Charlie Lee, the developer of Litecoin, spoke at the Money 2020 conference on Tuesday about how he developed Litecoin after being inspired by Bitcoin in 2011. He explains how cryptocurrencies, in general, are one of the better forms of money ever developed in the history of mankind.
During the conference, Lee explains how fungibility is one of the key reasons why privacy is needed in our present world. Lee takes his point forward by saying that money is meant to be spent, however, the user chooses to spend it and not and this is what makes it valuable.
In a comparison between Monero and Bitcoin, Bitcoin is not fungible as it can always be traced back to where it came from, he said. Hence, the Bitcoins received are not ‘fresh’ and if these Bitcoins were involved in shady transactions, the address for those Bitcoins can be blacklisted for avoiding future transactions.
However, in the case of Monero, the blockchain is opaque, as in, the transaction history of the coins can’t be looked up.
He further explains saying fungibility is the one good things that is missing from Bitcoin. Charlie Lee explains fungibility as two $200 bills are essentially one and the same. He then compares it to Bitcoin, which, when transferred to a person, allows the person to see the amount of Bitcoins the user has. He says that it is not a good thing when it comes to privacy and one shouldn’t be able to know how much money a person makes.
“Right now, there are some altcoins that are doing a lot of privacy-related improvements like, Monero [XMR] with RingCT, Zcash [ZEC] & Tezos [XZT],” said Charlie Lee. “New innovative technology is turning blockchain upside down.”
Speaking of the bad side of privacy, Lee takes Monero’s Bulletproof update, which makes transaction size 90% smaller, but still larger than Bitcoin’s transaction size, concluding by saying that “it doesn’t scale as well as Bitcoin”.
Charlie Lee says that he is really optimistic about the future of privacy in terms of cryptocurrencies and that there will always be a tug of war between privacy and regulations.