Twitter user @TruthRaiderHQ created a controversy when he claimed that Coinbase holds 25 percent of all Litecoin (LTC) in circulation.
Coinbase Litecoin Holdings: Is LTC decentralized?
Crypto assets advertise by claiming that they are decentralized, i.e. not controlled by a central party, but what happens when one party seems to be controlling it? Being on a blockchain network does not ensure that the asset would be decentralized. If a certain mining pool or hodler accounts for a majority, then he would be centralizing the asset around him.
Now Coinbase, one of the most popular crypto exchanges in the world, is under suspicion of holding a quarter of all Litecoin. The exchange is well-known and has been acknowledged by Forbes Blockchain 50 List. The exchange also had a positive effect on the assets it listed, as all those assets saw an increase in price after being listed.
TruthRaider while claiming Coinbase owned 25% of all LTC also attacked John Kim, who, according to him, was a “fanboy” of Litecoin. He stated that people listening to Kim’s words would never think that the asset is “centralized af.” He then took a jab at Ripple by saying that more than 25 percent of the “shitcoin” was owned by one company.
However, it is not certain whether Coinbase owns that much Litecoin as the company’s asset portfolio is not known. Coinbase is a centralized exchange that acts as a gateway between fiat and crypto and is comparable to a bank. The platform sees huge sums of money deposited and withdrawn, so it is holding a huge sum of assets. Hence the possibility of it owning 25 percent of all Litecoin cannot be denied.
If the news turns out to be true, it might put a burden on the Litecoin network, which is already seeing a decline in its hash rate. The hash rate has fallen to where it was 12 months ago, making it susceptible to a 51 percent attack.