Litecoin Creator Charlie Lee Suggests 1% Voluntary Donation by Miners for Development
Charlie Lee, developer of Litecoin (LTC), has advocated donations from mining pool for cryptocurrency innovation.
In a tweet, Lee stated that a superior way to finance cryptocurrency innovation is through voluntary donation of a percentage of block rewards.
Lee also detailed the amount that would be generated through such a tweet:
Lee pointed out that regular donation of 1% will ensure permanent funding for Litecoin development.
“At current LTC price, 1% of block rewards is about 7x Litecoin Foundation’s yearly expenses. Even if a small percent of miners are generous enough to donate, the foundation would be able to put it to good use by funding developers to work on Litecoin Core, Mimble Wimble, LiteWallet, LN wallet, hosting the yearly Litecoin Summit, and pushing for adoption of Litecoin by merchants and users.”
1/ I think a better way to fund development is mining pools voluntarily donate a portion of the block reward. How about Litecoin pools donate 1% (0.125 LTC) of block rewards to the @LTCFoundation? If every miner/pool does this, it amounts to about $1.5MM donation per year!
— Charlie Lee [LTC⚡] (@SatoshiLite) January 24, 2020
Lee also underlined that such donations are willful, adding “It wouldn’t be right if it wasn’t voluntary.”
Raising adequate capital to operate a business can be a complex process. The situation has turned out extremely challenging when a firm or venture intends to decentralize.
In late 2019, there were rumors that Litecoin Foundation would go bankrupt soon. However, Lee refused that in a tweet dated October 13 saying “Don’t listen to stupid fud and lies. We have enough money to last 2 years.”
The 1% voluntary donation suggested by Lee following proposals of Roger Ver and Jihan Wu, Bitcoin Cash (BCH) advocates, publishing an “infrastructure funding plan,” necessitating miners to donate 12.5% of block rewards to an endeavor in Hong Kong.
In retaliation to 51% attack worries, Dogecoin combined its mining process with Litecoin in 2014, allowing concurrent mining of both cryptos. Interestingly, Lee’s latest mining pool donation plan affects prevailing merged mining of Litecoin and Dogecoin.
Lee argued why miners should not hesitate to give 1% as funding for innovation in cryptocurrency.
“Currently with merged mining of Dogecoin and other Scrypt coins, miners make 105%+ of block rewards. So 1% is a reasonably small amount to give back towards funding a public good.”
Ultimately, Lee also studied the plan of miners selecting the Litecoin venture to which the funds will be diverted, inviting suggestions on his entire proposal from the community.
Lee said “It’s important that miners can choose to support other Litecoin organizations as well. Miners should donate to the organizations that want to help out.”