Litecoin creator and Director of Engineering at Coinbase, Charlie Lee, recently held a meeting with several of the largest exchanges and mining pools that use Litecoin in China.
Dubbed the “Litecoin Global Roundtable,” the group came to a simple conclusion, immediately activate Segregated Witness (Segwit). It was also agreed that once the Litecoin block capacity is over 50%, the attendees will “prepare for a solution to increase the 1MB block size limit through a hardfork or softfork.”
Despite the simplicity of the agreed terms, the eight-hour long webchat ran far longer than expected. “Well that took forever!” Lee tweeted. “Felt like we had to decide on the new pope before we are let out!”
The results of the agreement were seen on their blockchain almost immediately. 99.7% of the entire network’s hashrate is now signaling Segwit, far more than the 75% needed for activation.
A Bitmain-led opposition was previously blocking the effort from reaching the minimum goal. The cryptocurrency mining hardware manufacturer is now listed as one of the signers of the litecoin roundtable agreement.
– Charlie Lee, Litecoin
Segwit is a major upgrade designed for Bitcoin. Alongside a range of changes, the software upgrade may relieve Bitcoin’s transaction limitations. The code was completed just over one year ago, and the finalized upgrade to bitcoin that includes it was available in October.
Despite offering a way to raise the size of Bitcoin’s one-megabyte blocks, adoption has been languishing as the scaling debate continues. Segwit is fiercely opposed by many miners and followers of alternative Bitcoin software, such as Bitcoin Unlimited.
Several cryptocurrencies have announced Segwit adoption. Groestlcoin was the first to adopt the change. Launched in March 2014, the cryptocurrency currently has a US$1.6 million market cap. The Groestlcoin code is very similar to Bitcoin’s, making Segwit implementation easy. Its main claim to fame is having “the single most efficient algorithm for GPUs in the cryptocurrency market,” according to the coin’s developers.
On January 17, Groestlcoin admins released an updated client for users, with the Segwit code included. By the time the developers were celebrating the coin’s 3rd anniversary, March 22, they had claimed that Segwit had been fully activated. At the same time, they also released a web-based wallet and alternatives for iOS and android.
The Groestlcoin spot price subsequently increase five fold , and continues to trade above pre Segwit levels. In spite of leading altcoin exchange Poloniex not listing the coin, recent trading spikes on April 5th and 12th saw the coin’s market cap exceed three million dollars. The coin is currently trading for about two and a half cents each.
Vertcoin is the second cryptocurrency to finalize code for upgrading to Segwit. Vertcoin is about as old as Groestlcoin, but has double the market cap, at $3.3 million, and trades for about ten cents each.
After releasing their upgrade on March 2, it was apparent by April 21 that some large miners refused to upgrade, effectively blocking Segwit on Vertcoin. In response, the development team initiated a controversial User Activated Soft Fork, allowing them to implement Segwit without the miners’ consent.
As of May 31, all Vertcoin nodes and miners will be required to upgrade to the new version, adding and activating Segwit immediately. The remaining miners will still be able to create Vertcoin blocks, but mining willbe less profitable under higher traffic usage. However, if these miners, who hold the majority of the hashing power, decide to become hostile to the network, there is a risk that they could start a Hard Fork.
Cryptocurrencies that have successfully added Segwit will easily be able to deploy their own Lightning Networks. The developers of the most advanced Lightning Network software client available today, Acinq, recently announced that they have successfully tested their solution on the Litecoin testnet. “We didn’t even have to change the code!,” the dvelopers state.
The Lightning Network allows for coins to be trustlessly swapped for coins on separate Lightning-enabled blockchains instantly and easily. The process does not require an exchange. “Cross-chain atomic swaps can occur off-chain instantly with heterogeneous blockchain consensus rules,” the Lightning Network development site explains.
Lee states that these cross-chain transactions would be a major use case for both Bitcoin and Litecoin. “Two users can trade BTC and LTC instantaneous and without risk,” he explained in a blog post in January. “Efficient decentralized exchanges are now possible.”
– Charlie Lee, Litecoin