Litecoin's MimbleWimble Upgrade- Creating More Private Transactions
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He used the MWEB, or MimbleWimble Extension Block, to add MimbleWimble to Litecoin so that users could engage in anonymous transactions. In addition, the principal developer, David Burkett, claims that the MWEB makes it easier for users to use Litecoin as a fungible currency. As a result, they can use it for everyday transactions, such as paying staff salaries and purchasing real estate. MimbleWimble employs various cryptographic techniques to conceal the sender and recipient of a transaction. Previously, Litecoin developers had a projection that MWEB would be operational by February 2022. However, in March, a new version of the Litecoin Core 0.21.2 client with improvements to MWEB and the Taproot was released to the testnet.
How Does MimbleWimble Work?
The MimbleWimble protocol gets its name after the famous Harry Potter tongue-tying spell. This spell binds the victim's tongue, preventing them from uttering specific words. It provides a blockchain structure that creates new scalability, fungibility, privacy, and crypto-anonymity opportunities. The complete anonymity of MimbleWimble transactions differs from the pseudonymity of Bitcoin (BTC) and other cryptocurrencies, where it is possible to view the three secrets: the sender's address, the amount of cryptocurrency sent, and the recipient's address. MimbleWimble does not disclose any of the three secrets or pieces of information.
What are The Most Important Features of MimbleWimble?
When discussing the MimbleWimble protocol, there is always a mention that it has three unique characteristics that set it apart from other blockchains. The first and most exciting feature is its anonymity. It is not possible to trace MimbleWimble's transaction history. In addition, its transactions are anonymous because they lack public addresses users can use to determine who sent and who received a particular transaction. Due to the protocol's design, it is extremely difficult to circumvent a user's anonymity.
The second characteristic is its fungibility. MimbleWimble is more fungible than other blockchains due to the difficulty of tracking its assets. This means that users can trade any cryptocurrency on the platform without losing it or fearing it has been "tainted" by illegal activities and lost value.
The third feature is its scalability. According to the fundamentals of blockchain, each node adds transaction data to the ledger to expand blocks. However, large block sizes create problems with scalability. This indicates that the blockchain network cannot process a large amount of transaction data in a short time. MimbleWimble can make its blockchain more scalable by employing CoinJoin and Cut-Through to eliminate unnecessary transaction data and reduce the size of blocks.
How Will MimbleWimble Create More Private Transactions?
Litecoin's implementation of MimbleWimble includes the following privacy-protecting technologies:
The Price of Litecoin Remains Unchanged
With the MimbleWimble (MWEB) upgrade, Litecoin will be more private and usable in more situations. Monero and Zcash are two privacy-focused cryptocurrencies whose popularity has increased recently. In addition, Litecoin increased by 5% as people prepared for the long-anticipated MWEB on May 19.
Despite the market crash, Litecoin's price has been falling steadily since March, although it stabilizes above the $52 support level. If LTC can surpass the MA 50 barrier at $98.76, it could lead to a 30 percent increase from its current price. On the other hand, the barrier above could prompt a rapid increase to $134. The current price of Litecoin is 82.85 percent lower than its all-time high of $412.
How do Users Deposit and Withdraw Funds from Extension Blocks?
"Pegging-in" refers to the transfer of funds into an Extension Block, and "Pegging-out" refers to the transfer of funds back to the main chain. To send funds into the privacy-protecting Extension Blocks, a user needs to create a pegging-in transaction or, as an alternative, send it to a MimbleWimble Extension Blocks address with the prefix "ltcwmeb1," in which case the miner will create the pegged-in transaction on their behalf.
HogEx (short for "Hogwarts Express") handles these pegged-in transactions by a transaction in the same block, allowing the user to spend these litecoins in the next Extension Block. To withdraw funds from the Extension Block, a user must perform a "pegging-out" transaction by sending funds to an unsecured Litecoin address. Then, they can transfer the funds after processing six blocks on top of the block containing their transaction. The block's HogEx also processes these pegging-out transactions.
The final step of a HogEx transaction is transferring the Extension Block's "balance" from one block to the next. The HogEx moves the balance during this process, adding a new pegging-in transaction and subtracting from it with each pegging-out transaction. Extension Blocks cannot be used to monitor Litecoin transactions, but they can indicate when this feature is in use. For example, you can determine if a transaction or wallet contains Extension Blocks-based funds with Elliptic solutions. In addition, businesses that adhere to regulations can use this function to ensure their Litecoin transactions are legal.
Advantages of Litecoin's Modification
In addition to enhancing your privacy, MimbleWimble offers several other advantages, including:
Data Compression
MimbleWimble allows you to compress data, thereby reducing the size of the blockchain as a whole.
Scalability
The MimbleWimble protocol is currently an addition to Litecoin. However, it could also serve as a solution for a sidechain compatible with Bitcoin or another blockchain.
Partial Privacy
MWEB eliminates certain Bitcoin scripts and conceals certain transaction details, giving users more privacy.
Conclusion
Litecoin, one of the most popular alternative cryptocurrencies to Bitcoin, has recently taken steps to release an upgrade known as MimbleWimble. The Litecoin MimbleWimble upgrade will be integrated into the protocol sometime this summer and will allow for significantly more private transactions in comparison to Litecoin's current capabilities. What does this mean? This means that Litecoin will have similar privacy features as the popular privacy coin Monero without the need to create a new blockchain and that transactions will be smaller in size and cheaper overall.