Beam “Ask-Me-Anything” Event with Alex Romanov, Beam’s CTO

The AMA is transcribed from the live event in Discord on the 17th of April. The questions were requested and put forth by the Beam community prior to the event. You are able to listen to the audio recording here. The questions were answered by Beam’s CTO Alex Romanov.

“I would like to thank everyone here personally. We appreciate it very much, and the team is very thankful for the community for the support and help that we are getting” — Alex Romanov

Beam as a Company

Q/Why is Beam called Beam? Is there a story behind it?

Of course, there is a story, an interesting one. The name Beam was actually invented by Guy Corem, at the beginning of 2018, long before we even starting working on the project. I think most of you know that Guy is not only the originator but also the soul behind the project initially the name Beam came from a kind of wordplay on Grin. Because Grin is a kind of smile and Beam is this wider, happier smile.

So this was the original idea. But very quickly it got a lot of additional connotations, most of them as you would imagine, relating to light. So for example, our implementation of the lightning network we call the Laser Beam. And it also influenced our logo. Most people see the logo and think of it as some kind of a prism, where the white light goes in and breaks out into different colors.

I actually see it exactly the opposite way, all these different beams going in and coming out as one single white beam, a little bit similar to the transactions in Mimblewimble, which are merged inside the blocks and they become inseparable. And of course for those of us who are a little bit older, it reminds us of the great album by Pink Floyd, called ‘The Dark Side of the Moon’, and due to the dark side, so it is more private, so a privacy angle as well.

Q/Is there any plan for rebranding Beam, to a different name, in the future?

Not at the moment. I really like this name, and I would like it to remain the same. Even though sometimes it causes a little bit of confusion. For example, when we launched our Android wallet a couple of days ago, there was another wallet also called Beam in the Google Play store. So sometimes it’s confusing, but I really like this name. I think it does it so far.

I wouldn’t change it for the world.

Q/Beam has some great tech and more on the way. But the days are passé in crypto when you could take an ‘If you build it they will come’ approach. Does Beam have interested partners and businesses that are actively looking at integrating the tech? If so, what can you tell us about them? If not, what’s the plan there?

Absolutely. First of all, you really have to build it. This is the basis for everything and if you look at our roadmap for 2019, you can clearly see that our intention is to make Beam the best cryptocurrency out there. We think that the features that we are adding, such as atomic swap, one-sided payments, and all the usability features, including different wallets. This is the basis for the whole thing. If we manage to Beam as usable and as practical as we really want it to be, I think it will be a great start.

Of course, it doesn’t stop there, so we are constantly talking to different payment service providers, and maybe some of you saw in the community in Telegram recently the photos of the ATM machines that are integrating Beam right now.

We are definitely not stopping at building the tech, we are also working very hard at making it practical in the real world. There is a lot of work in that case in many different directions. In the following questions, I will elaborate on the long term plans that we have for beam and the additional features we want to build on top of Beam. We are definitely putting a lot of effort into attracting partners and making Beam usable in the real world.

Q/ Can you please describe the process an international company would go through to use Beam as a means of transferring money internationally. How simple and seamless will this process be (ie. would they have to purchase/sell Beam on an exchange on each end)? What security measures will be in place from a user perspective (2FA, multi-signature)? From a process perspective, how will financial regulations and audit requirements be met? While some of these points are touched on in the roadmap, the purpose of this question is have a concise description that could be presented to a company to try to get them interested in learning more about Beam and how it could improve their processes (cost of transfers, amount of time for transfers, security of transfers).

It’s a little bit early to discuss specific ways of using Beam features for enterprise companies because we are during the process of developing, but I would like to address a few issues from this question on a more broad basis. One of them has to do with compliance. Compliance is basically one of the more complex and interesting concepts that we are attaching to Beam. I would like to talk a little bit about what this means and how it can be used, and I think it’s very important for companies to understand where we’re going with this.

