Prague-based “cryptoanarchist” group Paralelní Polis is shunning bitcoin for litecoin. The group cited concerns over bitcoin fees, network speed and risks associated with rival scaling proposals for the shift.
A Store of Value, Not a Payment System
Paralelní Polis has long been fiercely crypto-only, and does not use fiat currency for any of its operations. However in a recent blog post, operators wrote “We will still accept bitcoin, but we can no longer recommend it as a payment system — it’s more of a store of value.”
Stagnation and arguments over Bitcoin scaling proposals are the main reason, it said. This is causing delays and high fees, making BTC unfeasible for the kinds of everyday transactions Paralelní Polis handles.
Among other things, the center hosts lectures, 3D printers for visitors’ use and a coffee shop. Transaction fees of $1.50 or higher mean bitcoin is almost useless for small purchases.
To avoid fees, the center even developed its own second-layer application for regulars, allowing them to buy digital credits with larger bitcoin payments.
On top of the delays and fees, proposals like the user-activated soft fork (UASF) risk forking Bitcoin into two. Calling UASF dangerous, it said “this is unacceptable for any business running on bitcoin.”
“We had hope when the Segregated Witness soft-fork arrived and miners started signaling activation. But after stagnating miner support, political debates in the bitcoin community and still rising fees, our hope is lost.”
Litecoin ‘More Technologically Advanced’
The post also described Litecoin as currently “more technologically advanced” than Bitcoin. Having already activated SegWit, Litecoin now has developers working on second-layer payment solutions like the Lightning Network
Paralelní Polis uses a point-of-sale device from local manufacturer General Bytes. General Bytes, which also makes cryptocurrency ATMs, was able to modify the software to accept litecoin as well, making the switch seamless.
The long-time #2 (and sometimes unloved) cryptocurrency, Litecoin has seen a new surge of value and development activity in the past six months. The network activated SegWit in April 2017, leading mining pool BW Pool to call litecoin “a trailblazer”.
Inventor Charlie Lee’s claim that litecoin could be “silver to bitcoin’s gold” is sometimes mocked by bitcoin maximalists, but if others follow Paralelní Polis the prediction could well come true. However LTC now has more competition from tokens like ether and even NEM, and now sits at #6 with a market cap of $1.5 billion USD.
Litecoin has long been a staple trading currency on Chinese exchanges. Recently, popular European exchange Bitstamp announced it would launch LTC trading pairs in “early June 2017”. Bitstamp also cited Litecoin’s SegWit activation as a primary reason for its decision.
What is Paralelní Polis?
Paralelní Polis, which means “parallel city”, is a hacker movement that aims to develop a free 21st century society through technology. Its goal is “to make available tools for unlimited dissemination of information on the Internet and encouraging a parallel decentralised economy, crypto currencies and other conditions” to create that reality.
The movement began as far back as 1978, when its home (then Czechoslovakia) was still firmly behind the communist Iron Curtain. It was initially a cultural movement of artists and intellectuals, but its focus shifted towards technology as new tools in line with its philosophy became available.
Today it incorporates a co-working space called Paper Hub, a program to develop privacy tools called the Cryptoanarchy Institute, and an espresso bar called Bitcoin Coffee. It also hosts regular lectures and meetups.
The center holds an annual event called Hackers Congress, which attracts hackers and cryptoanarchists from all over the world. This year’s event will take place from 6-8 October in Prague.
Do you agree with the group’s reasoning? Let’s hear your thoughts.
Images via Paralelní Polis