Most cryptocurrency users acknowledge that both Bitcoin and Litecoin lack serious privacy features. Neither of these popular currencies mask user identities completely, whereas altcoins such as Monero do exactly that. It turns out we may see some of Monero’s technology show up in both Bitcoin and Litecoin soon. Confidential Transactions are an option well worth exploring by the developers of both currencies. It’s an interesting situation, to say the very least.
Confidential Transactions Bring More Privacy to Bitcoin and Litecoin
Over the past few years, we have seen multiple Bitcoin developers port functions found in altcoins to the world’s leading cryptocurrency. In some cases, the Bitcoin developers even refer to altcoins as “testbeds” for features to be ported to BTC at a later date. It now seems some developers have their sights set on Monero technology, as both Bitcoin and Litecoin may integrate Confidential Transactions in the very near future.
Monero, a respected altcoin, has been using Ring Confidential Transactions for quite some time now. It is just one of the cornerstones of this successful cryptocurrency, although there is a lot more to making cryptocurrencies private and anonymous than just copying a specific function. It remains to be seen how this particular feature will be introduced in Bitcoin and Litecoin. Moreover, the Monero team is already looking for a better solution than RingCT, which has been referred to as “RuffCT” by the community.
Charlie Lee, the creator of Litecoin, appears to be a big fan of Confidential Transactions. It seems this new feature will be integrated with Litecoin through a future soft fork, although no specific timeline has been announced at this time. Moreover, it is good to see the developers of both currencies opt to go with a soft fork rather than a hard fork, as there are always certain risks associated with the latter. That’s not because hard forks are bad, but they do require the majority of the network to first upgrade its software.
So far, the reputation of Confidential Transactions has been mixed. On one hand, they provide additional privacy and make it more difficult to trace transactions. On the other, they will make these currencies more appealing to criminals of all kinds. Monero is gaining traction on the darknet, and some marketplaces have even moved away from Bitcoin in favor of this privacy-oriented cryptocurrency. Whether or not a privacy-oriented Bitcoin would make a big impact remains to be determined.
At the same time, Confidential Transactions may make it easier for money to flow across borders without being scrutinized. They may even result in far less market volatility, although that remains to be seen. They would certainly make taxation of cryptocurrencies almost impossible, which is not something most governments would like to see happen. Then again, there is nothing officials can do to control or prevent the use of cryptocurrencies, even though many people still seem to think otherwise.
All of this shows that a lot of people are keeping a very close eye on Monero and its technology. While this altcoin was dismissed as a fad less than a year ago, it is certainly here to stay and make an impact. With more cryptocurrencies focusing on privacy, we will see the dawn of a whole new era of digital money. However, it seems Monero will always be one step ahead of other currencies looking to imitate its technology.