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Litecoin have to be getting bored with standing in Bitcoin’s shadow. After a few years as Bitcoin’s second fiddle, Litecoin core builders are getting extra fascinated about following the likes of privateness cash akin to Monero (XMR) and Zcash (ZEC).
Charlie Lee tilted his hand on Twitter, the place he opened a dialogue on fungibility and hinted on the addition of Confidential Transactions in a “future launch of the full-node implementation” in 2019.
Reworking right into a privateness coin would possibly make Litecoin extra related, however it might additionally introduce a bunch of points on the regulatory and safety fronts that might make it a shifting goal. We couldn’t assist however marvel if Lee is likely to be biting off greater than he can chew.
Fungibility is the one property of sound cash that’s lacking from Bitcoin & Litecoin. Now that the scaling debate is behind us, the following battleground shall be on fungibility and privateness.
I’m now centered on making Litecoin extra fungible by including Confidential Transactions. ?
— Charlie Lee [LTC⚡] (@SatoshiLite) January 28, 2019
Out from Bitcoin’s shadow
It’s not shocking that the Litecoin neighborhood is seeking to type its personal identification. Like a sibling rivalry, it was solely a matter of time earlier than LTC grew bored with sharing the highlight, and enhancing privateness is a well-liked strategy to achieve traction. From new tasks akin to Beam and Grin utilizing the Mimblewimble protocol to bellwethers like Monero and Zcash, anonymity is likely one of the gold requirements for decentralization.
Nonetheless, privateness additionally requires some concessions. Zcash, one of many privateness leaders, has been accused of compromising its privateness to get on exchanges like Coinbase. The Winklevoss twins infamously prompt that regulators choose Zcash to Monero, inviting jibes from Monero’s lead developer, Riccardo Spagni.
If Litecoin actually desires to grow to be a privateness coin, then it’s going to must resolve whether or not it desires to be privacy-lite (pun meant) or one thing extra severe. In the intervening time, it seems to be headed in direction of the previous.
Lee is targeted on the fungibility difficulty, which has to do with the similar nature of cryptocurrencies. Like bitcoin, litecoins are non-fungible, which means it’s doable to find out which of your cash come from a particular supply.
Lee factors to “soft-forking in Confidential Transactions” as the answer to what he describes because the “fungibility downside” that stands between Bitcoin/Litecoin and “sound cash.”
Confidential Transactions are semi-private in that they “[obfuscate] the quantities being transacted over the community however not the place cash are being despatched,” in keeping with Bitcoin Developer Gregory Maxwell. To begin, Confidential Transactions shall be introduced as an choice for Litecoin transactions.
Lee, nevertheless, would fortunately comply with within the footsteps of Monero for non-optional privateness. “Necessary is way stronger privateness and fungibility however it’s more durable to achieve consensus on doing,” he stated in a Tweet.
Safety and Regulation
Because the No. 7 cryptocurrency based mostly on market capitalization, Litecoin is a well-liked alternative; it may be simply bought throughout dozens of exchanges and a whole lot of buying and selling pairs.
As soon as it inherits the privateness label, nevertheless, Litecoin is putting a regulatory bullseye on its again. This could possibly be a turnoff to crypto exchanges that work alongside regulators, which have gotten more and more extra widespread. Simply ask ShapeShift.
There are additional downsides, together with “an honest improve within the dimension of bandwidth requirement and the Unspent Transaction Output set as a result of dimension improve of the output worth to 33 bytes from 8 bytes,” to not point out a “substantial improve in validation prices.” However in addition to that, no biggie.
On the safety entrance, Litecoin.com outlines a state of affairs wherein “an attacker would be capable to print new cash into existence with out restriction.” It’s a problem that Monero reportedly must contend with as nicely. The difficulty could possibly be addressed by additional soft-forks, however will nonetheless weigh closely on Litecoin-focused minds.
Litecoin has a brand new angle recently, beginning with its promotional push at the UFC to its newest curiosity in turning into an edgier cryptocurrency. It’s a welcome change from the outdated picture, which was tainted by the creator promoting his LTC portfolio earlier than the market crash.
The writer is invested in digital property, however none talked about on this article.