Beam-BinanceNigeria “Ask Me Anything” Session with Beam’s CEO, Alexander Zaidelson.

The AMA is the interaction between Beam’s CEO, Alexander Zaidelson, and the Binance Nigeria community, moderated by Cyril Oghenegueke. The AMA took place on the 1st of December. The first segment of the AMA was a Q & A between the Alexander Zaidelson and Cyril, while the questions from the second segment came from the Binance Nigeria community, this segment was moderated by Cyril.

We had a total of 198 questions from the audience (incredible right?), unfortunately, because of the time factor, Zaidelson could only answer 13 questions.

Beam’s CTO, Alex Romanov was unavoidably absent for the AMA session, so the CEO, had to represent, and he did a brilliant job at that.

First Segment Q & A (with Cyril Oghenegueke)

Introduction

Cyril (Interviewer): Q/Can you tell us a bit about yourself and the Beam Project?

Alexander Zaidelson: Sure. My background is in software engineering, entrepreneurship and venture capital investment. I started my career as a software developer back in the nineties. In 2005, I co-founded Nareos — a startup in the area of P2P file-sharing networking (a technology somewhat similar to cryptocurrency — it is also decentralized and censorship-resistant). I was doing mostly business and product roles. After that, I ran the Product team at a big data startup called WeFi for several years.

I was also involved as an advisor or consultant in several startups as well. After WeFi, I spent two years in a VC fund here in Israel. I joined Beam in June 2018.

Cyril: Q/An enviable and colourful ICT background, I must admit!

Alexander Zaidelson: Thanks, I was really lucky. About Beam project — Beam is a scalable confidential cryptocurrency based on Mimblewimble protocol. Beam is a cryptocurrency that is confidential, lightweight and very easy to use. Beam was started in early 2018 and launched the Mainnet on Jan 3 2019.

Beam is Proof-of-Work, decentralized, permissionless currency with deflationary emission schedule. The funding model of the project is based on a Treasury. That means that over the first 5 years, 20% of all the mined coins go to the Treasury, and from there distributed to investors, the team and the Beam Foundation. As I like to say sometimes, Beam is what Bitcoin should have been.

Cyril: Q/What triggered your interest to pursue the development of a privacy coin?

Alexander Zaidelson: OK, that’s an interesting question. The cryptocurrency and technology are really fascinating. When I learned about crypto I understood that the potential is really huge — replacing gold and then money means that the crypto industry has immense growth potential. Think of it, Gold market cap is about 8 Trillion dollars, the total money supply is estimated at 90 Trillion. And all of crypto market cap is about $200 billion. Thus, I was interested in crypto in general.

Then I learned that there is actually no privacy on most existing blockchains — whatever you do is immediately exposed to everyone. In my view, this absence of privacy really hinders the prospects of cryptocurrencies to be widely used and realize the dream of replacing money. So, a good privacy solution is needed in the Crypto space — and Beam was born to provide exactly this — a confidential cryptocurrency that can be used by everyone.

Cyril: Q/Thank you, Alex, Beam is designed to strengthen the human right to privacy

Alexander Zaidelson: Absolutely. Privacy is indeed a basic human right, but it is being taken away from us everywhere — Facebook and Google know everything about us, our governments know too much about us. In Bitcoin, while we get a lot of freedom, we do not really own our information — it is available to everyone with some tech knowledge. So yes, Beam returns privacy to the people.

Cyril: Q/How is Beam different from other privacy coins?

Alexander Zaidelson: Beam is the next generation of privacy coins. Beam is based on Mimblewimble — a next-generation privacy protocol that combines privacy with small blockchain. While other privacy coins already existed before Mimblewimble, they suffered from several issues. Basically, all the older privacy coin projects were built on the same architecture as Bitcoin and used different smart techniques to hide the transaction information.

In order to obfuscate the data, their technology added more information to the blockchain, resulting in blockchain bloating. For example, Monero blockchain is 5 times larger than Bitcoin per transaction, and Zcash is 9 times larger. It is a big disadvantage — the blockchain becomes very big, and it becomes hard to run a full node, hurting decentralization. Mimblewimble blockchain can be 3–10 times smaller.

As to Zcash, it uses some very complicated math that very few people in the world understand, and also requires a trusted cryptographic setup (meaning that if certain information leaks during that setup, the owner of this information can print money freely and without being detected). There were already several critical bugs in Zcash that allowed free printing of money.

Those bugs were discovered by the Zcash team, but again, there are so few people in the world who can detect those bugs that it is a bit scary. Mimblewimble (and Beam) only uses standard cryptography that is well understood by the wide engineering community. So, the main difference of Beam is its protocol — the first one to combine small blockchain and great privacy. Plus, Beam puts a lot of attention to usability — just compare our wallets with wallets developed by other privacy coin projects.

