Jain assumes that the LTC community has another aberration: namely the assumption that the low transaction fees can also be maintained in the future. However, Jain considers this unrealistic. The transactions would become more and more expensive due to the periodic halving of the block rewards. Although this is also the case with Bitcoin, it does not try to stand out by low transaction fees. LTC will reach its limits as early as 2028 when the number of transactions is no longer compatible with the network’s security mechanisms and low transaction fees:
„If the Litecoin community wants to maintain the current narrative „History of cheap transactions“ (currently 0.0008 LTC per transaction), the number of transactions necessary to maintain the security of the network will exceed the capacity of the network to process these transactions.
It is also a warning signal that Charlie Lee sold all of his LTCs in December 2017, at the height of the crypto-hypes:
„A founder who sells all his property is a massive red flag. Lee cited reasons such as decentralization, financial distance and other conflicts of interest for his sale. Despite his intentions, there is now a misalignment of incentives that reduces his motivation to develop the protocol further. To better achieve this goal, we would have liked him to have limited his holdings or used them to finance further LTC development.“
Jain concludes his cryptosoft analysis with a gloomy outlook for LTC:
„Litecoin has traded between $41 and $358 in the last 52 weeks. With an exchange rate of around 50 US dollars, we consider cryptosoft to be significantly overvalued. In the absence of a viable investment thesis, lack of positive catalysts and strong negative catalysts, we expect LTC to remain significantly underperfomed in the crypto market“.
Here is also the desire father of prognosis. Multicoin makes no secret of shortening LTC, i.e. the hedge fund speculates on a falling LTC price.
Charlie Lee shoots back at crypto trader
For this reason, Charlie Lee also dismissed Multicoin’s article as FUD gibberish circulated by interested crypto trader parties. In an eleven-tweet defense speech, he uses a similar format to Jain’s. Where Jain divided his argumentation into narrative (here: Is Crypto Trader a Scam? Read This Review Before You Sign Up!) and analysis, Lee first names the FUD statement and then his counter-argumentation („TRUTH“).
Lee counters Jain’s postulated lack of unique selling points in LTC with the fact that Litecoin has one of the most secure networks. The security is guaranteed by ASIC miners worth over 150 million US dollars, and LTC dominates the crypt mining market.
Jain’s argument that LTC could become osbolet through new solutions for the scalability of Bitcoin, above all the Lightning Network (LN), does not apply to Lee either: Many LN clients already support LTC because they know its value. Atomic swaps also make it possible for LTC and BTC to be compatible in the Lightning Network.
Lee replies to the statement that LTC as Bitcoin Testnet is not worth 3 billion US dollars:
„Even if Litecoin were to function exclusively as a Bitcoin test network, its value could never be expressed in absolute figures. You have to relate it to Bitcoin. LTC’s market capitalisation is only three percent of BTC’s market capitalisation. That’s not much at all.“
A conspiracy against Litecoin?
Lees Tweetstorm, half argumentation, half LTC advertising, concludes with his response to Jain’s accusation that he had dried up his lambs in December 2017 and has not cared about Litecoin since. Lee replies:
„I work full time for Litecoin and concentrate on the Litecoin adaptation. The proof: The fact that I spend time writing these eleven tweets!
Finally, Lee gathered his church around him:
„Litecoin also has the strongest crypto community.“
Even though Lee never explicitly refers to Jain: His replica obviously refers to the multicoin article. Whether a critical article is sufficient to speak of a „concerted action“ like Lee remains questionable.