Litecoin is an established digital asset in the cryptocurrency market, first launched in 2011 and modeled closely on bitcoin. And while bitcoin is its more popular and well-known older brother, surprisingly, litecoin has gotten an increased amount of attention as its market cap has grown to one of the largest in cryptocurrency. The cryptocurrency launched “Segregated Witness,” which is a technology that was originally designed for bitcoin but failed to get the initial support required to activate it. After SegWit was successfully launched for Litecoin in 2017, Bitcoin developers rolled out SegWit for Bitcoin later that year.
Right before litecoin activated the technology, the value of LTCs surged, increasing from $22 to $38 within a short period of time. And the excitement wasn’t focused on only what the activation of what SegWit would mean for litecoin, but also on what it meant for bitcoin, since the cryptocurrencies are so similar. But many still wonder what SegWit blockchain technology is and how it works.
SegWit is a technology that helps alter the block size limit on a blockchain by removing signature data from the transaction. The “Segregated” part of the name comes from how the technology works, as it basically “separates” and then “witnesses the transaction” to ensure that it’s safe and secure. Here are a couple of important points about this technology:
The above points would be a benefit to bitcoin, but the cryptocurrency could not gather enough initial support until the technology was proven successful through Litecoin. The amount of support needed was set at 95 percent for bitcoin, but litecoin had a lower threshold — only 75 percent, which they achieved quickly. The founder of litecoin, Charlie Lee tweeted
“SegWit on Litecoin will be locked in in ~19 hours, but we already reached the required number (6048) of signaling blocks.”
After they harnessed the required support, litecoin quickly worked to implement the technology, but many people still wonder what the direct effects are on litecoin.
Most people say that there aren’t any immediate effects of activating SegWit on the litecoin network. But since bitcoin and litecoin are very similar in design, it did give bitcoin an opportunity to better understand how activation may work on their network. In addition, it also provides litecoin the ability to open new doors to applications in the future.
For example, the lightning network is said to have the ability to boost transaction speed by as much as a million times. Some say that litecoin doesn’t really need the lightning network right now, but it could be helpful in the future, and already some are testing the capability of this technology made possible by SegWit.
Bitcoin News reported, “On Tuesday, French Bitcoin technology company Acinq announced that they have tested their lightning network on the Litecoin testnet, which has been running Segwit for weeks. With eclair 0.2-alpha3 to be released, we looked at what was needed to make it run on Litecoin.”
In addition, the lightning network provides a second layer of protocol on top of the digital currency litecoin, which could increase the capacity by tens of thousands of transactions.
Litecoin is not the first cryptocurrency to add SegWit to their source code, and they won’t be the last. For example, altcoins such as vertcoin and many others have already added SegWit to their development road maps. And with litecoin mining, activation may not have provided immediate benefits, but future applications provide clear potential value.
Charles Lee, founder of litecoin, sums it up nicely when he says, “SegWit opens up the doors to many amazing features that can be added to Litecoin.” He added, “These include Lightning Network, MAST, Confidential Transactions, Schnorr Signatures and more. I think Litecoin can show Bitcoin that SegWit is indeed the best way to improve the protocol. So I think it will help get that happening sooner on Bitcoin.”
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