April 25, 2024

Litecoin integrates MimbleWimble to protect personal data

Litecoin integrates MimbleWimble to protect personal data

The Litecoin Foundation has published two proposals for improving the blockchain protocol on GitHubLitecoin (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 linked to crypto wallet addresses. Services such as chain analyzer calculate the likelihood of risk based on whether addresses are blacklisted. As a result, some businesses believe that the coins were obtained illegally and return them to the sender or close the account.

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

Thanks to MimbleWimble, network users will receivethe ability to perform transactions in a new format. They will be stored in “Expansion Blocks” (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 an outgoing transaction is 126 bytes. Transfers between MimbleWimble addresses will follow normal 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.