Litecoin has been the crème of the crop in the cryptocurrency ecosystem this year with its recent associations and brand promotions with various high profile corporations. In the recent price valuation pump, Litecoin led the way with the highest percentage growth in price, about 30%, which has now made it the 4th largest cryptocurrency in the market.
The virtual currency was developed by Charlie Lee, of the Litecoin Foundation, who recently announced on Twitter regarding the implementation of MimbleWimble protocol to improve the virtual asset’s confidential transactions.
The announcement of MimbleWimble to be administered as an extension block in the Bitcoin blockchain was met by widespread appreciation by the community. It is in this light that Charlie Lee recently tweeted about extension blocks and compared the concept to that of sidechains.
Sidechains are security mechanisms that allow tokens and other digital assets from one blockchain to be securely used in a separate blockchain and then be moved back to the original blockchain if need be. Sidechain functionality holds tremendous potential to enhance the capabilities of existing blockchains.
Sidechains allow cryptocurrencies to interact with one another. They add flexibility and traditional banking functions like issuing and tracking ownership of shares can be verified on sidechains before moving them back onto the main chains. This reduces the use of block and makes the verification process much faster.
The MimbleWimble extension block is based on the same lines. MimbleWimble is a blockchain-based privacy protocol with a focus on scalability and adding the confidential transaction in the network. The benefit of the protocol is that it doesn’t relay any form of traceable information within a given transaction, while also verifying both the sender and receiver’s signature on the block.
The protocol is currently accessed by the recently launched Grincoin and Beam. The Litecoin foundation stated that the cooperation with Beam will allow on-chain conversion of regular LTC into a Mimblewimble variant of LTC and vice versa. Upon such conversion, it will be possible to transact with Mimblewimble LTC in complete confidentiality which further improves the privacy and fungibility of the system.
There remain some who still harbour doubts however like Twitter user Frank Dashwood who asked Lee,
“Why not just make the blocks bigger? Seems like we’re introducing a lot of blockchains where there isn’t any real need for them.”
Charlie Lee replied:
“Bigger blocks does not solve fungibility.”