Litecoin (LTC) is rolling out a module called “Mimblewimble” that enables a confidential mode for transactions. With this, Litecoin sees itself as a privacy pioneer among widely used cryptocurrencies.
Litecoin (LTC) was launched back in 2011 as a direct offshoot of Bitcoin and has since established itself as a digital means of payment. Quite stoically, Litecoin holds its own in the top 20 most capitalized cryptocurrencies, rarely producing headlines. Now, however, the Litecoin Foundation is celebrating the activation of Mimblewimble via blog post. With its curious name, the module plays on a spell from the Harry Potter universe that forces silence through a knot in the tongue. Mimblewimble, abbreviated MWEB, is supposed to work in a very similar way for transactions with LTC.
This is because MWEB on Litecoin allows the option to initiate confidential transactions. If the sender and recipient agree on a Mimblewimble transaction, the transferred LTC amount is no longer written openly readable in the blockchain of Litecoin. Technologically, this is made possible by creating a parallel chain for MWEB. Mimblewimble is designed as an opt-in, like Segwit, so it does not need to be used, but rather activated individually. Future MWEB wallet addresses will also hide their account balance on demand. Litecoin founder Charlie Lee found a handy comparison for Mimblewimble on Twitter. If you use LTC with MWEB, you move from a glass house to a house with windows and achieve 90 percent privacy. However, if one wanted to remain 100 percent private, one would have to accept a house without windows – and probably use cryptocurrencies other than Litecoin.
The Litecoin Foundation is now already talking about LTC as the first widely used cryptocurrency that brings privacy features and makes it easy to shield private payment transactions from the public. However, in the discussion on Reddit, for example, people rightly object that hardware wallets such as those from Ledger and Trezor do not yet support Mimblewimble for Litecoin. It is also open whether leading crypto exchanges such as Binance and Coinbase will get involved with Mimblewimble for LTC, as regulators are imposing more and more documentation requirements on them. In addition, Monero (XMR) is cited as the most prominent explicit privacy coin in the discussion.
Conclusion: MWEB for Litecoin – progress with limitations
Mimblewimble does not bring absolute anonymity – Litecoin Foundation and founder Charlie Lee emphasize this in unison. And how far the acceptance for LTC will flourish with MWEB also remains to be proven. But at least in concept, Mimblewimble is an important step. Because so far, basically all transactions with Litecoin (as with Bitcoin and most altcoins) can be openly viewed for amount and wallet address of sender and recipient. The often-circulated anonymity of transactions with Bitcoin (BTC) and other cryptocurrencies has long been disproved by a multitude of successes by law enforcement agencies who have learned to read the public ledger. Thus, Litecoin with Mimblewimble seems to be an advance that won’t do criminals any good, but will at least protect them from prying eyes of their neighbors.