Litecoin Edges Closer to Monero With Confidential Transactions, While Bitcoin Bites the Dust
Other Cryptocurrencies have integrated privacy features
Litecoin Developers are adding confidential transactions (CT), a privacy-enhancing feature proposed by Bitcoin and used by Monero, to Litecoin. Litecoin's has become the go-to blockchain for testing cutting-edge features.
Bitcoin is biting the dust as Litecoin implements the technical ambitions of bitcoin.
The 5th most capitalized cryptocurrency has been on a roll this year. Since the founder, Charlie Lee, took on a full-time role at Litecoin Labs, the project has tried, tested or adopted upgrades from any blockchain with avant-garde features.
Earlier this year, while Bitcoin went through an ugly divorce over a Segregated Witness (SegWit) update to its protocol, Litecoin locked in SegWit after a successful community consensus. Just last week, Litecoin conducted three groundbreaking atomic swaps with Decred, Vertcoin, and Bitcoin. Confidential transaction (CT) is an addition to an extensive list of achievements.
Lee, who now works full-time on the project tweeted yesterday:
"Chatted with Greg Maxwell about Confidential Transaction on Litecoin. Let's help kill the 2x hard fork so the devs can get back to real work!"
"According to [2], we will need SegWit to implement Confidential Transaction as a soft fork. This should not be too far away because we are planning to release a new Litecoin Core with SegWit soon."
Other Cryptocurrencies have integrated privacy features
Bitcoin's governance issues are holding it back from quickly responding to much-needed upgrades. Even though CT was proposed on Bitcoin in 2013, four years later, it is yet to be implemented. In that time, other privacy-centric currencies have taken off in both adoption and market price. Zcash and Dash offer privacy as an option, while Monero's anonymity is a default.
Monero picked up Ring-CT, an adaptation of Confidential Transaction for its architecture. The technology has propelled XMR Monero to the most anonymous and fungible coin. Riccardo "fluffypony" Spagni, core team member and core maintainer of Monero, says the currency might be the first fungible digital currency ever created. Gregory Maxwell has credited Monero's technical achievement as an enviable feat by the wider cryptocurrency community.
Why does privacy matter?
Bitcoin's public ledger is unavoidably transparent on all transaction outputs and inputs. Sharing a wallet address for everyday purchases may reveal more transaction histories than users care to give. As a fork of Bitcoin, Litecoin suffers similar drawbacks including fungibility. Tracing a coin to its origins is the difference between the price of a tainted coin and a ‘clean' coin. Such a distinction completely ruins the value proposition of digital currencies as money.
Not everyone wants the whole world to know how or where they spend their money. It is why unsavory drugs are now sold for Monero on Alphabay, one of the largest online darknet market. Monero uses ring signatures to obfuscate the source of transactions from the network.
Litecoin however, is not out to win the hearts of drug lords.
Confidential transactions on Litecoin will be optional on the network at a higher fee. Charlie insists his goal for adding anonymous transactions is fungibility. The whole team at Litecoin Labs plans to make Litecoin an even more attractive digital currency. Meanwhile, Bitcoin is too busy dealing with another hard fork crisis to take care of its privacy challenges.