Litecoin has announced plans to incorporate a privacy element to their protocol. With nine years under its belt, and the widespread popularity in privacy, Litecoin has embarked on a new journey. The cryptocurrency recently launched their MimbleWimble testnet, illustrating that their changs are soon to become a reality. Let’s take a look at why Litecoin has their sights set on privacy, and how close the cryptocurrency is to making this a reality.
Cryptocurrency initially was both celebrated and feared for their pseudonymous transaction history being publicly displayed. While cryptocurrencies like Bitcoin, Ethereum and Litecoin conceal their users’ identity through long stringed alpha numeric codes, their identity can still be revealed should the person looking know the users’ wallet address. Enter privacy coins, these coins use another layer of cryptography to conceal the users behind the transactions, as well as the amounts and timestamps.
Mainstream media isn’t the biggest fan of privacy coins, presenting concern over the fact that it is likely to be used by criminals engaging in illicit activities. However, many people feel that everyone has a fundamental right to privacy, and why should financial privacy not be included in this. The chance to transact anonymously is also particularly advantageous to people living in economic uncertainty where this type of money provides an alternative outside of the reach of capital control.
Privacy coins currently on the market include Monero, Zcash, Dash, Verge, PIVX, and Hush. While Monero sits in the top 20 cryptocurrencies based on market cap, Zcash is positioned a little further down the list and has nearly tripled its value in 2020. In recent years, as the privacy element became more attractive, bigger cryptocurrencies like Litecoin sought to incorporate it into their network.
The creator of Litecoin, Charlie Lee, elaborated on his interest to incorporate the privacy element, “I want to make it so that users don’t have to worry about giving up their financial privacy by using Litecoin. Even if you’re not doing anything illegal, you don’t want people to know how much money you have or what your paycheck is.”
Litecoin is known affectionately in the industry for being Digital Silver to Bitcoin’s Digital Gold, and has earned itself a reputation for testing new protocols before bigger cryptocurrencies adopt them. As part of the privacy development, the team behind the cryptocurrency has incorporated a protocol layer called MimbleWimble. This layer lowers the amount of data publicly visible on the blockchain and assists in hiding the input and outputs of each transaction.
The project recently launched their MimbleWimble testnet to developers, with plans to extend the protocol to the public in 2021. MimbleWimble adds extension blocks to the blocks on the blockchain that work to conceal the traders’ identity and transaction amounts.
While Litecoin offers highly practicable features, like 4x faster transactions than Bitcoin, the successor still remains in its shadows. Litecoin is available on nearly all the top exchanges, however it has failed to come close to the adoption and success of BTC. Many investors are seeing these new developments as a strong case for Litecoin’s adoption and increased market capitalization.
While no-one can put their finger on exactly why Litecoin have their sights set on privacy, it’s just a matter of time before the element is implemented. Whether Litecoin is trying to differentiate themselves from its predecessor Bitcoin, or move in an entirely different direction, one thing is for sure, and that’s that Litecoin is truly driving innovation in the marketplace. Tap into the Litecoin market before the implementation with Tap Global. Your one stop shop to the simplest and most secure crypto trading.
It's only a few taps away.