By Alicia Maher
The future of Litecoin on some of the significant cryptocurrency exchanges remains uncertain with the introduction of new technology. The emergence of the MWEB Litecoin update makes digital assets more private and focus on on-chain security.
Even though most crypto investors are happy to embrace the update, this is not so for others. Centralized and regulated exchanges in some countries may begin delisting due to potential legal problems. And South Korea is one such country.
As revealed by experts, the new update has one issue, which is its hosting block. Block 2257920 is where the exchange will activate the latest update.
However, confidentiality in the transaction is the main issue despite the improvement. The Mimblewimble protocol enables users to send funds anonymously.
Transaction Anonymity
In simple terms, the new MWEB protocol allows users confidentiality on a chain. It is capable of hiding the proper amount of tokens sent. Essentially, this makes the tracking of transactions difficult and nontaxable.
After the crash of the Terra ecosystem, South Korean authorities have put in place strict regulations. The authorities have carried out a sweeping revamp of existing laws by tightening loose ends.
As a result, crypto exchange firms operating in the country must comply with the government’s guidelines.
Developers of the new protocol disclosed that the updates would increase the networks’ transaction speed and throughput. Going by this, Litecoin could choose which direction to follow, the regulators or the decentralized exchanges.
However, some features similar to the anonymous transaction model are also present in the Monero cryptocurrency. It is not available on most centralized exchanges because it is regulated.
Many regulators want to take control of cryptocurrency transactions within their territories. But some digital tokens like Litecoin will take a hit when such implements the proposed guidelines. Central exchanges are subject to regulators’ approval, unlike decentralized ones.
Meanwhile, countries like South Korea are working to prevent a similar event like the Terra case. The most effective way to regulate the space is through controlling crypto transactions. Only through centralized exchanges can regulators achieve their aim.
Litecoin will yank off because its place in large centralized exchanges is questionable, according to multiple reports. The best bet is for Litecoin to move to centralized exchanges, which have Litecoin transactions required.
Nonetheless, Litecoin will be delisted from centralized exchanges only if its transactions are through the Mimblewimble protocol. As a result, the exchange cautioned users about the new development.
Decentralized exchanges are popular in the crypto space due to their decentralized nature. Users are free to process transactions without their details.
This has been the reason why authorities want the industry regulated. Regulators have constantly fought to control how decentralized exchanges should do things without success.
Litecoin should find the best possible way to navigate its way in the current situation. Whether to go with the centralized exchange or not, time will reveal the outcome.