At last, the highly anticipated MWEB upgrade has officially activated on the Litecoin network as a soft-fork.
After several months of dialogue with different Litecoin miners in the pursuit to gain consensus, the 75% miner signaling threshold was met on May 2nd and MWEB officially locked in for activation at block height 2257920. The signaling process for MWEB went smoothly, indicating that the community is predominantly in favor of its addition to Litecoin.
MWEB (Mimblewimble Extension Blocks), which was first introduced in November 2019 as a Litecoin Improvement Proposal, is a fungibility-improving technology that enhances confidentiality between the senders and receivers in a transaction. Essentially, MWEB can be seen as a literal extension from Litecoin’s main chain, or a parallel highway, via which you can send coins to the extension block and back to the main chain. MWEB will provide users the option of sending “confidential” Litecoin transactions, in which the amount being sent is only known between the sender and receiver, as well as the benefit of having private address balances and increasing Litecoin’s transaction throughput.
In today’s crypto environment, most blockchains are openly analyzable, allowing one to see which address is sending to which and how much money is being sent. This can be compared to the modern-day scenario of walking around at a supermarket with your wallet open, displaying your holdings to anyone that decides to take a glance. People around the globe whom you have no connection to can currently visualize how much money you’re transacting and how much money you hold in an address. Not even the existing banking system holds this level of public exhibition, as it would be detrimental for businesses to display this information which is typically kept private for ethical concerns.
Based on how the space works today, a crypto-friendly company wanting to pay its employees in crypto has to publicly broadcast how much it pays each employee, giving fellow employees the ability to see how much their co-workers earn. Or for that matter, if you held a significant amount of crypto, went to your local coffee shop and paid the cashier with it, they’d be able to see how much crypto you hold in that address. One could realize how situations such as these could be problematic for an industry whose goal is to create a more efficient means of payment.
In our modern world, privacy plays an active role in our daily lives and every time we transact at the store, only the payer, recipient, and payment company/bank (the middlemen who are removed from the equation in decentralized cryptocurrencies such as Litecoin), know how much money is being sent. Most financial information such as pay stubs, personal purchases, transfers, etc. is kept discrete and away from the eyes of random onlookers. Companies have their internal systems in place for preserving this information, and now, a solution has arrived for one of the most highly transacted with and liquid cryptocurrencies.
At the core, MWEB is composed of two main sets of technologies, Mimblewimble and Extension blocks. Mimblewimble, which was named after the tongue-tying curse in Harry Potter, was a proposal set forth by “Tom Elvis Judesor“ in 2016, an anonymous Bitcoin contributor who figured out an efficient way of creating a more scalable version of Confidential Transactions with a few added features. On the other hand, Extension Blocks was a proposal set forth in 2017 by Bitcoin Developer Johnson Lau, becoming especially popular throughout the block size wars as a potential method for increasing the Bitcoin block size.
David Burkett, a Mimblewimble expert, and developer of Grin ++ (an MW implementation), took on the task of leading Litecoin’s MWEB development over the past few years and helping this idea come to fruition, being paid via community funding and Charlie Lee’s donation matching. David was also able to add features that weren’t in the original MW proposal such as non-interactive MWEB transactions and Stealth Address’ in an effort to make the experience more user-friendly.
Put simply, MWEB will provide Litecoin users the option of not having to publicly display the amount you’re sending or how much Litecoin you hold in an MWEB address. One has the choice of continuing to make standard transactions on the main chain or moving over to MWEB to gain the advantage of its added confidentiality features. By being an opt-in feature, exchanges and wallets have the option of integrating it and would be highly recommended, but not obliged to do so.
The addition of MWEB to Litecoin can be compared to Venmo’s payments application which provides the ability for users to transact publicly (everyone can see how much money you’re sending) or private (information only disclosed between sender and receiver), and be able to choose your preferred method as long as the wallet of your choice has MWEB integrated. One of the limitations of being an opt-in solution is that MWEB does not provide 100% privacy, but can be good enough for those simply focusing on using Litecoin as a means of payment for ordinary goods and services.
“In terms of fungibility and privacy, I believe MWEB gets you 90% there. For most people that’s good enough. It’s the difference between living in a glass house vs living in a house with windows. For people who need 100% privacy, they can live in a house with no windows.” -Charlie Lee
Due to Litecoin’s vast integration on exchanges, and wallets and being available almost everywhere Bitcoin is, MWEB’s activation places Litecoin in a unique position. Essentially, Litecoin is now the most widely accessible cryptocurrency with improved fungibility and confidentiality features. It is now the easiest cryptocurrency to obtain for one simply not wanting to broadcast to the world how much money they’re sending.
Over the years, the Litecoin community has managed to stay focused in its mission of making Litecoin an excellent all-around form of money and the ideal payments coin. The key feature that was missing from cryptocurrencies such as Bitcoin was confidentiality and now, it has arrived at its lower-fee brother, marking a massive milestone for the crypto payments space. Litecoin has become the most cash-like cryptocurrency and arguably, the most ethical payment solution. With the activation of MWEB, as of today, the crypto space will never be the same again.
For wallets and exchanges wishing to implement MWEB, please visit Litecoin.org or feel free to contact us.
For a deeper dive into MWEB, read The Battle For Sound Money.