Given the similarities in terms of structure between Bitcoin and Litecoin, Litecoin-founder Charlie Lee recently said that most of the innovation around Bitcoin made by its developers benefit Litecoin as well. He then explains:
“Every Bitcoin developer also works on Litecoin. Absolutely nothing they can do about that. If you don’t like that Litecoin piggybacks off of Bitcoin developers’ hard work, it is because you care more about Bitcoin making you rich than crypto changing the world.”
This statement was released right after the progress of a significant amount has been produced by the Confidential Transactions Solution. On Bitcoin’s Mailing list, Greg Maxwell, one of Bitcoin’s core developers, revealed that a solution has been found. The developer has managed to decrease the size of Confidential Transactions from the normal size if 16x down to only 3x. Maxwell then adds that this change will then improve the privacy measures of Bitcoin’s blockchain network while maximizing its applicability at the same time. He explains:
“This work also allows arbitrarily complex conditions to be proven in the values, not just simple ranges, with proofs logarithmic in the size of the arithmetic circuit representing the conditions being proved–and still with no trusted setup. As a result, it potentially opens up many other interesting applications as well.”
Confidential transactions: Applicable with Litecoin as well
As mentioned before, Litecoin and Bitcoin have nearly identical structures with each other. Hence, Confidential Transactions is a privacy solution that Litecoin can also implement onto their system, increasing network security.
Privacy-focused problems have been a recurring phenomenon in the cryptocurrency community, and despite numerous attempts to fix this (an example would be MimbleWimble), Bitcoin and Litecoin still suffer from the same issues. The transparency of Blockchain networks have made it easy for anyone to trace addresses and transactions, and in addition, KYC and AML policies are strict enough to make it hard for businesses to integrate their own privacy features for their own user base.
Upon implementation, Maxwell hopes that Confidential Transactions would give a huge improvement in the networks by concealing the amounts of processed transactions, restricting what authorities or third party service providers can see on the network. This overall will lessen the amount of data that can easily be traced.
Maxwell then details:
“This approach makes transaction amounts private–known only to the sender, the receiver, and whichever parties they choose to share the information with through sharing watching keys or through revealing single transactions. While that, combined with pseudonymous addresses, is a pretty nice privacy improvement in itself, it turns out that these blinded commitments also perfectly by avoiding the issue of joins being decoded due to different amounts being used.”
Benefits for Litecoin
As of the moment, Bitcoin is the leading cryptocurrency, with a rather large open source community that is already developed almost a decade since its creation. Getting more and more recognized, most commercial companies tend to gravitate towards the digital currency when it comes to developing their own software. However, Litecoin is already making a name for its own, mainly as a testbed for solutions mainly intended for Bitcoin, and with this constant exchange, it’s not hard to see how the two digital currencies will cushion each other more in the near future.