And, Beam also has a long-term vision of adding opt-in compliance, i.e. a way for users to create a transaction history and to be able to show it to regulators/auditors if they (the users) choose so Eventually, this will allow both businesses and individuals to use Beam, because individuals will prefer full privacy, while businesses will likely want to be able to report their revenue and expenses. But the key here is opt-in

Cyril: Q/How is Beam different from Grin?

Alexander Zaidelson: First, I want to say that we love and support the Grin project. We are in good contact with some of Grin devs, and our lead dev Valdok just recently spoke at grincon1 in Berlin. So, what are the differences? They are several

1. Emission — Beam is deflationary emission with halvings, a total of 262,80000 coins, Grin has endless emission of 60 coins per minute forever

2. Governance — Beam started as a company and is now transitioning to a more decentralized Foundation. Grin started as a decentralized volunteer project. The tradeoff here is between speed of development — Beam was able to do much more in a much shorter time period

3. Usability — using Beam is simple, very similar to any other coin. Using Grin is very difficult — you need to establish direct IP connections or send files to each other.

Why so complex? Because Mimblewimble protocol requires that the two wallets “talk” to each other to create a transaction. In Beam, we created a full subsystem called SBBS to allow for this talk between wallets in a seamless, secure and decentralized way. One of the results is that on Beam we have 60% more transactions per day than on Grin

4. Better privacy. Grin implemented Mimblewimble and Dandelion++. Beam improved Dandelion by adding decoy outputs. We are also working hard to add Lelantus-MW, a protocol that improves privacy even more

5. Long-term vision — our vision is to build a full-fledged ecosystem of confidential DeFi. We are starting now by rolling out an Atomic Swaps marketplace. Next in line — bridging confidential assets from other blockchains (think ETH), and then — DeFi functionality. Plus, the opt-in compliance that will eventually allow compliant businesses and exchanges to also accept Beam

Cyril: Q/ The Beam team appears to place significant emphasis on reducing complexity in the design.👌

Alexander Zaidelson: Yes. We are building products that are not just for techies, but for everyone

Cyril: Q/ A couple of weeks ago, there was a lot of FUD about “Mimblewimble is not really private”. Does this relate to Beam? Please explain

Alexander Zaidelson: Yes, that research made a lot of noise. The researcher demonstrated that in principle, in Grin it may be possible to establish a connection between the two parties if those two parties are known to the attacker.

For example, a government agent may create a donation to an anonymous (and outlawed) human rights organization, the organization may pay to an activist. If that activist then brings her funds to a KYC-d exchange or other KYCd services which the government can control, the government can detect this person and prove that she received money from that outlawed human rights organization. This is a very important use case, but a very specific one.

The attack does NOT detect transacted amounts, does not deanonymize users, does not detect their IPs, how much money they have, etc. Basically, this attack is possible because Grin network is not yet used to its full extent. In Dandelion++, transactions from different users should be merged together before being broadcast to the network, but since there is not enough usage yet, most transactions (96%) are not merged and thus an observer can connect inputs to outputs.

We have published an article explaining why the attack does not work in Beam. Remember what I wrote about better privacy in Beam? In Beam, we use Decoy outputs and Decoy Inputs to prevent such connection. In Beam, every transaction receives several decoy outputs and also several decoy inputs. These decoys are indistinguishable from real UTXOs, but have a value of zero.

So, in the previous scenario of a human rights activist, it would be very hard to prove the connection between him and the human rights organization — the decoy inputs make the transaction graph blurred. Even if my UTXO was “born” in a transaction with a known “marked” input, that input may have been a decoy, so I always have plausible deniability. Also, if someone is trying to follow a certain UTXOs, decoys will quickly “contaminate” many other transactions.

So, Decoys prevent the kind of attack described in that article last month. To provide even stronger privacy and fully break the input-output linkability, we are now integrating Lelanuts-MW — a novel protocol that creates a “shielded pool” to fully break linkability of inputs and outputs. In Lelantus, you put a coin into the pool together with other coins (tens of thousands), and then retrieve it at a later point in time. No connection/trace whatsoever is available between the input and the output coins, so linkability is broken.

Lelantus was developed by our friends in Zcoin (Aram Jivanyan is the author), and we adapted it to Mimblewimble and Beam. So, to summarize 1. The FUD does not relate to Beam and the attack will not work on Beam — Decoys make this attack impossible 2. We are constantly working to make privacy even stronger, and Lelantus-MW is a very important development

Cyril: Q/What is Beam Foundation? How will it change the governance?

Alexander Zaidelson: Beam Foundation is a non-profit run by an independent board, Its goal is to use the funds from the Treasury to continue the development of Beam in the coming years. It is not controlled but the original company or the investors. The Foundation will make governance more decentralized and will be involving the broader community. The goal is that in 3–5 years Beam governance is fully decentralized similar to Grin and Bitcoin

Second Segment: Q & A (with the audience)

Mark Pham: Q/BEAM has high privacy for users. However, if the transaction is in violation or for a malicious purpose, which is requested by government agencies to check, can BEAM intervene in that transaction?

