What is LBRY Credits and how it works
LBRY Credits (LBC) was for years one of the most ambitious attempts to decentralise audiovisual content. Its proposal was clear: an open protocol where creators and users could share video, audio or documents without relying on a central platform, with its own token to monetise content. Ten years after its launch, the company behind it has disappeared, dragged down by an SEC lawsuit. The protocol, however, remains alive because of its decentralised nature.
What is LBRY Credits?
LBRY (pronounced “library”) is a blockchain protocol designed by Jeremy Kauffman and Mike Vine to allow anyone to publish digital content and monetise it without intermediaries. LBRY Credits, with the symbol LBC, is the native cryptocurrency of that protocol. It was used to pay for publications, donate to creators, buy premium content or participate in the protocol’s rewards system.
The project was born in 2016 with a proposal that combined the ideas of Bitcoin (decentralisation and transactions without intermediaries) with those of BitTorrent (peer-to-peer file distribution). The LBRY app, later converted into Odysee, was the protocol’s storefront: a platform with on-demand video, creator channels and categorised content, very similar to YouTube in user experience but radically different in architecture.
How the LBRY protocol worked
The LBRY protocol had three components working together.
The first was LBRY’s own blockchain, where publications and the metadata of each piece of content were recorded. Each published file was associated with a unique URL (with the lbry:// prefix) that pointed to the resource, without depending on a central server.
The second was the host network, similar to BitTorrent. Files were not hosted on a single server, but distributed among nodes that shared bandwidth. Users could download content and serve it to others at the same time, receiving LBC rewards for doing so.
The third was the LBRY app, later Odysee, which acted as an interface to publish, search for and consume content. The app was the window into the network and was available for Windows, macOS, Linux, iOS and Android. Because it was open source, anyone could create alternative applications connected to the same protocol.
The economic system was based on LBC. Creators could offer their content for free, charge for access, receive donations or take part in the interaction rewards programme. Users earned LBC for specific actions such as publishing their first piece of content, following other channels or inviting friends.
The SEC lawsuit against LBRY Inc.
On 29 March 2021, the US Securities and Exchange Commission filed a lawsuit against LBRY Inc. for selling LBC as an unregistered securities offering between 2016 and 2021. The SEC estimated that the company had raised $11 million through those sales and should have complied with the registration requirements applicable to financial securities.
In November 2022, Judge Peter Barbadoro of the District Court of New Hampshire issued summary judgment in favour of the SEC, concluding that the sale of LBC had violated Section 5 of the Securities Act of 1933. The judge rejected LBRY’s argument that it had not received prior warning about the application of those rules to its token.
In July 2023, the court imposed a final civil penalty of $111,614, far below the $22 million initially sought by the SEC. The reduction was applied because LBRY was already “defunct” and had no funds to pay a larger penalty. The company had spent several million dollars on its legal defence.
On 19 October 2023, LBRY Inc. published its final statement on X (formerly Twitter): the company was closing, executives and employees were resigning, and all its assets, including Odysee, were entering bankruptcy proceedings to satisfy its debts.
What remains of the project after the company’s closure
The particularity of the LBRY case is that the company disappeared, but the protocol can continue. The LBRY blockchain is open source and remains active as long as there are nodes running it. Published files remain accessible if hosts continue serving them.
Odysee, the video platform that emerged from LBRY and was spun off in 2020 as an independent company, also entered bankruptcy proceedings, but has continued operating as a service. According to the data published when LBRY Inc. closed, Odysee had more than six million monthly active users, with a varied content catalogue ranging from traditional video formats to live streaming. Its future depends on how the bankruptcy process is resolved and on the evolution of the post-LBRY Inc. project.
The community and independent developers have continued maintaining parts of the ecosystem, but without the original company’s backing, development activity around the protocol has fallen sharply. The broader dynamic of decentralised video platforms has evolved in parallel, with new approaches and with content creation models such as Twitch, YouTube or Kick gaining more weight than purely blockchain-based platforms.
LBC as a token in today’s market
The price of LBC rose above $0.80 in March 2021, during the broader crypto market boom. In October 2023, when LBRY Inc. announced its closure, it was trading below $0.01. Since then, it has remained at marginal levels, with very low liquidity and limited presence on exchanges.
Many of the exchanges where LBC could be bought in the past have disappeared or delisted the token. Bittrex, for example, shut down global operations in 2024. LBC mining remains technically possible, but with very low economic incentive given the price decline.
For anyone who wanted to exchange LBC today, the options are limited. Activity has moved towards peer-to-peer swaps or decentralised exchanges with very little activity for this pair. To consume content on the LBRY network or on Odysee, it is not necessary to own LBC: the platforms remain accessible without the token, and most content can be watched for free.
For those who hold other cryptocurrencies and are looking for real-world use outside these specific ecosystems, there are much more consolidated alternatives. The option to pay with cryptocurrencies in Europe through prepaid cards that convert the balance into euros is now the most practical way to spend crypto in regular stores, with or without a connection to the Lightning Network. And for low-value transactions between wallets, the Bitcoin Lightning Network continues to grow as the second-layer solution with the greatest real adoption.
LBRY Credits is a textbook case of the tensions between decentralised crypto projects and traditional financial regulation. The company behind it did not survive the legal cost of its clash with the SEC, but the decentralised nature of the protocol allows the blockchain, the published content catalogue and the Odysee platform to continue existing. As an investment token or a frequently used asset, LBC has moved into the background, but as a case study on the limits of decentralisation against securities law, it remains relevant.
Frequently asked questions
What is LBRY Credits (LBC)?
LBRY Credits, with the symbol LBC, is the native cryptocurrency of the LBRY protocol, a decentralised network for publishing and monetising digital content. It was launched in 2016 and was used to pay for content, donate to creators or participate in the protocol’s rewards system.
Is LBRY still working?
LBRY Inc. shut down in October 2023 after losing the SEC lawsuit. The LBRY protocol, being decentralised and open source, can continue as long as there are nodes maintaining it. Odysee, the platform that emerged from the protocol, continues operating although it also entered bankruptcy proceedings.
Why did the SEC sue LBRY?
The SEC alleged in March 2021 that LBRY sold its LBC token as an unregistered security between 2016 and 2021, in violation of Section 5 of the Securities Act of 1933. In November 2022, a federal judge ruled in favour of the SEC.
How much is LBC worth today?
The price of LBC has fallen to marginal levels after the company’s closure. Its presence on exchanges has dropped sharply and liquidity is very limited. At its March 2021 peak, it exceeded $0.80 per token.
What is Odysee?
Odysee is the video platform that was developed on top of the LBRY protocol and spun off as an independent company in 2020. At the time of LBRY Inc.’s closure, it had more than six million monthly active users. It continues operating as a service.