There is a rumor swirling that a Litecoin-Facebook partnership is in the works.
Other than completely unsubstantiated assertions, of which there are many, we have the following to consider: a post from Charlie Lee, the founder of Litecoin, shown and linked below; this ZeroHedge article; and Charlie Lee’s selloff of his Litecoin stake.
Not much to go on, really, and far from any amount of evidence that would build a case. If you explore Twitter and YouTube, you’ll find many talking about the supposed partnership. I’ll leave that to you. For purposes of this post we’ll stick to the three points mentioned above.
Before getting to those, what would a Litecoin-Facebook partnership even look like?
When I heard about this, my first thought was: what the devil do people buy on Facebook? Yeah, that’s how hip I am, ha. I don’t spend much time on Facebook, and I don’t make payments on Facebook, but that’s not to say that many other people don’t, or that I won’t be doing the same in the future. So there’s a marketplace, and like, games and such? Also, ads, of course.
A few minutes of research later I discovered FB pay, which is a peer-to-peer way to send money over Facebook Messenger. Perfectly aligned with crypto…
Currently, you can send peer-to-peer cash on Facebook Messenger from debit card to debit card. If you integrate Litecoin or another crypto, you could send from wallet to wallet, and, potentially use the crypto to pay for various in-app purchases as well. Incorporating a crypto such as Litecoin into Facebook Messenger could help facilitate the peer-to-peer aspect of cryptocurrencies while enhancing it with a user-friendly interface and stored wallet addresses. This could make cryptos much easier to use for a lot of folks! Perhaps this would also be integrated with Coinbase, and you will be able to log in at Coinbase with your Facebook account, and vice versa. I wonder about the security and centralization risks of moves such as this, but they are certainly interesting.
Charlie Lee’s Tweet
This is the tweet hinting at future Litecoin developments:
There is nothing here pointing to a partnership with Facebook, although such a partnership would definitely fall within the category of huge unexpected surprises, so the tweet doesn’t write off the possibility. As a Litecoin hodler, I like the tweet, and I’m looking forward to official news, but there’s nothing here about Facebook, or any specifics about the other coming news. There is speculation in the tweet’s replies about Facebook, Amazon, and Alibaba, but it’s only speculation.
The ZeroHedge Article
The ZeroHedge article points out a comment to a related article, in which the comment writer says that Facebook asked Lee to divest his Litecoin holdings so that he can’t be accused of personal interest, and that Facebook is working on integrating Litecoin as a payment method. The comment writer points to the appointment of a Facebook executive to the Coinbase board as support for the latter, but the former, I imagine, is just conjecture.
I think these claims are highly unconvincing, but let’s consider them for a moment.
If Lee is working with Facebook to on-board Litecoin as a payment method, why would Facebook ask him to sell his holdings? This just isn’t how businesses work, so the comment loses me immediately. In a stock-ownership context, if you have stock in company A, and company B wants to partner with you, company B isn’t going to make you give up stock in A. You may be subject to various trading restrictions and trading disclosure requirements because you have insider knowledge, but it’s expected that when you’re working on a venture you may profit from it. Stocks are an incentive to management to perform well, or at least to hit the right targets set forth in the management compensation plan such as production targets, earnings targets, social responsibility targets and so forth.
And on the credibility front, does the founder of Litecoin have less credibility in his role of adding Litecoin capabilities to Facebook because he has some Litecoin holdings? Of course not.
I’m finding it very difficult to imagine a scenario where Facebook would ask Lee to sell off his Litecoin in a scenario where he’s integrating Litecoin, unless he’s also helping Facebook integrate other cryptos and there’s a perceived conflict, but, even then, I don’t think they would ask for this. If you’ve seen requests like this in similar contexts, please enlighten me via the comments below.
As to the bit about a former Facebook exec joining the Coinbase board, well, meh. It doesn’t necessarily mean anything, and if it does mean something, why would it benefit Litecoin specifically? Because it’s the fastest of the Coinbase coins? Yeah, in other words, not much here, so let’s talk about why Charlie Lee may have sold off his coins, since this is super-interesting.
Charlie Lee’s Litecoin Liquidation
Charlie Lee’s Litecoin selloff has resulted in both praise and disappointment from his fans. This is the explanation he gave:
I like the move, because Charlie Lee to me seems to have a very high level of integrity, and I accept his reasons for selling and donating his Litecoin stake. It’s his decision, and he certainly has had such a high level of success that making more money directly from Litecoin is not necessary for him to live an extremely comfortable life.
I do speculate that this move is related to work he’s doing on Litecoin, and his desire to avoid being seen as a sellout when he makes a large deal that takes Litecoin to the moon! If he has no Litecoin holdings and he partners with a company such as Facebook, and Litecoin goes to 4 digits, it will be easier for him to defend this move as being for the benefit of the Litecoin ecosystem, rather than largely for his own benefit. And I’m sure he will be paid in other ways, as he hints at in his post. Facebook or whatever partner could pay him directly or indirectly, and he would therefore be profiting indirectly from Litecoin’s continued success.
Those who are disappointed with the selloff make a number of claims, many of which are quite silly, but one of which is interesting to discuss briefly. That claim is that by selling, Lee no longer has skin in the game, so he won’t be incentivized to improve and further develop Litecoin.
Do you need skin in the game to effectively lead the charge? I don’t think so. Having money in a venture ties your finances to the outcomes of the business you’re working in, and in so doing is supposed to keep you motivated. There’s value to this, that’s for sure, but for someone who’s had as much success as Lee, I question if skin in the game changes his work ethic in the least.
I don’t think it does, because from my estimation he’s intrinsically motivated, and is incentivized by the accomplishments associated with advancing Litecoin rather than the financial gains from it. This is the kind of leader that businesses are lucky to have: the kind who wants to advance the cause because he believes in it, and not just for the money. If it’s just skin in the game keeping you in the game, then when the going gets tough or the money’s made, you may well peace out, but if the money’s irrelevant, you’re going to stick it out and push through both the tough times and the good times, with your eye on the vision rather than the paycheck.
In short, I think having an intrinsically motivated leader who wants to be clear that he isn’t tweeting to move prices in his own favor, is a very good thing for Litecoin indeed.
What do you think about what’s on the horizon for Litecoin, and about Charlie Lee’s Litecoin selloff? Let me know in the comments below.
Disclosure: I do own Litecoin and am hodling the living daylights out of it!
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