If you’re a business that wants to receive Beam as a way of payment, just like with any other currency you have to do certain things, for example, be able to attach documentation such as receipts or contracts with the transaction. You should be able to show your income and expenses to the authorities, to pay your taxes, and be audited, and all the regular things that businesses do all the time. This is actually the easy part. We call this vertical compliance. It’s basically the ability to be accountable for the things you are actually doing and how exactly you’re conducting your business, and we are working on that.

However, there is another axis here which we call horizontal compliance, and it’s a little bit more interesting. I will give an example of how this works today in Bitcoin. Since all the transactions and amounts are visible and the addresses are traceable, it’s actually worth using companies like Chainalysis which do network analyses on the transaction graph. They can tell whether a specific transaction has touched or come through a wallet that is suspected of illegal activities, and they can attach a risk score to this transaction so each organization can decide if it wants to receive or accept these Bitcoins depending on this.

So banks and exchanges may reject Bitcoin on this basis. The fact that they are actually able to trace a transaction to its source, when this specific coin was born, and to see how it got to where it is now is the basis of this horizontal compliance. In confidential cryptocurrencies this is of course not possible because the blockchain is not transparent, you cannot see anything there.

However, this idea of being able to trace is the standard for compliance in the world of cryptocurrencies. What we have to do is supply the solution that will not affect the confidentiality of the network in general, because one thing that compliance is not, it does not mean that anyone can see your personal data, your transactions, and it does not in any way affect the confidentiality of the network.

But you still should be able to show the source of funds, how you got this money and how it passed through the system because this is how it works in the old school world of banks, and how the banks are being regulated. There are many ways of doing that, and the challenge here for us is to understand exactly how to implement it from finality so businesses can conduct legal activities regulated by the local authorities in a way that is compliant to the local regulations, using Beam. This is exactly the challenge we are facing right now, and working on.

Q/Do you have a strategy regarding countries with regulations that oppose privacy coins?

Yes, we are staying on top of all the current trends in the regulations, and it’s completely changing, there are very few countries today that have closed and decided regulations for cryptocurrencies in general, and for confidential cryptocurrencies in particular. But we are doing a lot of research and consulting a lot, and trying to understand all the requirements of what it means to be a regulated cryptocurrency. So it’s definitely a part of our big effort to figure out how this should really work, to find this way of combining the confidentiality which is in our opinion is an essential property of a cryptocurrency with the ability to regulate it.

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

I won’t answer about Marco Streng specifically, but I would like to talk about our advisors in general and how we operate. As you can imagine, we have always needed a lot of advice and help from people who are really experienced in the industry and who can really help us with different aspects. It’s a varied world of cryptocurrencies, starting from mining, and integration, and trading, and exchanges, and all the other aspects.

So what we have done, is trying to attract the best people we think can help us navigate this complex landscape of the industry. So each and every one of our advisors is a very knowledgeable, and experienced person in their field. Each and everyone helped us to get where we are today, and learn about the business, and make the right decisions at the right point of time. This is why they have been chosen, and they helped us a lot, and we are very thankful for them and appreciate what they have done for us.

Q/One of the competitive advantages of Beam is the Dev team who assures speedy developments of different functionalities on beam Wallet. I’d like to know more about your team. Were there any significant challenges that your team encountered in the past?

Our team is really amazing, and I’m saying that because I really enjoy working with them, and the interesting fact here is not even one of the current team (I’m talking not just R&D but the entire company, were hired from outside through a recruiter.

Everybody is a friend and was brought onto the team by a friend, many of these people I have known for years, some are close personal friends of mine, I’ve worked together with many of them on previous projects. It’s a very friendly group of people who have known each other for a long time, and this helps a lot. As you can imagine, day to day we have a lot of challenges and a lot of difficult problems to solve.

Outside of the great technical challenge, and the ability the team brings, I think the human factors here were one of the most important factors in our ability to produce and deliver Beam in such a short period of time. It was about nine (months), from March 2018 to our launch on January the third, 2019.

