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- Litecon’s Mimblewimble upgrade might have caused it more harm than good
- Korean exchanges are delisting it while Binance is not supporting it
- The MWEB integration could prove to be a mistake for the out of favour alt coin
Litecoin’s integration of Mimblewimble last month was supposed to usher in a new level of privacy and security for the aged alt coin. However, with some exchanges deleting Litecoin as a result and others refusing to support the upgrade, could the adoption of Mimblewimble prove to be Litecoin’s eventual undoing?
MWEB Helps Obfuscate User Details
Litecoin upgraded its blockchain on May 20, activating a soft fork that implemented Mimblewimble Extension Blocks (MWEB), a privacy-centric protocol that obscured critical information inside a transaction such as the addresses of the parties involved and the amount of tokens being sent. This information is encrypted through a series of complex mathematical equations rather than being broadcast in their native form on the blockchain.
Litecoin introduced Mimblewimble in order to help protect the privacy of senders, using the example of a company paying employees and each one being able to see how much the others were being paid. This of course ignores that fact that you can’t tell from an address who any of those individuals actually are.
Delistings and Warnings Follow Integration
However, while Litecoin may have been celebrating the integration, big players in the crypto ecosystem have not. Several Korean exchanges recently announced that they had no choice but to delist Litecoin because the MWEB upgrade meant that the aged alt coin now falls foul of the country’s laws on privacy coins.
To make matters worse, Binance announced yesterday that it would not support Mimblewimble transactions, stating that “Any LTC deposits made to Binance through the MWEB function will not be received or returned as we are unable to verify the sender’s address, resulting in the direct loss of funds.”
Like the Korean exchanges, this is not Binance’s choice – incoming regulations mean that exchanges will soon have to collect information about the sender, with coins that don’t allow this facility having the potential to be delisted.
Litecoin Slips Further Into Obscurity
This action by exchanges means that there is a risk of Litecoin becoming even more irrelevant than it already is. There is a possibility of redemption however – blockchain analytics firm Elliptic announced at the end of May that it was able to track Mimblewimble transactions and extract the relevant data, allowing entities to support the MWEB version of Litecoin and remain compliant with anti-money laundering (AML) regulations and sanctions.
However, with exchanges unlikely to want to part with more money in order to support this, it is likely that more will simply decide not to support MWEB Litecoin transactions. While this doesn’t mean the death knell for Litecoin, it will further call into question the relevance of its Mimblewimble implementation and whether it can and will be used by anyone.