Litecoin, one of the world’s oldest cryptocurrencies, has now activated Segregated Witness. Observers are now watching to see its effect on litecoin price, and whether bitcoin will follow suit.
Also read: Litecoin Begins Activating SegWit as Block Threshold Is Surpassed
Litecoin (LTC) mined the last block it needed to signal SegWit activation on 26th April. Yesterday, it activated the feature for real.
Segregated Witness, or SegWit, separates transaction block data from the cryptographic signatures that verify them. Both still make up every transaction, but removing the signature leaves more room for transaction data itself. And thus, more transactions in every mined block.
This is important to Bitcoin, which is creaking under its current 1MB transaction block size.
Many see SegWit as an important, if temporary, solution to Bitcoin’s scaling issue. If Litecoin can successfully navigate the transition, then it will show Bitcoin what is possible. With SegWit functioning, Litecoin developers can focus on other “second layer” transaction processors such as Lightning Networks.
User Flying Tech on YouTube tested the LTC network to see how fast it would process a transaction:
Litecoin Network Speed Shows What’s Possible
Litecoin transaction speed may not prove much. Litecoin has always processed transactions faster than bitcoin — in fact, that’s its main raison d’etre. Litecoin mines a new block every 2.5 minutes, compared to Bitcoin’s 10 minutes. There’s also an 81 million LTC hard limit against Bitcoin’s 21 million cap.
LTC’s true value may be as a Bitcoin testing-ground. Bitcoin miners have been reluctant to activate SegWit so far, and look for a longer-term scaling solution. Some still see LTC as a “backup” for Bitcoin — a cryptocurrency network that performs the same purpose, but which could take over Bitcoin’s role if the original fails somehow.
If SegWit functions well on the Litecoin network, it may win more converts on the Bitcoin side. If it doesn’t, it would kill the idea for a long time.
Do you think SegWit is a good idea for all cryptocurrencies? Let’s hear your thoughts.
Images via Flickr, Wikimedia Commons