The messages seeding doubt are from a private chat history in which Litecoin Foundation Director Franklyn Richards said he "was extremely disappointed to discover that no progress had been made on [Confidential Transactions]", and that "instead of doing the actual work," the foundation has "opted to put all its efforts behind marketing."
These accusations were denied by Litecoin creator Charlie Lee, but Lee has since conceded that adoption has taken priority over development in the last year. What next for Litecoin?
An abandoned cryptocurrency?
In November 2018, Brave New Coin analyst Josh Olszewicz noted that Litecoin development work appeared to be slowing. “In regards to the LTC development roadmap, the litecoincore.org website is currently down and the LitecoinCore twitter account has not tweeted since May. The main repo for LTC on GitHub has had a cumulative 3 commits over the past 90 days and 749 commits over the past year,” said Olszewicz.
Then a March report from investment firm Electric Capital, also noted that development activity on Litecoin seemed to have slowed. The report describes Litecoin as an 'abandoned', cryptocurrency, claiming that 40 monthly developers once worked on the project, but that the number has since dropped to three.
The number of commits on GitHub — which measures revisions made to files within a project — is zero for Litecoin in 2019, again suggesting very low levels of developer activity.
And though commits can be a misleading metric, frustrated investors have been quick to point out that developers have little to show for their work — with Litecoin's promised privacy features still in progress.
Lee has often spoken of the importance of fungibility for Litecoin, and had made plans to address this by incorporating a privacy protocol.
Fungibility is said to be one of the key features required for ‘sound money’ that is still missing from Bitcoin. Because each Satoshi has a unique history which can be viewed publicly, it is possible for stolen coins to be identified as 'tainted' currency, and no longer considered equal to other units of the cryptocurrency.
Tweeting in January, Lee said that he hoped to address this and make "Litecoin more fungible by adding Confidential Transactions."
"Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy," tweeted Lee.
A few weeks later, the Litecoin Foundation announced that it would be cooperating with privacy coin Beam on an implementation of the Mimblewimble protocol for Litecoin, which would make completely confidential transactions possible.
Unfortunately, a lack of progress in the partnership was highlighted when Litecoin users on Binance were hit with a 'dusting attack' on August 10th.
In this growing form of cybercrime, tiny fractions of cryptocurrency — or dust — are sent to wallets by attackers who then use the transaction to track the activity of the target wallets. By drawing correlations between the transactions, this data can be linked to real-world identities, which can then be hit with other cyber attacks like phishing or cyber extortion.
But, as the attack method relies on finding a link between pseudonymous addresses and a real world identity, it can be guarded against with completely anonymous transactions.
Adoption over development
In response to the furore over the leaked messages, Charlie Lee tweetstormed a lengthy explanation — admitting that he has "dropped the ball" on Confidential Transactions, but claiming that the majority of criticism is based on a false premise.
What commentators seem to have forgotten, suggests Lee, is that Litecoin is a Bitcoin clone, meaning it relies mainly on Bitcoin for code updates. "Since we are mostly just merging in Bitcoin changes, we only need a lead Litecoin Core developer doing the merges and the rest of us help with code reviews, testing, and gitian builds," explained Lee.
Because GitHub "keeps the commit the same in terms of who wrote it and when it was committed to the code base," Bitcoin developers are credited in the Bitcoin codebase, instead of in Litecoin, said Lee, pointing out that ongoing development has been made by "building on side branches instead of the master branch" in line with good development practice.
But raising adoption and awareness, Lee conceded, has taken priority over development in 2019 so far. He pointed out several partnerships that have been formed over the past few months with organisations including the Mammoth Film Festival, Flexa's SPEDN payment app, and the Miami Dolphins.
Despite this, Lee seems to have taken the criticism to heart. He tweeted that he will "shift focus from adoption back to development" and added that, "I still think fungibility is extremely important and I will get the ball rolling on MW/CT again. This time, I won't make any promises on dates."