Litecoin Mimblewimble Extension Block Upgrade

Owned by Egya (Unlicensed)
May 17, 2022
4 min read

Litecoin’s MimbleWimble Extension Block (MWEB) upgrade was released on January 31, 2022, as a release candidate to be included in the Core v0.21.2 release upgrade.  The upgrade is scheduled to be activated on Litecoin’s Mainnet starting at block 2,265,984 (expected May 19, 2022).

 

Final Litecoin Core v0.21.2 release –

https://github.com/litecoin-project/litecoin/releases/tag/v0.21.2

This release includes new features, various bug fixes and performance improvements, as well as updated translations. The update includes full node, wallet and mining support for MWEB.

 

MimbleWimble Extension Block (MWEB)

 The MimbleWimble extension block is intended to run as a parallel blockchain to Litecoin’s primary chain (mainnet). It is activated as an opt-in feature that enables users transact on either of these blockchains. The MWEB chain is intended to provide better fungibility and privacy than Litecoin’s fundamental chain by allowing for transactions to be selectively disclosed by proving knowledge of the blinding factor with valuable security enhancements within the network’s MW chain. MW chain features include -

  • Fungibility –refers to the ability of a currency to be exchanged for another unit without losing its value. Due to the lack of address registration on the MW blockchain, the origin of the coins will not be known as a result they cannot be negatively labelled.

  • Data Compression – MimbleWimble also allows for data compression, reducing the overall blockchain size.

  • Scalability – Due to the little space that transactions require within the blocks of the MW blockchain, the protocol architecture is much more scalable.

  • Partial Privacy – MWEB removes some of the Bitcoin scripts and obfuscates some of the transaction details enabling more privacy for users. By not mandating to register the public addresses of the issuer or receiver on MW blockchain, it is unlikely to trace the origin and destination of operations and funds.

Evaluation Process

MidChains evaluates:

  • What is changing?

  • Analyse the impact of those changes.

 

What is Changing?

 

  • Consensus changes - Implementation of the MWEB consensus rules (LIP002, LIP003, and LIP004)

 LIP002 - introduces extension blocks (EB) to implement new protocols to Litecoin without altering any consensus rules. Extension blocks are created through peg-in transactions and an integrating transaction, a term coined by Johnson Lau in his original proposal. Litecoin can also be moved out from the EB to the canonical chain through peg-out transactions. Extension blocks run alongside the main chain’s canonical blocks at the same interval of 2.5 minutes on average. EB can be soft forked in via version bits. Old clients will only see the coins anchored in the integrating transaction but will not be aware of the EB side.

 LIP003 - introduces opt-in MimbleWimble (MW) as a new transaction format through extension blocks (EB). Inside the EB is where MW transactions occur. Users can opt-in to using MW by moving their coins in and out of the EB through an integrating transaction. To transition coins from the canonical side into the EB, it must be pegged in. Coins on the canonical side are sent to a specially marked anyone-can-spend address. This results in the redemption of the equivalent amount of MW coins inside the EB. Once inside, MW transactions can occur. Coins in the EB can also be pegged out back to the canonical blockchain and will be sent out of this special address. This special address will hold all the coins that represents coins on the extension chain. MW with EB can be soft forked in via version bits. Old clients will only see the coins ending up in the anyone-can-spend address and they will not be aware of the EB side. MimbleWimble will have a switch commitment to Elgamal which can be activated via miner signalling once quantum computers are deemed to be a viable threat.

 

  • P2P and network changes - A new service flag, NODE_MWEB (1 << 24), was added to signal to peers that the node supports MWEB. When connected peers both advertise this capability, they are expected to provide all MWEB data when sharing transactions, blocks, and compact blocks with each other. Nodes now announce compact block version 3 support, informing peers that they can provide MWEB data in compact blocks.

 

  • Updated RPCs

  1.  getblockheader now returns an additional mweb_header field containing all of the MWEB header data, and an mweb_amount field containing the totalnumber of coins pegged-in to the MWEB after applying the block.

  2.  getblock now returns an additional mweb field containing MWEB header info, and all of the inputs, outputs, and kernels in the MWEB block.

  3.  Added mwebweight, descendantmwebweight, ancestormwebweight, and mweb fields to getrawmempool, getmempoolancestors, getmempooldescendants, and getmempoolentry.

  4.   Added new fields to describe MWEB transaction inputs, outputs, and kernels for getrawtransaction.

 

  • New settings – An added "fMWEBFeatures" option for enabling the new "Advanced MWEB Features" control.

 

  • Wallet Database

  1. Added "mweb_coin" type which stores MWEB coins and their derived keys.

  2.  Added CHDChain version 4 which includes an MWEB key index counter and
    the stealth address scan key.

  3.  Added CKeyMetadata version 14 which includes the MWEB key index.

  4.  Added FEATURE_MWEB = 210000 minimum database version.

 

  • Wallet RPC changes – an added 'listwallettransactions' which matches the transaction list display values.

 

  • GUI changes – an added "Advanced MWEB Features" control for testing. It is only available
    when the "-debug" argument is supplied, and the option is turned on in the settings dialog.

 

Impact Analysis

MidChains will not support the MWEB upgrade as this implies limited coverage for transaction monitoring and traceability.

Impact on Client Funds: No impact on client funds post chain upgrade as MWEB is activated as an opt-in feature in Litecoin Core v0.21.2 . Litecoin deposits, withdraws and trading is not affected.

Regulatory implications: Full coverage of transactions may be lost for MW - MW transactions on the EB chain.

Maturity / Market Capitalization: LTC remains the same asset.

Security and Operations: Changes related to custody operations may be required.

Traceability / Monitoring: Transaction coverage will be partial especially for MW transactions. Nefarious transaction history may not be captured.  

Exchange Connectivity and Demand: Deposits and Withdrawals will not be affected.

Type of Distributed Ledger Technology (DLT): Remains the same for LTC

Innovation and Efficiency: Enhanced fungibility, scalability, data compression and partial transaction privacy.