Could Bitcoin’s privacy upgrades wipe out competition from Monero, Zcash?
The MimbleWimble implementation on Litecoin has been a work in progress for over a year now, with several updates being shared by the team regarding its development. During a recent podcast, the creator of Litecoin Charlie Lee shared his thoughts on the MimbleWimble protocol, while expanding on the reasons why he decided to work on the privacy upgrade of the coin in the first place.
Lee asserted that Bitcoin and Litecoin are sound money, except for one thing – both of them missed ‘true fungibility.’ Noting that privacy and fungibility go hand in hand and that MimbleWimble implementation will help Litecoin solve this issue, Lee said,
“When when I send Litecoin to you, you can see the change address, you can see the history, you can kind of almost figure out how much money I have, right? You have to be careful about not exposing your finances to someone else and this makes it really hard to use.
He added that this was one thing he wanted to address with Litecoin, commenting that Bitcoin eventually will need something like that, to make it more fungible.
That said, the notion that these upgrades in coins like Bitcoin, Litecoin, and Ethereum might become a threat to privacy coins cannot be ignored. For instance, although there might be a delay in the implementation of development protocols such as privacy-enhancing technologies like Taproot/Schnorr on Bitcoin, Ethereum’s upgrade to PoS, and Litecoin’s MimbleWimble, all look very promising.
These developments could potentially lessen the usage of privacy coins, their community support, and overall hinder their growth in the future. Additionally, scalability is another challenge that privacy coins face, something that is not so much of a problem with other crypto coins. Commenting on the same, Lee added,
“Privacy coins like Monero, Zcash, and Dash have a great privacy, but they don’t scale like at all, right? The block size just becomes huge. Transactions are huge.”
On the other hand, privacy coins are no stranger to regulations. Privacy coins’ transactions have long frustrated financial authorities, all of whom have been waiting to tighten regulations around them. Now, the question here is if the king coin and other altcoins upgrade their privacy features and end up outperforming privacy coins, will they be subject to these regulations? If they will be, what is the use of improving the privacy features in the first place? These are some of the questions that will have to be addressed in the near future.