Litecoin activated Segregated Witness, a technical upgrade that Bitcoin miners have debated for years, on its network today. The cryptocurrency surged 788 percent so far this year, trading near $32 af
Litecoin activated Segregated Witness, a technical upgrade that Bitcoin miners have debated for years, on its network today. The cryptocurrency surged 788 percent so far this year, trading near $32 after lingering between $1.50 and $5 through 2015 and into March.
Investors drove the price jump on confidence in SegWit. The update increases block capacity and fixes transaction malleability. That second fix enables Lightning Network, a system designed to process transactions faster and cheaper than the main blockchain.
Charlie Lee, Litecoin's creator and a former Google engineer with a degree from MIT, spent months pushing both Litecoin and Bitcoin to adopt the upgrade. "SegWit is not just a block scaling solution. I would even say block scaling is just a side benefit of SegWit," Lee wrote in a January blog post. "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."
Activating SegWit requires miners to reach consensus. In Bitcoin, 95 percent of miners must signal support over a two-week window. Bitcoin sits at 34 percent support. Litecoin's successful upgrade shifts that dynamic for Bitcoin advocates.
"That example of a successful soft fork in litecoin has made people start to think that we could get a successful SegWit implementation in Bitcoin and that could increase capacity and move us to the next level," Daniel Masters, director at Global Advisors Bitcoin Investment Fund, told CNBC.
Bitcoin climbed above $1,700 this week, adding $1 billion to its market value in 24 hours on Tuesday. The climb extends gains that started in December 2016.
Japanese regulators approved bitcoin as a legal payment method earlier this year, triggering increased adoption. More than ten companies plan to open digital currency exchanges in coming months. Coincheck, based in Tokyo, said it will offer interest-paying deposits for bitcoin holders. GMO-Z.com Coin, a unit of GMO Internet, launches a bitcoin trading platform on May 24.
Vertcoin activated SegWit on May 7 at block 713,664, becoming the second cryptocurrency to deploy Lightning Network after SysCoin.