The only way this could have worked is by great cooperation, and we actually feel it every day, this friendship, and ability to communicate in a very constructive and productive manner. I think it was amazing so far. I’m very proud off the team. They are a group of very diverse people from many different countries. It’s a very international company, so it’s really been an amazing experience working with these people.

Regarding the challenges, we have had quite a few. One of the biggest challenges was working as an open source project because none off the team had experience with open source projects before. I think it shows, anyone that knows about this sees that we are a little bit struggling with this whole open source idea, because it’s not just going to GitHub and make this repository public, it’s much more than that. Being able to communicate, and to document properly and attract developers, we did a lot of work on that and we still have room to improve.

Also, the team was very new to the world of blockchain development and we had to learn everything and pick up things as we go. This was yet another challenge. Of course, it’s not exactly a challenge, but something special that almost everyone in the R&D team experienced, is that it was the first time that we have delivered a project that was actually used by people and attracts a community and gets all the attention and all this crazy interest all of a sudden, and we launch and . suddenly there are a lot of miners and traders and exchanges list us, and pools.

The action and attention that this project got, caught everyone by surprise, and I think people are still amazed by how it went. That was an interesting experience as well.

Mining

Q/Beam will be conducting two hard forks this year to stay ASIC resistant. However, after the final hard fork, it is probable that ASIC manufacturer will roll out their models in the market. Does the development team have any plans of imposing protocol upgrades to protect GPU miners from ASIC miners?

From the very beginning, we always said that Beam as a company does not have a strict anti-ASIC policy, but we did want to give GPUs a head-start, which is why we have announced two planned forks. One is coming up in June, and the other is probably in December, in order to stay ASIC resistant for about a year and a half, if we are counting from the launch of the project in January.

But after that, I don’t think we will have any problem with ASICs, of course, it will depend on the profitability of this operation, and other factors, but in general we do not have long term anti ASIC policy, at the moment.

Q/When will ASIC miners be launched to mine Beam?

Once again, if we are successful, and if it is actually commercially viable to produce ASICs for Beam, I believe it will happen. Probably some time towards the end of next year, if this happens at all. Our algorithm, Equihash, is relatively difficult to efficiently implement in ASICs today, but the technology will move forward, and I believe if Beam is successful enough there will be ASICs.

Q/To secure the network, I know that Beam uses a modified version of Equihash (150,5) PoW mining algorithm. Could you explain what exactly is the difference between the modified and original version? How would this modification benefit Beam miners?

The most popular Equihash implementation until we launched, was that of Zcash, and it has 144 by 5 parameters. We wanted to make sure there would be no ready ASICs at the moment we launched. So this is why we have modified the parameters to 150 by 5, and what it practically means is the requirement of the amount of memory you to need to be able to mine Beam, which is why it makes it much more suitable for GPUs.

At the moment I think the best GPU is actually mid-range AMD cards and some mid-range Nvidia cards, so you don’t even need a high-end card to effectively mine Beam. So this is the situation and this is why we chose these parameters. I think it was a very good choice. We are happy with the results. We have quite a steady amount of miners today, and it’s been great.

Compliance

Q/Will companies/customers using Beam compliance be disclosed?

Once again, the word compliance can mean several different things. The most difficult part of compliance is actually the currency part. If you just want to attach documentation to transactions, this is, of course, a very simple operation. You can just add for example a hash of the document to the transaction kernel, and you can always prove that both sides saw this document and agreed on the terms before they conducted the transaction.

This is by the way where the communicational nature of the Mimblewimble protocol, the fact that both sides participate in the creation of the transaction helps a lot, because unlike Bitcoin where you send someone a transaction without their consent, here both parties have to agree upon it. This is also a part off the compliance. So I will not conduct a transaction with you if you have not provided the specific documentation that I require or things like that.

So, of course, any company or customers that are going to use Beam compliance, they will be conducting their business, it’s not going to be a secret. On the other hand, the transaction that has any additional compliance-related information will still be indistinguishable, so that we do not affect confidentiality.

