.
And now, there’s going to be even more businesses like Basel’s coffee shop accepting Litecoin…
On Feb. 26, LitePay Inc. will launch its Litecoin payment system.
This will allow businesses to more easily accept Litecoin payments, and it will also allow crypto enthusiasts to spend Litecoin on debit cards powered by Visa Inc. (NYSE: V).
Litecoin debit card users can use the cards at all ATMs or businesses that support Visa payments, according to Bitcoinist.com.
And this could be a boon for Litecoin prices. By Dec. 31, legal technologist Joseph Raczynski projects the Litecoin price will reach $350.
From today’s prices of $224. 38, that’s a potential gain of 55.98%.
*This has been a guest post by Money Morning*