Alexander Zaidelson: No, Beam cannot intervene in any way. We don’t have any more information than any other user on the blockchain. Beam is decentralized, so the developers don’t have any more information than others.

Shiva-Skayer_chain: Q/BEAM looks good but it confuses me that there are so many other Blockchain projects. What should I pay attention in BEAM to give it the importance it deserves? What are you planning to achieve with your project?

Alexander Zaidelson: We are planning to achieve a full confidential ecosystem for coins and DeFi applications. When you look at other blockchain projects, first check whether they solve the privacy issue. If not, it is a big problem — money that is not private cannot really be used as money. Then, you should look at how they deliver and how usable the projects are — we are working very hard and delivering stuff, not just promising things as a lot of other projects do. We are driven by engineering rather than by shilling.

Zafer Metin: Q/What is the purpose of the Beam Core Group and its support for Beam?

Why does Beam care about independent developers?

Which development plans will be implemented?

Alexander Zaidelson: Beam Core Group is the team that started the original development, and it will continue working on Beam in the future as well. However, with time, we want to bring more and more independent devs so that the development becomes more and more distributed and decentralized. Once the development is decentralized, nobody (no government or regulator) can stop it.

Angga Yohannes: Q/No project is perfect. What do you think is the biggest weakness in your project?

A project’s Technical development may not always be reflected in the price of the token. What is BEAM doing specifically to increase the price of the token?

Alexander Zaidelson: One can say that our weakness is that we spend more resources on development than on marketing. We don’t make empty promises, we don’t do massive airdrops or dinners with Warren Buffet. What we do is delivering good products. We believe that with time this approach will win. As to the token price — again, we deliver products that work and make people happy. We also work to increase awareness and spread the word (like today).

Zafer Metin: Q/Why does BEAM use Mimblewimble protocol?

Does this protocol have security vulnerabilities?

What is the purpose of ElGamal and Pedersen commitment?

Can quantum computers interfere with these protocols? Can he access his data?

Alexander Zaidelson: I explained why Mimblewimble is good earlier. Basically it is the first protocol to combine privacy and small blockchain. As to quantum computers — Beam should not be affected by them. We implemented switch commitments that allow us to easily change to stronger cryptography if needed

Sasmita Angelyn: Q/ What do you think about the future of DeFi in this space? Will DeFi one day take over traditional financial systems? In my opinion, DeFi brings a lot of benefits to users, but in fact, DeFi conflicts about benefits with the Bank. How do you solve this problem?

Alexander Zaidelson: DeFi will prevail over banks. Decentralized and permissionless should always win

Forest: Q/What are your thoughts on “Privacy coins will be the future of cryptocurrency” ?

Alexander Zaidelson: I fully agree — there is no future without privacy

The River: Q/Who is Beam’s opponent? What are the strengths that help defeat Beam’s opponents?

Alexander Zaidelson: I could name Zcash and Monero as incumbent projects. But our true opponent is slow adoption of crypto. As it grows, Beam will grow too.

Yoo — In Na: Q/What are some of the best and worst experiences you have encountered upon taking this project and make this as your step to become successful?

Alexander Zaidelson: Best — seeing people love our product and seeing it being really used. Worst — seeing some dishonest people in the industry.

Darkseid: Q/What is the reasoning for adding the Genesis Mining CEO as an advisor, and what other advisors does Beam have so far?

Alexander Zaidelson: Marco Streng has great knowledge in mining and the mining industry. He helps us in that area. You can see more advisors on our website — we have great people from various disciplines.

Austin Tyc: Q/How is beam price controlled?

Alexander Zaidelson — It is not controlled

Slim Err: Q/Can you tell us something about the adoption of BEAM? Like where you would love to see the usage of BEAM?

Alexander Zaidelson: We already have multiple online stores accept Beam, and multiple VPN services as well. We are working to build more partnerships like this.

Maranatha: Q/Doesn’t the “opt in compliance” negates the whole idea of privacy, now how can we trust the regulators/auditors to keep the information data private? Who are these regulators and auditors?

Why did beam have to do HARDFORK and what’s the advantage

Explain more about LASER BEAM — Layer 2 solution for fast payment channels on top of Beam. Would BEAM focus on payments or also engage other valuable industries?

You deal with only permissionless blockchain architectures, please what are the implications for dealing with only one? Does this hold any advantage? Also, can both permissioned and permissionless blockchain architectures be achieved

Why deflationary? What does this mean for tokenomics

Alexander Zaidelson: Opt-in compliance means that the users will share their information only if they want. Nobody can force you to share your info. But of course, if you choose to share it, you have to trust the auditor. For us, opt-in compliance is a way for Beam to be part of the existing financial system

Hard fork changes the mining algo to prevent people from building ASICs. we announced two HFs — first was in August, second will be probably in March

Laser Beam is similar to Lightning — it is payment channels for instant off-chain payments