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MimbleWimble: Will it prove beneficial for Litecoin?

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Litecoin developers have published the draft proposal for MimbleWimble (MW) implementation to solve Litecoin’s scalability.

Litecoin and MimbleWimble

The solution can also increase the privacy of the litecoin network. The solution could be a game-changer for Litecoin if it is implemented. However, there is a backlash to this solution. If the solution is implemented, Litecoin may be delisted on major crypto exchanges.

Exchanges and privacy-focused coins

Many Asian crypto exchanges have been delisting privacy-focused cryptocurrencies such as Monero and ZCash. Privacy-focused coins often attract customers that utilize this power for illegal dealings such as money laundering and terror finance. The delisting has become a trend in Asia after exchanges like Coincheck and Upbit disabled access to these cryptocurrencies.

The travel rule created by the Financial Action Task Force (FATF) requires exchanges to record user data. This includes all their transaction activity. This created a huge controversy as it would challenge the very purpose of a privacy-focused coin’s existence. Due to this rule, even OKEx had to terminate the trading of five privacy coins.

Due to the regulatory storm created by Libra’s announcement, legislators have a hostile stance towards privacy coins. Recently a crime group was arrested by joint efforts of the US and South Korea. The crime ring used Bitcoin to operate; however, as Bitcoin has high transparency, the watchdogs were able to apprehend the victims.

What would happen to Litecoin?

Litecoin would become a privacy-focused coin with the implementation of MimbleWimble. This may have some benefits but may cause Litecoin’s delisting across various exchanges.

This was observed by Litecoin developer “ecurrencyhodler,” who dedicated a Twitter post to the discussion. The tweets noted the stance of exchanges such as Coinbase towards privacy-focused coins and said that MimbleWimble might cause Litecoin to face the same conditions.

Ahmad Asghar

Ahmad Asghar

A first generation gamer at heart and tech buff by nature, have been involved in the tech sector for better part of a decade. With that insight and knowledge, he now covers blockchain, cryptocurrency and everything fintech so others can make sense of the industry.

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