Litecoin Plans Private Transactions, Says No to Mimblewimble
It is still unknown what privacy system Litecoin will implement. Apparently, Taproot will be involved, although it is not clear if it is the sole privacy feature under consideration. Lee has also made it clear that Litecoin will not adopt the new Mimblewimble privacy protocol, as that would require a major hard fork. Instead, Litecoin’s confidential transactions will be added seamlessly as part of a soft fork.
Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy.
I am now focused on making Litecoin more fungible by adding Confidential Transactions. ????
— Charlie Lee [LTC⚡] (@SatoshiLite) January 28, 2019
Suggested Reading : Learn about our recommended Litecoin wallets.
Potential Issues
Scalability could be an issue. Traditionally, privacy coins have been more resource-intensive than other coins, and they have usually offered slower and more expensive transactions. In the past year, Monero, Zcash, and Mimblewimble have all confronted this problem. Although Litecoin has added other scalability features, it has not revealed any specific plans to make its confidential transactions lightweight.
The auditability of the coin supply is also a potential problem: since confidential transactions prevent transaction details from being revealed, they make measurement difficult and can introduce “undetectable inflation.” Monero lead developer Riccardo Spagni has weighed in on this issue, suggesting that Litecoin’s privacy plans should not be migrated to Bitcoin. Charlie Lee agreed that care must be taken:
Yes absolutely, and that precise risk would be why I would argue against CT ever being added to Bitcoin.
— Riccardo Spagni (@fluffypony) June 9, 2018
We are exploring. Nothing has been decided yet. It’s a trade-off we need to take seriously. Block size versus unconditional soundness.
— Charlie Lee [LTC⚡] (@SatoshiLite) January 29, 2019
Litecoin In the Lead
If confidential transactions were implemented in Litecoin today, the feature would make it the highest-ranking coin with fundamental privacy features. As the seventh-largest coin, Litecoin currently outranks privacy coins like Monero (#13), Dash (#15), and Zcash (#22). At the moment, Litecoin’s total market cap is nearly 2.5 times that of Monero, meaning that Litecoin’s dominance over its closest competitor is quite secure.
However, Monero makes private transactions mandatory, something that Litecoin may or may not do. If Litecoin chooses to make private transactions an opt-in feature, which it plans to do initially, it may end up handling far fewer private transactions than Monero does. This would make Litecoin’s confidential transactions a side feature at best and allow Monero to maintain its established position as the leading privacy coin for a while longer.
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