Hi all...
A trend that is being marked in the world is the regularization of governments towards cryptocurrencies, but to impose high taxes on them. For example, in India, cryptocurrencies are legal, but with the only condition that a 30% tax is charged.
Really? 30%!!
That is an extremely ridiculous amount, not even billionaires pay that amount for their wealth, and just for owning 1 BTC in India or other cryptocurrencies do you have to pay more taxes than a company that generates billions of dollars a year? That doesn't make any sense to me, I think it's a way of repression so that people stay away from cryptocurrencies and don't see it as profitable.
But for this great problem that is presented, there is already a solution, and they are private currencies such as Monero or Zcash, currencies that hide important information from users, such as the addresses of the buyer/seller and the amount purchased or sold. Many governments think that these coins openly encourage illegal activities and that is why they have strongly entrenched their prohibition because if they do not track money, a terrorist coup against Biden or Queen Elizabeth could be financed and nobody would ever know who paid for it.
But in addition to Monero or Zcash, other protocols perform the same function but with a small difference that they can be applied to different currencies if the miners vote in favor. It is the Mimblewimble protocol, a revolutionary way to make the cryptocurrencies we have private, such as LITECOIN.
The name of this protocol comes from a Harry Potter spell that ties the tongue of the target to prevent them from exposing information on a certain subject, this protocol was designed and presented by an anonymous developer who went by the name of Tom Elvis Jedusor.
Tom designed Mimblewimble so that crypto information remains completely anonymous. The Mimblewimble Protocol has 3 features:
It is anonymous: Unlike most other blockchain systems that are primarily pseudonymous, they work with traceable public addresses that determine the sender and receiver of any transaction. With Mimblewimble the transaction history cannot be tracked.
Fungibility: Mimblewimble's hard-to-trace assets make it more fungible compared to other blockchains, users can trade any cryptocurrency on the platform without the risk of cryptocurrency loss or contamination.
Scalability: In blockchain systems, nodes add transaction information to the distributed ledger to increase the block size. But large block sizes cause scalability issues as they limit the ability of the blockchain network to handle large amounts of transaction data in a short period. Mimblewimble achieves superior scalability thanks to the compact size of the blockchain.
The arrival of the Mimblewimble protocol to Litecoin can pave the way for more coins to be private, due to so many prohibitions and regulations by governments, it is easier for those users who want to completely avoid financial control and go unnoticed.
Of course, this protocol still has to go through the approval made up of 8,064 blocks, and only miners who update to the Litecoin Core 0.21.2 version will be able to vote, which means that we still have to wait to see this protocol implemented in Litecoin.
Now, could this Mimblewimble protocol be brought to bitcoin? Well, it is possible, since both the source code of bitcoin and Litecoin are the same, but the detail is whether its developers and community want it, also if the governments allow it, since it would mean that the main currency of the market can be anonymous, so they would push hard for this not to happen.
But what do you think, do you think that Mimblewimble is something necessary in the crypto space? Let me know your opinion in the comments, thank you very much for reading.