September 18, 2020

Litecoin integrates MimbleWimble to protect personal data

Litecoin integrates MimbleWimble to protect personal data

Litecoin Foundation published two proposals on improving the blockchain protocol on GitHub Litecoin (LTC) cryptocurrencies - LIP-0002 EB and LIP-0003 MW.

Both proposals are designed to reduce risk.leakage of personal information of users in a public decentralized network with an open transaction history. Authors of the initiative, Andrew Young, David Burkett, and Charlie Lee, believe that the transparency of the LTC blockchain impedes the increase of its functionality in the state-regulated market.

In an interview, they stated the following: “Personal data collected from IP addresses, exchanges and trading systems can be stolen and then tied to the addresses of crypto-wallets. Services such as the chain analyzer calculate the probability of risk based on whether the addresses are blacklisted. As a result of this, some commercial enterprises believe that the coins were obtained illegally and return them to the sender or close the account. ”

To solve this problem, Litecoin Foundationworking on the integration of the cryptographic protocol MimbleWimble, also known as “Confidential Transactions”. It allows you to hide money transfers, while they can be verified. Thus, the protocol increases the level of anonymity and prevents the double spending of cryptocurrency.

Thanks to MimbleWimble, network users will receivethe ability to perform transactions in a new format. They will be stored in “Extension Blocks (EBs), which will be located next to regular blocks with a standard average interval (2.5 minutes). Depending on the direction, money transfers using EBs are divided into two types: Peg-In (incoming) and Peg-Out (outgoing). The standard size of an incoming transaction using MimbleWimble is 233 bytes, and the outgoing transaction is 126 bytes. Transfers between MimbleWimble addresses will be made in accordance with the usual protocol rules.

Extension Blocks will be activated as part of a soft fork, so miners do not have to download an upgrade. However, nodes that do not update the software will not be able to confirm transactions in EBs blocks.