According to Charlie Lee, former executive creator of Litecoin, the most innovative works by Bitcoin developers and projects will benefit directly from the structural similarities between Bitcoin and Litecoin.
“Every Bitcoin developer also works on Litecoin. Absolutely nothing they can do about that. If you don’t like that Litecoin piggybacks off of Bitcoin developers’ hard work, it is because you care more about Bitcoin making you rich than crypto changing the world.”
Lee’s statement was released after a significant improvement with Confidential Transactions solution. On the Bitcoin Mailing List, Bitcoin Core Developer Greg Maxwell revealed a surprise with the solution, the size of confidential transactions decreased to 16x for normal size 3x. Maxwell added that the reduction in secret transactions increases the application of the solution and improves the privacy measures of the Bitcoin Blockchain network.
“This work also allows arbitrarily complex conditions to be proven in the values, not just simple ranges, with proofs logarithmic in the size of the arithmetic circuit representing the conditions being proved–and still with no trusted setup. As a result, it potentially opens up many other interesting applications as well.”
Confidential transactions also applicable with Litecoin
Like Lightning and SegWit, Confidential Transactions are the solution that will be applicable to Litecoin, given its structure those are nearly identical with Bitcoin. However, after Bitcoin’s integration of Confidential Transactions, Litecoin will be able to implement the same solution, improving the privacy of the Litecoin network and its transactions.
For many years, despite the emergence of privacy-focused solutions such as Mimble Wimble, privacy is a problem for Bitcoin and Litecoin because both transparent Blockchain networks of cryptocurrencies find network addresses and transactions across the network through public blockchain explorers. Additionally, strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies enforced by governments has challenged businesses to enforce the privacy measures required for the benefit of the user.
Following its integration, Confidential Transactions effectively hide the transaction amount and provide a major improvement to privacy. Although Bitcoin addresses and businesses are still detected by Blockchain explorers, the amount of business is hidden because confidential transactions officers or third-party service providers restrict any coverage of bitcoin users.
“This approach makes transaction amounts private–known only to the sender, the receiver, and whichever parties they choose to share the information with through sharing watching keys or through revealing single transactions. While that, combined with pseudonymous addresses, is a pretty nice privacy improvement in itself, it turns out that these blinded commitments also perfectly by avoiding the issue of joins being decoded due to different amounts being used.”
Advantages for Litecoin
Bitcoin has a more vibrant, active and large open source development community than Litecoin because the evaluation of the Bitcoin market is significantly larger than the Litecoin. Because the developers, open source projects and commercial companies are deploying software and developing a code around the most important platform; Bitcoin can see more solutions and commitments proposed by the Developer community.
The structure of the Litecoin is directly beneficial to bitcoin because it acts as a test of Bitcoin solutions. For example, prior to Bitcoin, Segwit was incorporated into the codebase of Litecoin and the consistency of the Litecoin’s codebase for Segwit’s integration eventually increased Segwit’s support for the Bitcoin community.