Charlie Lee, via twitter, announced that the Litecoin foundation has plans of implementing confidential transactions on the network to make LTC more fungible. He stated that fungibility was the only feature missing from both Litecoin and Bitcoin. The tweet making the announcement can be found below.
Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy.
I am now focused on making Litecoin more fungible by adding Confidential Transactions. 🚀
— Charlie Lee [LTC⚡] (@SatoshiLite) January 28, 2019
Fungibility is defined as the ability of a good or asset to be interchanged with other individual goods or assets of the same type. Fungible assets are exchangeable for each other and simplify the exchange and trade processes, as fungibility implies equal value between the assets.
More on Implementing Confidential Transactions
The addition of Confidential transactions will be implemented sometime this year through a full node implementation (soft fork). Confidential transactions obfuscate the amounts being transacted over the network but not where the coins are being sent.
The team at the Litecoin foundation further explained how Confidential Transactions (CT) will work on the LTC network.
While it’s not complete privacy, when spending coins parties no longer would have insights into how much the other owns, something very valuable for individual security as well as business operations.
CT is an optional parameter in transactions which means regulated bodies would still be able to deal in the asset so long as transactions made to and from them are clear and publicly viewable on the blockchain.
Downside of Implementing Confidential Transactions
The drawbacks of implementing CTs according to the Litecoin Foundation are as follows:
- Increase in the size of bandwidth requirement and the Unspent Transaction Output set due to the size increase of the output value to 33 bytes from 8 bytes
- An increment in validation/transaction costs
- If Pedersen commitment of range proofs is broken by quantum computing (QC) an attacker would be able to print new coins into existence without restriction. However, this can be fixed through a soft-fork in a quantum-safe range-proof algorithm before quantum computing becomes strong enough
What are your thoughts on the LTC soon having confidential transactions? Will Bitcoin also adopt such a feature since Litecoin is usually the first to adopt new blockchain technology such as the Lightning network? Please let us know in the comment section below.
Disclaimer:This article is not meant to give financial advice. Please carry out your own research before investing in any of the numerous cryptocurrencies available.