In Effort to Differentiate, Litecoin Makes a Move to Privacy – CoinDesk

CoinDesk

Litecoin (LTC), a nine-year-old cryptocurrency whose price returns have chronically underperformed the bigger and better-known bitcoin in recent years, is hitching its wagon to a new star: privacy.

The blockchain industry subsector of “privacy coins” – cryptocurrencies with embedded technology that shields identifying information from public view – is becoming one of this year’s hottest buys. One of the biggest privacy coins, zcash (ZEC), which offers “shielded transaction” capabilities, has nearly tripled so far in 2020, while monero (XMR), which uses a technique called “ring signatures” to obscure sender and receiver data, has doubled. 

How To Get Free Crypto  

Litecoin founder Charlie Lee told CoinDesk in an interview the project is now looking to adopt key privacy-enhancing features, which he sees as increasingly attractive to cryptocurrency users. The enhancements are already being tested, and an upgrade to the main network is scheduled for next year.  

If the effort succeeds, it might inject a jolt of enthusiasm into a project that has suffered from a lack of momentum and enthusiasm in digital-asset markets. Litecoin is up 21% this year after a 38% gain in 2019, which pales in comparison to bitcoin’s 59% year-to-date gain and a 94% increase last year.  

“I want to make it so that users don’t have to worry about giving up their financial privacy by using litecoin,” Lee said. “Even if you’re not doing anything illegal, you don’t want people to know how much money you have or what your paycheck is.”

Read more: Monero Leads Rally in Privacy Coins, Rising to Two-Year Highs

A innate feature of blockchain technology is that transfers of cryptocurrency across the computer networks are typically visible to anyone with Internet access, making it easy to track and monitor specific wallet addresses – and sometimes trace those addresses back to identifiable entities.

Coinbase Banner  

So digital-asset developers have been working for years to invent new ways to preserve the advantages of blockchain – the ease and speed of money transfers without the need for banks as intermediaries – without the glaring transparency. 

Such features are becoming even more desirable as regulators and law-enforcement agencies ramp up scrutiny of cryptocurrency trading and compliance with tax and anti-money laundering rules. 

Lee, a former Google and Coinbase software engineer who spearheads litecoin, is a closely watched entrepreneur partly because his experience dates back to the early years of cryptocurrencies, following bitcoin’s launch in 2009.   

Litecoin is often referred to as the silver to bitcoin’s gold, and it’s been used over its history as a grounds for testing technologies that later became a mainstay of bigger blockchain networks, including bitcoin’s. The network processes new data blocks four times faster than the Bitcoin system, but its smaller size makes it less secure. 

FreeBitcoin Banner  

The new privacy features are designed to operate in accordance with cryptocurrency exchanges’ increasingly stringent compliance with global regulators. 

Litecoin is relying on a technology called mimblewimble, which reduces the amount of data that’s publicly visible on the main blockchain network, through the use of “extension blocks” that help to hide inputs and outputs.

“The analogy I like to use is it’s similar to wrapping and unwrapping the coin,” Lee told CoinDesk. 

Read more: The Web Wasn’t Built for Privacy, but It Could Be

It’s not yet clear whether regulators will move to curtail the use of privacy features, which potentially could be used to conceal transfers of illicit funds or shelter money from tax authorities. 

Both zcash and monero, which include privacy directly on their protocols, have faced regulatory pressure. Europol, a European Union law enforcement agency, recently declared privacy technologies, including privacy-focused coins, a “top threat” in an assessment of Internet-based organized crime. In 2019 the cryptocurrency exchange Coinbase delisted zcash for trading in the U.K. without giving a reason, but speculation immediately centered on the digital token’s identity-shielding features.     

For litecoin, it might be another chance for differentiation from bitcoin, which has captured the attention of many cryptocurrency traders as a hedge against inflation.

“I don’t think bitcoin will follow this path of what we’re doing, because it’s a bit drastic,” Lee told CoinDesk in a video chat. 

Put another way, litecoin has more to prove.

Disclosure

Go to Source
Author: Daniel Cawrey


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.