Usually dismissed as less innovative than the more widely used bitcoin blockchain, the activation of a code upgrade called Segregated Witness (SegWit) is inspiring developers to give the smaller litecoin network a second look.

The fourth-largest public blockchain by total investment, litecoin is expected to formally add SegWit this week – a move that could pave the way for projects that are all but impossible to implement on bitcoin today. And, with the chances that SegWit will activate on bitcoin appearing less likely, the decision has put a new spotlight on litecoin, launched in 2011 as one of the first 'altcoins' seeking to optimize the bitcoin code base.

Now, projects that were seeking to build on top of SegWit on bitcoin are beginning to talk openly about using litecoin as a testbed that would hopefully prove their ideas on a live, public blockchain.

So far, the Lightning Network is the most concrete example of how some teams are adapting to the new possibility. Last week, one Lightning project released a version of its software designed to be compatible with litecoin.

But other projects that are dependent on SegWit look to be eyeing the bitcoin alternative as well.

Nicolas Dorier, bitcoin developer and CTO for distributed ledger startup Metaco, summed up the current mood by explaining that developers are simply becoming eager to continue their work in any way possible.

Dorier told CoinDesk:

Still, the transition won't be as easy as it might sound, as there is work needed to ensure both the litecoin code base and projects that seek to use it can make the switch.

For example, Johnson Lau, one of the lead developers behind MAST (which seeks to enable more complex smart contracts on bitcoin), now plans to implement the project on top of litecoin. So far, this has seen Lau taking a more active day-to-day role with litecoin's code, writing up a guide to help miners to prepare for SegWit activation.

Dorier, who also leads development of NBitcoin, a .NET library for programmers, mentioned that he has spent some time adding support for SegWit into the software.

After growing "frustrated" with the fact that SegWit wasn't activating on bitcoin, he made the library compatible with litecoin – a process that took him only a few hours, he said.

Dorier's other well-known project is NTumbleBit, an implementation of the theoretical decentralized coin mixer TumbleBit that works as a top-layer network similar to Lightning. (Dorier hopes eventually to add functionality that will allow users to exchange bitcoin for litecoin trustlessly and with more privacy via the service.)

"That’s my goal," he said.

The buzz over SegWit is also helping jumpstart previously announced litecoin R&D efforts.

For instance, another much-talked-about project that could see use on litecoin is 'confidential transactions', designed to shield sensitive data on public blockchains.

Litecoin developers have been working on implementing the idea since at least September, when Litecoin Core developer Xinxi Wang issued a development update in which he argued that SegWit would make it easier to deploy the privacy-focused technology.

Yet, when contacted by CoinDesk, Litecoin Foundation director Franklyn Richards said that the team isn't ready to talk about the project yet.

One potential problem is that confidential transactions take up about almost 20 times more space on the blockchain than normal transactions. Considering that blockchain networks have limited capacity today (prompting much caustic debate in the bitcoin space), this factor could perhaps represent a problem for litecoin further down the road.

Further, Blockstream CTO Greg Maxwell, who's been working on confidential transactions, argued in a recent talk that it would be "premature" to add the technology to litecoin today.

Other developers, however, spoke to their desire to use litecoin, if only for short-term ideation.

Sergio Demián Lerner, a developer at bitcoin smart contract startup RSK, said the team is unlikely to change its plans depending on "which blockchain activates SegWit first".

He emphasized:

However, since the firm plans to open source the tech, it's possible that others will take up the reigns and build their own version on top of litecoin.

"We will help any serious group that works to foster RSK technology," he added.

Still, it's worth noting that there's an element of politicization in the works.

Despite the fact that litecoin has passed SegWit, as RSK's comments show, there's still a preference among developers toward the bitcoin network, which is seen as a more serious and more valuable long-term project. Further, the kinds of technical projects that are considering migrating efforts to litecoin are generally experimental and very early stage.

The combination of both factors has raised some concerns in the community.

While litecoin may enable a wave of youthful projects to test their ideas, some have expressed fears that in doing so they will 'pump' the value of litecoin's token by way of making grand technical promises that win attention from investors.

Already, litecoin's price has swelled to three-year highs on the SegWit news.

And Dorier, for one, has been mulling over longer-term problems, telling CoinDesk:

He pointed to the current favored way of making upgrades to bitcoin consensus rules, echoing the opinion that it unintentionally gives miners too much power to veto development upgrades.

The concern is, if this issue is never rectified on bitcoin, future litecoin upgrades along the lines of SegWit might have trouble getting support as its network and value grows.

With so much still uncertain, the takeaway might be that it’s still too early to know how (or whether) litecoin will play a role in bringing these projects to life as a get-around to bitcoin's long-standing scaling quagmire.

Still, Blockstream's Maxwell expressed general optimism about litecoin's upcoming SegWit activation, saying at a recent meetup:

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