Segregated Witness, SegWit for short, was an implementation recently by Litecoin that was hopeful to create an improved – faster, better, efficient – cryptocurrency.
The overall activation was smooth, on the 10th of May, 2017 as Litecoin’s founder Charlie Lee tweeted on Twitter of the first successful transaction under the SegWit update.
SegWit itself is important to Litecoin because it works as a necessary step between how users would experience transactions before, and how the second layer protocol called the Lightning Network (LN) will make future transactions significantly faster.
Charlie Lee has also tweeted and publicly stated that the familiar user-friendly wallets (General User Interface, GUI) are expected soon of LN; with the help of developers from MIT and Blockstream inclusive working on command-interface level code, making this possible.
“Litecoin is one hundred times better for our application today than bitcoin.”
“…our technology works on litecoin with almost no changes.” https://t.co/TiK7HNK393
— Charlie Lee (@SatoshiLite) May 18, 2017
The anticipation of this implementation urges many people who have Litecoin – particularly those who have not necessarily invested, but traders in the market as well – not to cash out (the price will likely rise), as the general community behind Litecoin has shown and continues to show a vast majority support of the update.
Scalability Is Important
The nature of Litecoin’s move and how it initially played out gained the mainstream attention of the Bitcoin community, as scalability issues have been a long-time debate – whether or not the route of a similar update ought to be implemented into Bitcoin itself per say.
The removal of centralized exchanges, by the community, would activate an atomic exchange; this is where traders, investors, and people gain the ability to interchange cryptocurrencies, per transaction, without the necessity of a third-party to differentiate the coins (ideal Mutual Exchange).
Charlie Lee Explains
A general explanation from Charlie Lee himself on what exactly SegWit does, and how it’s used:
“To activate SegWit on Litecoin, miners need to signal for it in the blocks they mine. Within a 2 week period, if 75% of blocks signal for SegWit – then [it] is locked, and it will activate after 2 weeks.”
This protocol reduces the size of any given transaction, which ultimately allows more transactions to be included in the blocks that the miners process, resulting in more transactions – which raises the value of the coin due to popularity – being the ultimate goal of any cryptocurrency in general, and as proven by the market.
The long-standing debate with the Bitcoin community is the capacity of the current transaction processing capabilities with the Bitcoin blockchain and its processes.
SegWit, now applied to Litecoin, has found itself as one of the leading proposals for addressing this exact issue.
Segregated Witness For Litecoin Explained In Detail
What About Security?
The security of SegWit is sound, as it may only reference the blockchain directly, per transaction – via the Lightning Network. Although the anonymity may or may not have changed – as SegWit optimistically has much more potential and many more possible features other than the sole popularity of malleability improvements and efficiency – the foresight of the value under its application is such.
The interest of its application comes from the fact that it does not directly affect the previous provision of the coin, nor the current.
Referring Charlie Lee:
“I do believe having SegWit activate on Litecoin will help make [that] possible on Bitcoin too; because SegWit is such a big update, users and miners might prefer to try it out on a coin that has a smaller market cap, and Litecoin is a perfect coin for this […] Although SegWit has been tested extensively on testnet, that is not the same as testing on a network where transactions are moving real value.”
The price of Litecoin has surged during May 2017.
Also see This Segwit and Litecoin Article over on Cryptolix.com