Q/Will Beam compliance be a free or paid “service” and will the compliance wallets be open sourced?

I do not see the compliance as a service, it is more support for a wide set of services. Some of these may be paid, some of them may be free, some of them may be open source, as of course the base code and protocol of Beam will be open source at all times. But you can build a lot of things above it. The compliance right now is more like a layer that supports and allows, enables, many kinds of services, but the services themselves may vary greatly.

Technology

Q/How will Team Beam address ECC post-quantum vulnerability?

Ok, so let’s talk a little about quantum computing and what it means for cryptography . in general, and Beam specifically, and how we address that. The idea is that today we depend on the fact that ECC is unbreakable in a way using the current computing resources. So it would not be feasible, to crack ECC using the computers that exist today, however, computers have this promise of being big enough one day and powerful enough to be able to crack these cryptographic structures.

So as you know, in Beam we are using the so-called Pedersen commitment. The Pedersen commitment is one of the possible implementations of a cryptographic commitment scheme. Let’s say I would like to commit to some message, so what I do, I write this message on a piece of paper and I put it in a small vault, which I lock with a combination lock and I give it to you. So now you are holding this vault. You cannot open it because you do not know the combination, on the other hand, I cannot go back on the message I wrote because you have it and I cannot take this out of the vault.

So these are actually the two essential properties of a cryptographic commitment, one is called hiding, which means you cannot see it, and the other one is binding, which means that I cannot go back on my commitment, I cannot really take it back.

The Pedersen commitment is a specific commitment scheme that is based on ECC, and it has this property of the hiding being computationally sound. No matter how many resources you have you can never open this box and see what's inside. However, it’s not binding enough. So if you have enough resources, say you have a quantum computer, you can actually change the commitment, so you can change the amount with Beam, and the commitment would still look the same, so it’s not binding enough. What this means is that if someone really has a quantum computer, they can actually break Beam and Mimblewimble in general, and probably many other cryptographic schemes. So what is actually done in order to avoid this, and this is a very interesting trick, there’s a different commitment scheme, it’s called ElGamal commitment.

It is actually the opposite Pedersen in the way that it is perfect binding, but it’s not only computationally hiding. What it has done, and it’s already deployed in Beam Mainnet today, when we create the Pedersen commitment, the blinding factor is actually a hash of an ElGamal commitment. This concept is called switch commitments.

So tomorrow, if a large enough quantum computer will be ready, what is going to happen is that we will just upgrade our network, and in addition to testing Pedersen commitments, we will also test the built-in ElGamal commitment in addition to that, and since the hash processed in the middle does not give quantum computers any advantage it will be quantum resistant.

Now you may ask why we didn’t just do it in the first place, and just use ElGamal commitments, and the reason for that is that it’s computationally more intense, and it will put more strain on the system. So we don’t need it right now, but it’s there and if the moment comes and quantum computers will be available, this is what is going to happen.

Q/When will the Atomic Swap be ready? And which coins will be available?

We have started working on atomic swaps in October last year, and we had to put it aside for some time before the launch due to an enormous amount of tasks we had to accomplish. We came back to it in February this year, and we are working on it full speed.

I believe the first version which will be just CLI wallet and will require full Bitcoin node at first to operate, I believe it will be launched in the next several weeks. Right now the successful swap is working already in Bitcoin and I believe in the next few days I will record a video demo of this process. It’s really exciting, however, it also has a lot of possible error scenarios that you have to handle within the process. I will add a diagram to the text channel.

As you can see the process of the Atomic Swap is quite complicated. It requires the creation of several transactions, one that is locking funds on the Bitcoin network and one that is locking funds on the Beam network. Then you have to create two additional transactions, one to redeem the locked UTXO in case of a successful scenario, and one to refund in case the swap didn’t go well and I need to get my money back.

As you can see from the diagram, this is a process with many different steps. It involves creating 2 by 2 multi sigs in the middle so that we have shared ownership of the UTXO. What we need to do right now, is make sure all off these error cases are handled, and then we will release the feature.

