Scaling and privacy have been hot buttons for cryptocurrency users and developers since the very beginning. Bitcoin’s transparency and low speed slow down adoption, but if it wasn’t for these flaws, multitudes of protocols, forks and altcoins wouldn’t have been created. Since it’s based on Bitcoin’s code, Litecoin by extension stumbles upon the same problems, which it solves with integrations. What is MimbleWimble and how it can affect Litecoin?
- MimbleWimble is a privacy- and scalability-enhancing blockchain protocol. Its integration will let Litecoin users mask sender and receiver’s addresses and the transferred amount;
- After more than two years in development, the protocol is on track for a release in early 2022;
- There are opposing points of view on this feature: it is supposed to improve Litecoin’s privacy, anonymity and fungibility. However, there is a chance it will further slow down mass adoption of LTC.
What is MimbleWimble?
First things first: what is MimbleWimble? In case you didn’t know, MimbleWimble (MW) is a set of blockchain protocols which change the way a transaction is recorded on the blockchain.
The main utility of this protocol is privacy, as it uses elliptic curve cryptography to obfuscate the addresses of a sender and receiver, as well as the amount transferred. MW is used by privacy coins such as Grin, Beam, and there is a native Mimblewimble coin (MWC).
Therefore, it is a flexible protocol that can be integrated into other blockchains or work on its own. MW itself achieves privacy with a combination of other privacy-preserving protocols: Confidential Transactions, Dandelion, CoinJoin and Cut-Through.
The Confidential Transactions protocol was first used by Monero: it is the feature that lets the transferred amount be masked. The Dandelion++ protocol “diffuses” a transaction through the network by broadcasting it to as many nodes as possible non-linearly, obscuring the origin.
The MimbleWimble privacy features come hand in hand with scalability. The advanced cryptography in most privacy coins scales poorly, but to prevent blockchain bloat, MW includes CoinJoin and Cut-Through protocols.
CoinJoin works like an on-chain coin mixer: it changes UTXOs identical in amount so that a direct chain of transfers gets broken. Cut-Through aggregates transactions to help blocks accommodate more of them at once.
The MimbleWimble Litecoin implementation has been in development since December 2019. In September 2020, the developers adopted the MWEB acronym (stands for “MimbleWimble Extension Block”) for this specification.
When will MimbleWimble Roll Out for Litecoin?
“When MWEB” has been a question for more than two years in the Litecoin community. Luckily for them, the MWEB developer David Burkett has confirmed that if the testing goes right, a release candidate will be done in January.
After that, it will most likely be tested on testnet first, but it is safe to assume that MWEB will hit Litecoin’s mainnet in early 2022.
What will MimbleWimble Do for Litecoin?
MWEB is expected to further improve Litecoin’s protocol on the three fronts:
- Anonymity. Users will be able to opt in for anonymous transactions and keep their transaction history secret from outside observers. Anonymous coins cause concern from the regulators but the optional nature of the feature is supposed to keep the “privacy coin” label off Litecoin.
- Fungibility. It is one of the properties of money, meaning that all units of the currency have equal value, that Bitcoin, and by extension Litecoin, currently lack. If an LTC UTXO has no recorded history of illicit use, it can be exchanged for another LTC.
- Scalability. Extension blocks can significantly improve the chain’s throughput by simply allowing more transactions in a block — a simple and elegant solution.
Furthermore, MWEB will become one of the largest upgrades for the Litecoin protocol in a while, and is already the most anticipated one. This is most certainly going to have an effect on the price of the asset.
Opinion on MimbleWimble in Litecoin
As a team of blockchain professionals, ChangeHero is also following this process. Here is what our CMO Alexey thinks about the impact of the upgrade:
“MimbleWimble is going to be popular during these times of ‘KYC terror’, mentioned at the drop of a hat. The question is, who is it going to be popular with? The users of coin mixers and transaction obfuscation protocols.
I don’t think we will see MimbleWimble support on Binance, OKEx or other centralized exchanges, which are collaborating with law enforcement and seeking a compromise with regulators. Monero and Zcash’s delisting examples are enough to conclude that.
Another thing that cannot be ignored is that despite the claims, making use of the MimbleWimble security will come at the expense of transaction speed. An advanced protocol is inherently more complex, and this specification uses extension blocks, which add to the computational and mining complexity.
All of the above will make mass adoption even more distant from coming true. The most probable result is that MWEB will end up as a niche technology like Lightning Network which is going to be utilized by a fraction of users.”
Tweets on MimbleWimble
$LTC #Litecoin #LTC “This means mimblewimble on Litecoin will make it the most accessible privacy coin and create lots of demand for LTC” vid by @coinbureau #MWEB $DOGE #Dogecoin #DOGE pic.twitter.com/ks4uLXUK5p
— Litecoin Magazine (@LitecoinMag) January 13, 2022
Litecoin Magazine shared a fragment of CoinBureau’s video on the upcoming upgrade. They quote Guy’s conclusion that MWEB will create positive traction for LTC.
Whales have accumulated more LTC in the last 15 weeks than the previous 3 years combined. Short positions are at an all time high. Mimblewimble launch is coming by the end of the month. +
Litecoin holders are already bracing for a shock. Combined with the news of an upcoming release, in 2022 Litecoin is seeing an unprecedented surge in network activity.
Glad to publish the technical audit report of our experts (involving @RobinDavid1) on the MimbleWimble #MWEB integration in Litecoin #LTC. Many thanks to @LitecoinProject & @DavidBurkett38 for making this assessment possible! https://t.co/jPgvaxBaAh
— quarkslab (@quarkslab) January 13, 2022
MWEB has successfully been audited by Quarkslab. There is hardly a better sign that a release is coming soon.
So, what is MimbleWimble going to become: a groundbreaking upgrade or an unnecessary undertaking? Of course, only time will tell for sure but even now there is much to anticipate and discuss.
What do you think about the cited opinions? Feel free to share your thoughts in the comments in our blog or on social media: Twitter, Facebook, Reddit and Telegram.