Litecoin May Become Bitcoin’s Testnet for SegWit and Lightning Network – Crypto Insider – Bitcoin and Blockchain News

Posted by Kyle Torpey | Apr 12, 2017

Altcoins have often been viewed as nothing more than testnets for Bitcoin, and Litecoin may find itself illustrating this point quite clearly in the coming weeks.

While activation signalling for Segregated Witness (SegWit) by bitcoin miners has stalled at around 30 percent support with the proposal facing outright opposition from the ViaBTC mining pool and others, SegWit is currently around 10 percent away from its activation threshold on the Litecoin network.

According to recent comments made by Bloq CEO Jeff Garzik and Coinbase Director of Engineering Charlie Lee on the latest episode of the Unchained podcast with Laura Shin, if SegWit is activated on the Litecoin network, it could offer a stronger level of testing for the proposal where real money is on the line.

Why Has the Activation Process for Segregated Witness Stalled?

During the recent podcast, Shin pointed out that activation signaling for SegWit on the Bitcoin network has stalled out at around 30 percent. Lee, who is also the creator of Litecoin, shared his thoughts on the cause of the stalled activation process.

“Right now, Segregated Witness is being activated with miner signaling, so we’re basically asking the miners to tell the rest of the network when they’re ready to enforce Segregated Witness,” explained Lee. “There’s this whole controversy with [Bitcoin Unlimited], and some of the pools and miners who support [Bitcoin Unlimited] feel that Segregated Witness would undermine their position, so they’re not signaling for it.”

The miner signaling process mentioned by Lee is outlined in Bitcoin Improvement Proposal (BIP) 9. Under this activation process, 95 percent of the network hashrate must signal their readiness for the change before it can be activated.

“Unfortunately, bitcoin mining is pretty centralized today in terms of a few big pools and most of the miners being in China, so being centralized, it makes it such that a few big players can actually decide whether or not to push through Segregated Witness or a fork for [Bitcoin Unlimited],” Lee added.

Trial of Segregated Witness on Litecoin

Earlier in the podcast, Garzik, who is also a former contributor to Bitcoin Core, noted that Litecoin may end up testing out SegWit before it’s activated on the Bitcoin network.

“Litecoin is actually trialing Segregated Witness on the Litecoin network,” said Garzik. “One of my criticisms of SegWit is not a ‘good or bad’ but much more of a nuanced view in that it needs more testing, and the Litecoin network is going to provide that it looks like.”

From a purely practical perspective, #litecoin provides some fantastic field testing for #bitcoin #SegWit

Lee added that the Litecoin community was hopeful that the activation of SegWit on Litecoin would be easier than it has been for Bitcoin. Lee also pointed out that F2Pool, which is the largest Litecoin mining pool and one of the largest Bitcoin mining pools, recently started signaling for SegWit activation.

The politics of SegWit activation on Bitcoin have found their way into the activation process on Litecoin as well. For example, F2Pool co-founder Wang Chun tweeted that he was reconsidering whether or not he should be signaling for SegWit on Litecoin in response to Bitcoin Core contributor Greg Maxwell’s claim that a bitcoin mining hardware manufacturer may have been unsupportive of the activation of SegWit on the Bitcoin network because the change would diminish the efficiency of their mining equipment.

The litecoin price fell 15 percent in the hour after Chun’s tweet, but it then recovered after, in a conversation with Lee, Chun clarified that he would continue signalling for SegWit activation on Litecoin for now.

Much of the excitement around the possible activation of SegWit on the Bitcoin network has to due with the Lightning Network, which is a transaction caching layer on top of Bitcoin that is made more efficient by the SegWit proposal. According to Lightning Network developer Olaoluwa Osuntokun, all of the active implementations of the Lightning Network have gone through the testing process with SegWit enabled. In Lee’s view, Litecoin may offer another, further testing ground for the layer-two transaction network.

“Once SegWit actually activates on Litecoin, then people can actually test out Lightning [Network] transactions on the Litecoin network because then you can transfer real value, so you can actually test and there may be people who might want to steal from a Lightning Network transaction, for example,” Lee stated. “There will be real-world testing, and I think with enough real-world testing, people and miners and pools on Bitcoin might feel more comfortable activating SegWit, and therefore Lightning, on Bitcoin also. That’s what I’m thinking.”

Image from Pixabay.

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About The Author

Kyle Torpey

Kyle Torpey is a freelance writer and researcher who has been following Bitcoin since 2011. His work has been featured in VICE Motherboard, Business Insider, NASDAQ, New York Post, The Next Web, American Banker, and other media outlets. You can follow Kyle on Twitter, send him an email, sign up for his daily Bitcoin newsletter, or visit his personal website.

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