In a new speech, Litecoin creator Charlie Lee lays out the unique characteristics that give cryptocurrencies inherent value that outshines fiat.
At Blockchain Cruise 2018, Lee gave four overarching reasons why crypto has value:
• Censorship Resistance – Governments can’t control it
• Transaction Immutability – Transactions can’t be reversed
• Cost of Production – Coins can’t be copied and they cost money to create
• Fixed Money Supply – Supply can’t be increased
Lee says that above all, the first point on the list is what got him interested in Bitcoin in the first place.
“Online poker was a huge business back in 2011 – I think estimated as a $10 billion business. It was actually cutting into Las Vegas gambling profits, from what people were saying. And then on April 15th of 2011, I went to my favorite poker website, pokerstars.com and I saw this.
What happened was the US federal government on that day shut down all major US poker sites… When that happened, I was thinking to myself, this is really sad. This is my money. Why can’t I use it to play poker online? Poker is legal. It’s a game of skill. So there’s something screwed up, right? A couple months after that, I found out about Bitcoin. Bitcoin is not controlled by any governments. It’s not controlled by any corporations. And it’s basically – it’s about freedom of money.”
The idea that ‘Bitcoin can’t be blocked from spending’ has incredible value in and of itself, Lee points out.
Anyone who has ever had a bank or financial institution freeze a payment, stop a check and prevent a simple transaction from being processed can imagine why a peer-to-peer cash system has a lot of value in the digital age.
The implications are far greater than online gambling, and help place the current speculative nature of the cryptocurrency craze into perspective.