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Litecoin Successfully Activates Segwit

Last Updated March 4, 2021 4:56 PM
Andrew Quentson
Last Updated March 4, 2021 4:56 PM

Litecoin is the biggest digital currency to successfully activate segwit which went live around 6 PM London time on the 10th of May 2017 with segwit transactions now available for use depending on the litecoin wallet.

The upgrade was overall smooth, despite a slight hiccup with one miner, F2Pool, which for a brief period returned a BTC template to LTC miners, an oversight that was quickly fixed with no known problems at the time of publishing.

It is now immediately available to use if your service provider has upgraded to support segwit with Charlie Lee, Litecoin’s founder, tweeting  out the first segwit transaction minutes after its activation.

The first segwit transaction on litecoin – image from cryptoid

The transaction is somewhat heavy, taking up 3KBs of space when average transactions use around 300-400 bytes. However, Marek Palatinus, Slush Pool founder, tweeted  out a segwit transaction undertaken by a Trezor hardware wallet which had an average size.

The Lightning Network (LN) is now to be deployed, a second layer protocol on top of litecoin which can handle thousands of transactions per second by using the base, on-chain layer, only as a settlement for payments.

Charlie Lee publicly stated  there were around six LN versions working on litecoin, including from developers at MIT and Blockstream. Most of them are however at command interface levels with GUI wallets expected soon.

After LN deployment, the roadmap of Bitcoin Core developers is expected to be followed. That is further capacity compression through Schnorr signatures which aggregates signature data, MAST, which aggregates scripts, and other optimizations mainly focused on complex multi-signature transactions to support layer two protocols.

The upgrade has generally been uncontroversial in the litecoin community and seemingly overwhelmingly supported by litecoin users. After some public debate between miners and developers, they all agreed to upgrade the network on the condition that on-chain capacity would be increased if blocks reach 50% capacity.

Soon after that agreement, segwit was locked in two weeks ago with almost all of the hashrate support, turning the upgrade into a flag-day event. In anticipation, price increased by 40% yesterday, from around $22 to a high of $38.

Litecoin’s price action during segwit activation – image from cryptowatch

Once segwit was activated, the price fell to a low of $28, somewhat stabilizing today at around $32. That’s after rising from around $4 two months ago once the segwit activation process began.

The upgrade has gained the attention of the bitcoin community due to their own scalability debate which remains unresolved after two years. Litecoin hopes to show them how LN works in practice, but whether that will make any difference remains to be seen.

Featured image from Shutterstock.