The Segregated Witness (SegWit) update has received lukewarm support thus far since it was announced on Litecoin on January 28th.
After Bitcoin, the SegWit scaling update has now been introduced to Litecoin along with some other cryptocurrencies including Vertcoin, Groestlcoin, and Viacoin.
Right now, Litecoin miners are in the process of voting on the update. Currently at 3%, support is lower than it is in Bitcoin, which rapidly climbed up to 22% in its first two weeks.
The vote has attracted the attention of the Bitcoin community. Litecoin (and other coins) could become a testbed for the potential SegWit soft-fork on Bitcoin, and could offer a sneak peek as to how this update fares in the real world. Moreover, SegWit may have better chances on Litecoin since its activation threshold is just 75% compared to Bitcoin’s 95%.
But this “testbed” mentality may be part of the reason why Litecoin users are not so eager to activate the update, which would make them, in a sense, Bitcoin’s ‘lab rat.’ Dubbed the “silver to Bitcoin gold,” it currently has a market cap of about $198 million USD, which could be negatively affected if the update goes sour.
Nevertheless, the SegWit update is supported by Litecoin creator Charlie Lee.
Yes, it’s unfortunate that SegWit on Litecoin became political too. One of the reasons I’m doing this AMA is to try to pull the politics out of the Segwit on Litecoin. Let’s not let Bitcoin politics pollute Litecoin for no reason.
Meanwhile, LTC1BTC founder Jiang Zhuoer stated that his pool, which controls 10% of the network, will not support the SegWit update. His motives, however, seem to stem directly from the Bitcoin debate.
Still, other pools have demonstrated their support for SegWit. F2Pool, the biggest Litecoin pool with 45.6% of the network’s hash rate, announced it will signal their support for SegWit in the coming weeks.
Since Litecoin has a small number of users compared to Bitcoin, scaling is not exactly a pressing issue at the moment. Though SegWit was introduced to Bitcoin as a scaling solution, it also introduces additional features and paves the way for other upgrades such as the Lightning Network.
The main fix is transaction malleability, which would allow Lightning Networks (LN) to be built on top of Litecoin. And there are a bunch more nice features of SegWit. With SegWit and Bitcoin’s current block scaling deadlock, I see a potential for Litecoin to help Bitcoin break through this deadlock[…]. We have been drafting behind the Bitcoin race car for many years. It’s about time to take a turn out front.
During the AMA, Lee also expressed his opinion regarding the alternatives that have been proposed, reassuring that Litecoin will stick to SegWit.
With such a controversial topic, I can’t see how Bitcoin can possibly go BU and FlexTrans. It will likely just not change, and that’s fine. It’s still the best store of value we have ever seen. Whatever happens, Litecoin is going the SegWit direction. And we welcome any Bitcoin Core devs to join us if Bitcoin, for some reason, goes in another direction.
Charlie Lee is currently holding another AMA thread on this topic (in english) here.
Will Litecoin pave the way for Bitcoin’s SegWit? Or will it fail to reach consensus?