Litecoin - Segregated Witness Adoption
Litecoin is one of the biggest and most stable altcoins out there. The first to employ the scrypt algorithm, Litecoin has become the silver of cryptocurrencies where Bitcoin is gold. Despite serving the same function as Bitcoin, a decentralized p2p payment system, Litecoin has several differences that are worth exploring. Furthermore, recent developments within the community may prove to be game changing for the currency, as new developments may soon be integrated into its protocol.
We are talking about Segwit. The popular scaling solution that could help Bitcoin’s transaction capability go up while fixing persistent issues in the network, like transaction malleability, may end up being activated in Litecoin before it does on Bitcoin.
Segwit, unlike a block size increase, does not require a hard fork to take place and can instead be activated with a soft fork. Segwit removes the witness data from transactions in order for them to be smaller. The witness data is separated from its transaction and moved into an extended block, allowing blocks to contain more transactions than the current limit, roughly the double, provided that the average size of transactions remains the same.
Segwit was integrated and launched in the Bitcoin Core 0.13.1. Since then, miners have been able to signal their support for the soft fork by running the 0.13.1 software. Despite quickly rising to the 25% approval rate, Segwit has been stuck here for a while now and has been dropping.
Despite this, Litecoin is now attempting to integrate the Segwit update into its own blockchain, thus increasing the transaction capability, fixing other threats on the network and paving the way for Lightning Network.
Litecoin miners can signal their support for Segwit by running Litecoin 0.13.2 However, according to litecoinpool, support for the update is low, currently sitting at 3.2%. Contrary to some reports, Litecoinpool itself has not signaled support for the update completely. A vote is being held, and according to it, the pool will only signal support in 21% of its mined blocks, which is equal to the number of the miners that voted yes on the proposal.
Some pools have publically stated that they will not signal their support. However, the largest Litecoin mining pool, F2Pool has already stated that it will support the update. The F2Pool controls 43% of the network, which means that without it, Segwit would not be activated. It all comes down to the smaller pools now.
Once a majority of 75% of miners has signaled their support for the update, Segwit will be locked, meaning that segwit transactions will be valid. At 95%, non-segwit blocks are deemed invalid. The 75% threshold should send a clear message that Segwit is happening, leading the remaining nodes to update.
Despite the currently low approval rate, many believe that Litecoin will activate SegWit sooner than Bitcoin, which could be considered as a test. If it works on Litecoin, miners may be more confident and activate it on Bitcoin as well, although a 95% approval rate is needed.
Update: Currently, SegWit has a 22% support rate. (01/03/2017)
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