It might be, but it doesn’t really matter whether or not it’s a scam.
OPINION: Litecoin LTC was sitting at around $225 at around 4am UTC, then spent the next half hour hiking up to $240, where it took a breather for about two hours before pushing on to the $250 summit, planting its flag in a new monthly high, and the highest price since 15 January.
It then clambered around the $240 plateau for most of the day, but the next time it rose above $250 it immediately slipped and fell, plummeting about 15% in the next two hours and landing on $220.
Just another day for Litecoin. The recent gains and volatility might be largely tied to the recent Litecoin Cash (LCC) fork, and corresponding airdrop to all Litecoin holders. It’s also attracted a lot of controversy in the Litecoin community, with Litecoin creator Charlie Lee calling the fork a scam.
However, it’s not a direct copy of Litecoin. It uses the SHA-256 mining algorithm which lets people use now-obsolete bitcoin mining equipment to mine LCC. This is a fairly useless function for everyone except owners of said mining equipment, and it seems fairly safe to assume that LCC was only created to make a quick buck, mostly through popping value into existence through an airdrop of 10 LCC for every 1 LTC a user holds.
Is Litecoin Cash a scam?
It’s a scam the same way Bitcoin Cash (BCH) and Bitcoin Gold (BTG), and to a certain extent bitcoin and Litecoin, are arguably scams. BCH and BTG are now the fourth and twentieth largest coins by market cap respectively, with a market over $25 billion between them, and over $800 million in 24-hour trade volume.
The bitcoin core community was also strongly opposed to the BCH and BTG forks, despite benefiting greatly from the anticipatory price rises and subsequent value of the airdrops.
A similar effect was seen with Litecoin Cash. Litecoin prices rose considerably in the days leading up to the fork, even as LTC users complained about the fork. Now that it’s forked, they’re complaining about receiving the free LCC airdrop.
Is LCC is a scam? No. It’s upfront and honest about only existing to make a quick buck, the same way many other cryptocurrencies are. But it doesn’t matter. Anything can have value if enough people believe in it. That’s how money works.
And with the potential to put their old mining gear to use, enough people might have enough incentive to give LCC value by believing in it hard enough.
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Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, XRB, SALT, BTC