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Litecoin Reaches Agreement on Segwit Upgrade, Price Rises

Last Updated March 4, 2021 4:55 PM
Andrew Quentson
Last Updated March 4, 2021 4:55 PM

The litecoin miners and developers have reached an agreement to activate segregated witnesses (segwit) and to increase litecoin’s blocksize of 1MB once its blocks are over 50% of the currency’s capacity.

The agreement is signed by Charlie Lee, Litecoin’s founder, F2Pool, BW, Bitmain, LTC1BTC, Huobi, OKCoin and others. It, however, states that it is not binding on the litecoin network:

“We want to emphasize that this roundtable meeting represents only the consensus of participating members, and cannot make decision on behalf of the Litecoin community.”

The signatories “condemn any illegal aggressive acts like DDoS,” and “do not advocate a flag-day “UASF” that does not go though [sic] any users or community voting process. This type of forced upgrade without community consensus put Litecoin in a risk of split.”

The document  does not provide any reason for activating segwit. It appears it was put to a vote of the participating members, with litcoin’s governance model now seemingly shifting to:

“Litecoin protocol upgrade decision should be made… through the roundtable meeting voting process, and activated by miner voting.”

Interestingly, the document says they unanimously agree. Bitmain and LTC1BTC have been strongly against segwit, but it appears they have agreed to activate it because of the promise the blocksize would be increased if the network operates at more than 50% of its capacity. What would happen if this promise is not kept, the agreement does not say.

The document provides no details regarding this meeting. It’s not clear when it took place, what was discussed, whether non-signatories were in attendance, who organized it. We, here at CCN.com, have not been invited to attend the deliberation nor has seemingly any other journalists or independent observers.

The meeting, therefore, seems to have been a private, closed door meeting, attended by almost all movers and shakers in litecoin. They have now unanimously agreed to go ahead with segregated witnesses, a protocol upgrade that facilitates the lightning network and sidechains while making on-chain scalability more difficult.

Litecoin’s price jumps following an agreement by developers and miners to activate segwit – image from cryptowatch

The market seems to have approved of this decision. Litecoin’s price rose more than 15% with the currency nearing its recent high of almost $13. Moreover, Johnson Lau, a Bitcoin Core developer, has stated he will join the litecoin development team if segwit is activated.

It’s not clear whether other Bitcoin Core developers who are strongly in favor of segwit will follow him, nor is it clear whether they would drop their opposition in bitcoin and allow the currency to increase the blocksize if they do so join the litecoin development team.

If they do, then we may have a three-way race in the public blockchain space: bitcoin, ethereum and litecoin. Allowing each to compete on a free market basis, perhaps in a complementary way or, perhaps, in an 80/20 market share distribution. Time, alone, will tell.

Featured image from Shutterstock.