Litecoin Case Study – Understanding What, Who, Why, When, and How - Part 3 (What, Who, Why)

So we continue with our case study on Litecoin. It seems like there has been some recent development in this space. Mostly the recent announcement that Litepay is no longer up and running as originally predicted. This was an incredible opportunity for Litecoin because of the potential strategic relationships it had arranged with Amazon and Starbucks which had announced this potential partnership.

As a reminder, most of my post will be dedicated with research that I’m conducting for that specific ICO. For the last three posts, I’ve been focusing on Litecoin? Here is what googling on the internet produced. Note, I’m sure most of you who have been watching CNBC, MSNC, Money, Coindesk, blockgeeks.com and all other media channels already know about Litecoin.

Question: What is Litecoin’s potential?

Summary from last week:
• We focused on Lightning Labs/Network and what they have been doing in trying to accelerate the utility of Litecoin and Bitcoin.
• The creators of Lightning labs are some of the most successful start-up investors.
• $2.5M was raised to help facilitate the creation of Lightning Labs.
• Lightning Labs has a focus on adding a second layer of network that would allow Bitcoin and Litecoin to be transacted in a faster and less expensive manner than it currently is being done.
• Lightning Labs was focused on utilizing SMART CONTRACTS for Bitcoin and Litecoin which was very much up the alley of Ethereum’s path.
• The Lightning Lab’s team isn’t that impressive except for one of their advisors who was the founder and creator of BitTorrent. The other members of the Executive team were not that impressive to suggest that they would have an edge.
• Lightning Labs suggests that there was demand for ICOs that would be used on a day-to-day utility.
• Today’s post will focus on Litepay, and what that platform was offering before it announced its shuttering on Monday March 26th.

What was Litepay?
• Litepay was a platform that was focused on providing daily transactions with local retailers.
• Litepay aimed to deliver “the world’s first borderless payment network,” hoping to be a turning point for cryptocurrencies and in particular Litecoin.
• The payment network would allow users to have a Litepay debit card, meaning that anywhere that accepts debit cards you would be able to spend your Litecoins.
• “Merchants will be able to accept Litecoin (LTC) without worrying about the current price volatility in cryptocurrency. When you spend Litecoin at the store, LitePay instantly converts the Litecoins into the local fiat currency and deposits the money into the merchant’s bank account.”
• Litepay was founded by Kenneth Asare, CEO.

• Litepay announced that they had some strategic partnerships that were being lined up where you could transact Litecoin with Amazon and Starbucks but a lot of this was speculation that it was Litecoin. These were rumors that were not substantiated and because there was enough rumor milling, the idea that Litecoin would be adopted allowed Litecoin to really take off or mitigate some of the sell off that Bitcoin was experiencing in Jan/Feb period.
• Its amazing how much the Litecoin audience lapped this up and took it as truth.
• However, not much was known about Kenneth Asare.
• There was some chattering that Charles Lee was endorsing Litepay but I’m not sure if he has given money directly to him. What we do know that Litecoin Foundation did sponsor Litepay. And we know than Charles Lee had taken up duties within Litecoin Foundation after he began selling his Litecoin holdings.
• In the March 26th announcement, Litecoin foundation announced/released a statement that the exciting new payment option for Litecoin was abruptly shutting down and ceasing all operations.

• Litecoin is the 5th ranked cryptocurrency by market cap. The statement went on to say that Kenneth Asare was unable to detail where the money that he was spending was going and was operating in a less than transparent nature. They were unable to give him any further funds due to this and That he refused to go into further detail about the company or show any objective evidence to back up his statements.
• Following this announcement, Litecoin dropped a further 10%, it is currently sitting at $147.84, and it is down roughly 37.5% for the year so far.
• In digging into the Litepay, I looked at some Reddit posts, and they were disturbing. It looks like there were lots of red flags (privacy policy was a straight copy and paste from coinbase), there were issues about transparency and staffing. All this to suggest that this was a straight up scam.

• Charles Lee has apologized publicly for the endorsing of this.
• Given Charles stature in the ICO community, this was a heavy blow to his reputation.

• Litecoin as of April 8, 2018 is at $117.
• This is a good Segway to highlight how Lightning Labs and Litepay are very different.
• I think Lightning Labs has some legitimacy however, Litepay seems to over promise and under deliver on a perfect solution to the Cryptocurrency world.
• There are too many variables at the moment that Litepay would need to overcome in order for a payment platform to take off.
• But what Litepay offered was the holy grail!

Key Takeaways:
• Litepay was great in concept but showed the challenges of a platform that at the end of a day was a complete scam.
• This scam was even more magnified because Charles Lee (the founder of Litecoin) went along with it, allowing the broader community to get sucked into the lie.
• What Litepay offered might come at some point. And if big retailers like Starbucks (2nd largest fast food franchise in the world) and Amazon to be partners, you bet that the traction to the space will accelerate.
• Let’s not discount that Starbucks and Amazon and Walmart and other large Big retailers not adopt a ICO. And when that happens, the rebound or upsurge of the ICO will take off.
• The future is bright for Litecoin, however, it might require more time and resources for the realization of Litecoin to be the choice of daily use for cryptocurrencies.
• If Litepay or anything similar were to show up again, it would be wise to not go off Charles Lee’s endorsement. But then again, maybe he has learned his lesson and not be so quick to endorse without doing more work.

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