Cardano and Litecoin exploring cross-chain communication

  • Cardano and Litecoin are investigating a new cooperation to establish cross-chain communication, smart contracts compatibility and increased scalability.
  • This could be made possible by a so-called ‘velvet fork’, but further investigations must first be completed.

As Crypto News Flash has already reported, Cardano’s founder, Charles Hoskinson, already launched the idea of discussing a closer partnership with Litecoin in July this year. There are several possible application models, which are discussed in detail in a new article by Litecoin Foundation Director David Schwartz.

Cross-chain communication and smart contracts compatibility

Schwartz explains that Cardano and Litecoin could unlock new features through a velvet fork and that the participation of the miners in the network is completely voluntary. This could improve cross-chain communication, smart contract compatibility and scalability in the long term. He describes that the far-reaching implications for both cryptocurrencies need to be further investigated:

Given the opportunity to research and provide input into the feasibility, pros, and cons of such an endeavor, I have had a number of informative exchanges with Charles’ team on not just what a Velvet Fork is, but also how it affects the base code and what it would mean potentially for the continued growth and utility of Litecoin as not just a store of value, but also as a means of exchange and method of settlement within smart contracts.

According to Schwartz, a velvet fork is neither a hard fork nor a soft fork. With a velvet fork, new code is added to the base, similar to a protocol upgrade, but no majority consensus is required. All miners on the network can continue to work as normal, regardless of whether they have implemented the upgrade or not. They can decide for themselves whether they want to participate:

It will allow clients that upgrade to the new rules to still be compatible with those that do not, and adds no rule modifications to the consensus layer.

Schwartz further outlines that his results are particularly promising in the research area of NiPoPoWs (Non-Interactive Proofs of Work). NiPoPoWs allow blockchains to work like an API, allowing cryptocurrencies such as Litecoin within a smart contract on a blockchain to interact with smart contracts of other blockchains such as Cardano or Ethereum:

Basically the smart contract capable blockchain validates the NiPoPow used within the Litecoin sidechain that has had the velvet fork added to allow for this action to take place.

By using NiPoPoWs, so-called SPV wallets can also be used. They only need to download the block header and not the whole blockchain. Schwartz calls upon the Litecoin community as well as Cardano to further explore these ideas in order to explore and test further possibilities together.

Velvet Fork also offers potential for other cryptocurrencies

Velvet forks can also be used by other projects and, due to their flexible deployment, offer a practical tool for implementing protocol upgrades without having to achieve a majority consensus. According to Schwartz, the scope of application is not limited to Litecoin or Cardano, but the entire ecosystem of cryptocurrencies can benefit in the long run.

About Author

Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.

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