Blockchain, Privacy and Beam for Dummies

Blockchain technology has been around for over a decade now, and it has gotten a lot of hype, criticism and general attention from the media. Regardless of the criticisms, the number of Blockchain wallets have grown since the creation of the first digital currency on the blockchain in 2009 (Bitcoin). Today, that number reaches over 44 million Blockchain wallet users at the end of December 2019.

However, there are still a lot of people who are yet to grasp the real understanding of what blockchains represent today. Recent surveys have shown that while some people have a very vague idea of what cryptocurrencies (most notably Bitcoin) are, some others have simply not heard about it before.

For clarity, this article has been written with the larger percentage in mind; The people who do not know what Blockchains are, but are willing to do so.

In this article, we will be exploring what Blockchains are and what Bitcoin is.

Originally, blockchains are simply decentralized databases that maintain a growing list of public records. This records could include transactions and data from the users. The network stores these data as groups called blocks.

Blockchains do not exist in a single place. Its exact copies exist in different other places too, and they are periodically synchronized to ensure that each copy contains the same information every time.

Blockchain derived its name from how it works. It is an arrangement of information or data in blocks, linked together by cryptographic proofs (hashes) we could easily visualize as chains. These hashes are alpha-numeric characters that link two blocks together and that allows for the secure and efficient transfer of data from a person to another or person without being tampered with.

Elements of a blockchain include a new block (which contains the hash of the previous block), the data contained in the block in form of transactions, and timestamp as proof of when the transaction was made. Hence, by design, a Blockchain is resistant to modification of the data it contains.

Bitcoin is the first and most recognized cryptocurrency on a blockchain. Cryptocurrencies are essentially a type of digital currency that uses Blockchain technology. Bitcoins represent the value of the network and all the data on the blockchain. They are used as a store of value and transferred from one person to another as a medium of exchange.

Because bitcoins use blockchain technology, the records of every transaction are displayed and made public, and a new unit of currency is generated when the computers in that network compete to find the solution to a cryptographic mathematical problem.

The bitcoin blockchain, like most blockchains that exists today, requires the internet to be able to function.

For more information about how Blockchains and Bitcoin work, check out this article by Blockgeeks.

Moving on, we’d discuss privacy and its essence in the digital world

Does Privacy Really Matter, and WHY?

Not everyone understands privacy, or why it is important to digital transactions like cryptocurrencies. However, privacy is an essential human right upon which several other rights have been established.

On the internet today, every website, business and social media users have their privacy policy. These policies exist to protect you by allowing you to choose what you want people to see and what you do not what them to see. not,

If blockchain technology is going to be mainstream in the future, there should at least exist some form/option for privacy for the people who need them.

The lack of privacy in digital transactions exposes one up to a lot of scrutinies and possibly social criticism simply because your transactions are available for everyone to see. While it could be great for making systems more transparent, Imagine how unuseful such a digital currency would be to centralized businesses and institutions that work in real-life.

It’s a little bit like owning a decent mansion built without restrictions such as a proper gate, doors and window blinds. Then, there is no filter on the type and amount of people that are allowed into the house. Hence, the house is susceptible to some things such as external attacks, intrusion, and loss or damages to valuable items. More so, the inhabitant of the house will not be comfortable staying in such a place. Because there is little or no privacy.

If however, there are some forms of restriction at the entrances of the house, then valuables in the house are protected and the inhabitant gets to maintain their privacy.

As can be observed from the example above, one’s privacy and sovereignty is important, especially since Blockchain technology is focused on eliminating the need for a third party or middleman.

This is where Beam steps in.

What Is Beam?

Beam is a confidential and scalable cryptocurrency based on Mimblewimble protocol. It is a privacy cryptocurrency that allows people to make completely confidential peer-to-peer transactions without needing a bank.

As a privacy Cryptocurrency, Beam ensures that your transactions on their blockchain are not visible to anyone apart from you and the person you’re sending Beams to. This makes it ideal as a means of sending and receiving money anonymously because unlike Bitcoin, businesses and agencies can use it as a decentralized digital currency without the fear of being monitored by unwanted 3rd parties or competitors. People can pay for and support whatever they want to support without facing any social criticism.

Beam is scalable and fast. It can process hundreds of transactions at the same time, and each transaction takes just 59 seconds to complete, unlike Bitcoin’s 10 minutes.

Beam is like installing a window blind that you can choose to open to let certain people see through

Another interesting thing about Beam is a feature called Auditablity, which gives the option for its users to present their transaction history to an appropriate agency whenever they want to. Thinking in terms of the example I gave with the house earlier, it’s like installing a window blind that you can choose to open to let certain people see through the glass into the house, whenever you want to. Auditability is an ideal use case for companies and businesses who might want to show their financial records during audits.

The Beam protocol is coded in C++. It has a fixed issuance schedule that is similar to Bitcoin’s, except faster, more scalable and with cheaper fees.

How does Beam work?

Unlike the Bitcoin blockchain where only the sender has to sign a transaction. both the sender and the receiver participate in the transaction, Beam requires that both parties sign the transaction using something known as the Schnorr protocol. Schnorr allows for multiple signatures to be comprised into one single signature. While having the size of one single signature, all the individual signatures in the single signature are authorized.

Beam continues to move forward, adapt and learn. They are passionate about their vision in building the best-in-class confidential cryptocurrency and a strong ecosystem around it, giving financial privacy back to individuals and businesses.

For more information about Beam, do check out the links below:

• Visit the website here, also check out the FAQ section here
• Join the African community on Telegram
• Follow Beam Africa, and Beam on Twitter.

Many thanks to Wisdom Groot. for editing and improving this article.