MWEB, or MimbleWimble, is a privacy and scalability upgrade deployed on Litecoin in May 2022, allowing users to hide information when transacting on the network. Named after the Harry Potter spell, MimbleWimble has dramatically enhanced the blockchain’s fungibility and scalability.
In this article, we will explain MWEB, how it works, and how it has enhanced the Litecoin blockchain.
What Is MWEB?
MimbleWimble is an upgrade implemented on Litecoin (LTC) in 2022 to enhance the privacy and fungibility of transactions on its network. First proposed in 2016 by developer ‘Tom Elvis Jedusor’, MWEB introduces a new method of conducting confidential transactions on Litecoin, where all information is obfuscated and only known to the sender and receiver of the funds.
Litecoin is a highly transparent blockchain where all transaction information, including the wallet addresses of the sender and recipient as well as the amount being transferred, is revealed. However, this has long been a privacy concern for the community and posed a significant issue in situations where confidentiality is required.
MWEB is not particularly a Layer-2 solution but rather an extension of the Litecoin mainnet, known as Extension Blocks. This means the protocol utilizes the existing infrastructure of the blockchain technology to process transactions, making it easier for users to transact. Extension blocks are interconnected chains adjacent to the main chain and share information. Technically, however, MimbleWimble exists within each Litecoin block.
How Does MWEB Work?
Transacting on MWEB is pretty straightforward and not different from traditional Litecoin transactions. Here is how it works:
Create an MWEB Address
The first step is to generate an MWEB address, which can be done through the Litecoin Core wallet. MimbleWimble addresses start with “ltcmweb1” and can be easily identified.
Send Transactions
Sending transactions on MWEB is not at all complicated. Users simply paste the MWEB address to which they want to send LTC, enter the amount, and hit send. Litecoin has seamlessly integrated the extension block into its mainnet, requiring no additional steps when transferring funds.
Peg In and Peg Out
Litecoin users can move their LTC to and from the MWEB protocol using the “Peg In” and “Peg Out” options. This allows users to transfer their Litecoin between the mainnet and the extension block. Details of the transaction remain hidden when funds are moved between the chains.
How To Move LTC Into And Out From MWEB?
Moving LTC into MWEB is called “peg in” and transferring the funds back into the Litecoin mainnet is called “peg out”. To send funds to MimbleWimble, a user must create a “pegging-in” transaction, or share their MWEB address, in which case the miner will create a peg-in transaction on their behalf.
Transfers made to MimbleWimble on a Litecoin block are processed by the HogEx mechanism within the same block, allowing users to send the LTC before a new extension block is created within 2.5 minutes. HogEx, short for Hogwarts Express, is a protocol that facilitates the movement of funds into and out of the MimbleWimble extension block.
To transfer funds from MWEB, users create a “pegging-out” transaction by sending LTC to a non-privacy-preserving Litecoin address, executed by HogEx. These coins are only moved to the mainnet after six block confirmations – or once six blocks are processed on top of the block their transaction is within.
HogEx is also responsible for balancing the funds available within the MWEB extension block. It updates the balance by adding new peg-in transactions and deducting amounts from the peg-out transactions, keeping track of the total funds within that particular Litecoin block.
Whilst Litecoin transactions made to and from MimbleWimble cannot be traced, it is possible to see when the feature is used. Some solutions provide insights into whether a particular transaction or wallet contains LTC that has been utilized by the extension block.
How Does MWEB Achieve Privacy And Security On Litecoin?
MimbleWimble employs several technologies to ensure privacy and transaction security on Litecoin:
- Confidential Transactions: MWEB keeps the LTC amount being transferred hidden from all network participants except the sender and receiver. It guarantees confidentially while ensuring that the total amount spent does not exceed the number of coins available in the sender’s wallet.
- CoinJoin: CoinJoin acts as a token mixer to conceal Litecoin transactions. It combines multiple transactions from different parties into one, obscuring the source of the funds and making it difficult to trace the origin of the specific transaction.
- Stealth Addresses: These are single-use Litecoin addresses created for each transaction on the MWEB extension block. Stealth addresses conceal the recipient of a transaction and it cannot be seen on the blockchain without the corresponding viewing key, further enhancing privacy.
MWEB has helped transform Litecoin (LTC) into one of the most fungible and cash-like cryptocurrencies in the market. The upgrade also warrants the “digital silver’s” position as a leader in the areas of privacy, fungibility, and scalability.
