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- Cardano and Litecoin are studying a new cooperation to establish cross-chain communications, compatibility with smart contracts and greater scalability.
- This could be made possible by a so-called “velvet fork”, but further investigation needs to be completed first.
As Crypto News Flash has already reported, Cardano founder Charles Hoskinson has already pitched the idea of discussing a closer partnership with Litecoin in July of this year. There are several possible application models, discussed in detail in a new article by Litecoin Foundation director David Schwartz.
@SatoshiLite it would be great to do something together. I love the idea of testing the cross-chain communication between Litecoin and Cardano. We have a lot of ideas and I’m sure you guys do too
– Charles Hoskinson (@IOHK_Charles) July 7, 2020
Cross-chain communication and compatibility with smart contracts
Schwartz explains that Cardano and Litecoin could unlock new features through a velvet fork and that miners’ participation in the network is entirely voluntary. This could improve cross-chain communication, smart contract compatibility and long-term scalability. It describes that the far-reaching implications for both cryptocurrencies need to be further investigated:
Given the opportunity to research and provide input on the feasibility, pros and cons of such a venture, I had a number of informational exchanges with Charles’s team on not only what a Velvet Fork is, but also how it affects the core code. and what it would potentially mean for Litecoin’s continued growth and utility not only as a store of value, but also as a medium of exchange and settlement method within smart contracts.
According to Schwartz, a velvet fork is neither a rigid fork nor a soft fork. With a velvet fork, new code is added to the base, similar to a protocol update, but majority consent is not required. All miners on the network can continue to function normally regardless of whether they have implemented the update or not. They can decide for themselves if they want to participate:
It will allow clients that upgrade to the new rules to still be compatible with those that don’t and add no changes to the rules at the consent level.
Schwartz also points out that his results are particularly promising in the NiPoPoWs (Non-Interactive Proofs of Work) research area. NiPoPoWs allow blockchains to function as an API, allowing cryptocurrencies like Litecoin within a smart contract on a blockchain to interact with smart contracts from other blockchains such as Cardano or Ethereum:
Basically the smart contract capable blockchain validates the NiPoPow used inside the Litecoin sidechain to which the velvet fork has been added to allow this action to take place.
Using NiPoPoW, so-called SPV wallets can also be used. They just need to download the block header and not the entire blockchain. Schwartz invites the Litecoin and Cardano community to further explore these ideas in order to explore and test further possibilities together.
Velvet Fork also offers the potential for other cryptocurrencies
Velvet forks can also be used by other projects and, thanks to their implementation flexibility, they offer a practical tool to implement protocol updates without having to reach majority consensus. According to Schwartz, the scope is not limited to Litecoin or Cardano, but the entire cryptocurrency ecosystem can benefit from them in the long run.
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