The Advent of MimbleWimble Chain on the Litecoin Network
Litecoin, an early digital currency developed after Bitcoin’s creation, added a major privacy upgrade to its network, MimbleWimble (MW), in May 2022. MimbleWimble, named after a spell from the popular Harry Potter series, was initially proposed by an anonymous developer under the alias Tom Elvis Jedusor in 2016. This novel update’s primary role is to uphold transaction privacy on transparent blockchains like Litecoin, where every transaction reveals the sender’s and recipient’s addresses alongside the transaction amount.
Extension blocks: Fostering Discretion & Versatility
Litecoin users now have the option to tap into MW’s discretion technology by shifting their litecoins into “Extension Blocks”. Here, they operate on a separately running blockchain concurrently with the primary Litecoin chain, but technically, they are situated within each Litecoin block. The integration of Extension Blocks provides increased transaction privacy by obfuscating the addresses and volumes involved, only visible to the participants of a transaction themselves. However, users can repatriate their litecoins to the main chain to perform transparent transactions again at their convenience. As it stands, Extension Blocks are optional, with the majority of Litecoin’s activity still observed on the transparent ledger. Still, the usage volume of Extension Blocks is predicted to rise as additional wallet providers and exchanges create support for this new tool.
Transitioning Funds In and Out of the Extension Blocks
For Litecoin users, the process of moving funds into an Extension Block is called “pegging-in”, and extracting funds back to the primary transparent chain, “pegging-out”. In a pegging-in transaction, users can either create a unique transaction or send funds to a dedicated MimbleWimble Extension Blocks (MWEB) holding address with the prefix ltcwmeb1. In either case, miners will coordinate the pegging-in transaction. Similarly, to peg-out from the Extension Block, the process involves the user creating a transaction, dispatching funds to a non-private Litecoin address, and subsequently waiting for six conformations to move the funds.
MimbleWimble Ensures Privacy Through Advanced Technologies
The implementation of MimbleWimble on the Litecoin network uses several sophisticated technologies to assure privacy, such as Confidential Transactions, which permits only the transaction participants to comprehend the transmitted amount while concurrently encrypting it to ensure no more coins are spent than present. The CoinJoin technology operates like a mixer, hiding the sender’s identity by arranging multiple inputs from various parties into a united transaction. Additionally, the use of Stealth Addresses obscures the recipient’s identity, employing single-use addresses that can’t be seen on the blockchain unless paired with the corresponding viewing key.
Potential Expansion to Bitcoin?
Authoritative privacy issues might force Bitcoin and other blockchains to consider adopting MimbleWimble or related technologies to preserve their users’ data. Since Litecoin has been known to implement pioneering features that are eventually adopted by Bitcoin, it’s plausible that the privacy offered by MimbleWimble could be incorporated into Bitcoin’s design. The latter will undeniably observe how this new privacy tool performs on the Litecoin network to gauge its potential benefit.
Please feel free to provide your thoughts on Litecoin’s new MimbleWimble upgrade and its effects on the world of digital currencies.
