Litecoin founder Charlie Lee has warned investors against rushing ICOs many of which are behind white papers comprised of fancy tech jargon, promising the world and raising hundreds of millions of dollars in the process.
He urged investors to due their due diligence before investing in new coins, These coins will likely just go to zero,” he said.
Since bitcoin boom, hundreds of ICOs have been advertised on social media and Google Adwords. At a time, a buyer of the ICOs alleged that after buying Jgencoin one of the newest ICOs which is suspected to be scam going by its ads, “JGN price $0.85 after ICO $70. It will be x80 in a month.”
Lee, who was speculated to have manipulated litecoin price at time had to fight off the rumors.
“It’s quite easy for a founder to pump a coin and make it seem like it’s the latest and greatest and it will cure world hunger, and the price can go up to $10 billion. And it’s easy for whoever did that to cash out,” he said.
As a result, Lee in December, 2017sold his entire litecoin portfolio, with the exception of a handful of “collectibles,” to prevent what he said could be construed as a “conflict of interest.”
Litecoin to complement bitcoin
Lee said he came up with the idea of creating litecoin with the aim of complementing bitcoin.
“So my vision for litecoin has always been to complement bitcoin — to be the payments currency. Where bitcoin would be digital gold, litecoin would be silver. It’s more useful for payments. And bitcoin would be better for store of value,” he said.
Litecoin was created in 2011.
He also pointed out that litecoin is 4x faster than bitcoin for transactions. But a different POW algorithm won’t allow cryptocurrency miners to mine both coins, which removes a facet of the competition.
On Lightning Network, an underlying technology that will advance the payments sector, “So litecoin I think can find its own niche to help address payment fees,” said Lee.
Litecoin’s market cap at the time of publishing this is post was $8.7 billion (USD), with over 55 million in circulation; it has 84 million as maximum supply.