The good news is that out off the box it will support not only Bitcoin but Litecoin and probably many other Bitcoin forks because it works in a very similar way. Sometimes there are differences in the APIs that we need to handle, but the concepts are the same. So yeah, we believe it will work on Bitcoin, Litecoin, and probably some other Bitcoin clones.

Q/Ghost Dag is described as one of the new consensus mechanisms that will be researched for adoption in Beams base layer. Can you tell us a little about Ghost Dag, how it differs from the current Nakamoto consensus, and what pros and cons it will potentially present?

As you know, one of the issues is always the one with scalability in terms of transaction per second. The problem with any proof of work blockchain, the number of transactions per second in Beam today, is somewhere around 20 transactions per second. Which is nice, but of course it doesn’t really allow massive use for micropayments and things like that.

Protocols like GhostDAG and all the Dag based protocols come to resolve this problem. They resolve, using these protocols, faster confirmation, eventually higher transactions per second, and it also brings you better mining decentralisation, because there are much more blocks being created, and even though the blocks being created are smaller, everyone will take a small share because unlike blockchain which is just a sequence of blocks, the DAG (which is an acronym for directed acyclic graph) is actually having a lot of branches living simultaneously and eventually collapsing into some consensus. It allows for faster confirmations this way.

I will not go deeply into the details of the implementation of GhostDAG, but this is one of the things we are definitely looking at but in the far future. It will probably not happen any time soon. But this is one of the algorithms we are researching and looking at as a future option going forwards.

Q/I have a question I’ve not been able to get to the bottom of re: Mimblewimble Outputs are recorded to the owner on the blockchain. These records are somehow related to the user’s mnemonic phrase used to set up their wallet. But an address isn’t recorded on the blockchain. So, what is the value/function derived from the Mnemonic that is used to record the owner of UTXOs?

The way it works is basically like this, you have your seed phrase, which in our case is 12 words. It is used to generate this key that we call the base key. From this base key using a technique called pseudo-random key derivation, we can derive many other different keys. For example, when we create a UTXO it has this value, and the blinding factor, the blinding factor is actually derived from that key.

Every time, so that each UTXO has a different blinding factor. However, all the UTXOs are tagged using a concept that we call an owner key, so that you can easily recognize your UTXOs in the blockchain, but nobody else can do it except for you because you are the only one that knows your mnemonic and hence, all the keys that can be derived from it. So this is how it works. It does not need an address to recognize your UTXOs, what you need is just the know your mnemonic, and from that, you can derive all the keys and all the blinding factors that you need to get all your UTXOs from the blockchain at any time.

Q/Will Beam be adding a proof-of-existence service, and can this be in-built to the wallet? (What is proof-of-existence?)

Yeah. The concept of proof of existence is interesting and goes back, I think, till 2013 In a way, when we talk about adding documents to the transactions, for example, contracts or receipts, in a way it’s a partial implementation of the concept. So at any point in time, you can prove that this specific document was reviewed by one two or several parties, and actually existed at the time of block creation.

So it’s kind of partial, specific case, for the proof of existence service in a way. What we are going to do, is use this concept and extend it to different financial applications. So you can say we have something similar to the proof of existence service on top of Beam. Maybe not exactly for the originally intended purpose, but we use the concept for the financial world. At some point, of course, the ability to add documentation to the transaction will be inbuilt to the wallet.

Q/In Beam there are no addresses if there are no addresses why there is a blockchain explorer?

The blockchain explorer in Beam serves several different explorers. First of all, you can see that the network is alive. You can see the hashrate, and see that the blocks are actually produced, on average every minute, as intended. This is the first purpose, seeing that everything is good with the world.

The other purpose is to be able to prove that a specific transaction actually took place. For example if I send you a transaction, and you receive it, but you deny it and say “I did not receive anything”, my way today to prove this transaction happened, is to take the transaction kernel, which is unique, and find it in the explorer, and show the block in which this transaction was included. But this is not enough. Because as we know the transaction is completely opaque. You cannot actually extract information from it.

