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Litecoin Transaction Settled Under a Second With Segwit, Effect on Bitcoin?

Litecoin Transaction Settled Under a Second With Segwit, Effect on Bitcoin?

Litecoin Transaction Settled Under a Second With Segwit, Effect on Bitcoin?

On May 10, the Bitcoin Core development team’s transaction malleability fix and scaling solution Segregated WItness (Segwit) was officially activated on Litecoin, as revealed by Litecoin founder and Coinbase director of Engineering Charlie Lee. He also revealed that the first Segwit transaction was settled almost immediately after the activation of Segwit on Litecoin.

Over the past few months, both Bitcoin and Litecoin communities highly anticipated the implementation of Segwit due to its ability to provide an infrastructure for two-layer solutions such as the Lightning network and TumbleBit. Lightning was particularly demanded by the community and industry because it allows the processing of micropayments using unique payment channels.

A day after the activation of Segwit, on May 11, Blockstream infrastructure tech engineer Rusty Russell, who is better known as an Australian free software programmer and his contributions in the development of the Linux kernel's networking subsystem and the Filesystem Hierarchy Standard, published an analytical blog post entitled “Major Milestone: The First Lightning Payment on Litecoin pays from Zurich to San Francisco,” to introduce the first instance of a Lightning payment on Litecoin.

In it, Russell revealed that a Litecoin transaction worth about US$1.3 cents were settled in under a second.

Russell stated:

“Christian patched the Blockstream Lightning implementation to work on Litecoin, and two hours after Segregated Witness activated on Litecoin, he opened a Lightning channel between lightning clients in Zurich and San Francisco worth about 1.3 US cents. Once the channel was set up, he transferred 0.00000001 LTC (1 litecoin-satoshi) in under a second. Further test involved another Zurich->SF payment of 1000 litecoin-satoshi, then a return of the original 1 to Zurich: once a channel is open, an almost-infinite number of further transactions are fast and trivially easy.”

While Lightning payment channels work well for a limited number of payments, they particularly excel in processing a bunch of micropayments or small transactions by merging all of the transactions within a Lightning payment channel into one single transaction.

Christian Decker of Blockstream, another infrastructure tech engineer at Blockstream mentioned in Russell's blog post, developed the first full and secure Lightning payment on a non-test network, meaning Litecoin mainnet, to demonstrate the true potential of the Lightning network.

Blockstream and the rest of its development team officially began the development of the Lightning protocol back in 2015. However, Lightning hasn’t been implemented onto the bitcoin protocol due to the lack of Segwit. According to Ryan Shea of Blockstack, Segwit’s fix of transaction malleability is absolutely essential for the launch of two-layer solutions such as Lightning. Shea wrote:

“It fixes the substantial transaction malleability problem once and for all, enabling second-layer scaling solutions like Lightning.”

Previously Luke Jr, a Bitcoin Core developer, noted that the Lightning network could potentially optimize bitcoin blocks by up to 90 percent. Currently, the community is awaiting for the activation of Segwit on bitcoin to observe the effect of Litecoin on the bitcoin protocol.

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

Bitcoin core Litecoin Segregated Witness