So what we’ve done, we have added another mechanism, which is called payment proof. It’s enabled by default in all the newer versions of the wallet. What it does, is every time the receiver receives a transaction and sends back a message to the sender, as part off this message it has a signature that is signed using the private key of the public SBBS address. It allows the sender to not only prove this transaction took place but that this specific receiver, received and signed it. The signature itself is not enough, but together with the kernel that appears in the blockchain, two of these are sufficient to prove beyond any reasonable doubt to anyone, in any case of dispute, that the transaction was actually received.

Q/Mimblewimble was initially Scriptless, but then Scriptless scripts have been implemented. Are there any security side effects of this?

Scriptless scripts is actually an interesting term because it is a little misleading in a way, and I’ll explain what I mean. In Bitcoin, each transaction is described in Bitcoin script, and it set out with certain conditions, what it says is “Give this money to the person who knows the private key for this publicly known address”, it’s like an ‘if’ statement, e.g. If you know this you can have that.

This is how the Transaction are represented in Bitcoin. In Ethereum, of course, you have full-blown smart contracts which are written in Solidity, which is much more complicated. In Mimblewimble, the whole genius, and the basis of the idea is that the transaction is actually presented by a series of inputs and outputs, each of which is just a Pedersen Commitment describing it.

Then we have the transactional kernel which has additional information and the access of the blinding factors. So there is no script which describes the transaction, however, you can still add some logic to the transaction, but it’s not described in a scripting language, it’s just built into the system as a building block. For example, one of the parameters that we have is maturity, so I can create a transaction which can only be sent to the network starting from a specific block. It will be rejected by the node if it sends before that.

This is the maturity parameter. On the other hand, I can create a hash and time lock like the ones we use in Atomic Swaps. So I will give you this transaction, only if you know this secret and only at this specific time. So what Scriptless Scripts basically means is that instead of using a scripting language, we are creating the same types of logic using other types of cryptographic primitives.

From one perspective it makes an extension of the protocol a little more difficult because it often requires an upgrade of the node software, but on the other hand, it is handled on the first layer. It’s a first-class citizen of the node, all this logic. once you do have enough building blocks you can build a lot of complicated scenarios such as escrow transactions, and in the future, we intend to use it a lot for confidential assets which I will talk about a little bit later.

So this is what Scriptless Scripts actually means, it does not have any security side effects, but the opposite. Since this is something that is essential and an integral part of the first layer protocol it’s actually much harder, better tested, and more robust, than just a concept written on top of something.

Q/I understand that Beam is using Confidential Transactions and the Pedersen commitment, but I can not sort out the relationship between the two concepts. Can you explain this for us?

The idea of a confidential transaction is that you basically have; who is sending, to whom they are sending and the amount. These are the three parameters that we have. Each and every one of confidential cryptocurrencies has solved the problem of hiding these parameters differently. In Mimblewimble, what has been done is, first of all, we are not recording any addresses in the blockchain, so they are just not there.

No matter how many computing resources you have, you cannot know who was the sender and who was the receiver, because this information is just not being recorded in the blockchain at all. As for the value of the transaction, we do encode it, we do encrypt it, as a Pedersen commitment that I mentioned earlier. Hence the confidential transaction is basically built out of a series of PC describing the input and output of a specific transaction. Coming back to the question, the PC is the building block of the confidential transaction in the Mimblewimble protocol.

Q/Bringing Ethereum’s assets to Beam as planned for Lumini has an advantage, but you could run complex smart contract applications like MakerDAO on the Mimblewimble chain. Is there any plan to have these types of smart contract applications on Beam?

This is a very interesting topic. I will talk about it briefly because it could go on for hours. The Lumini project is an idea of being able to be able to move assets between chains, specifically from the Ethereum chain to Beam, and then trade it confidentially on Beam. So this is the first point, and then at some point, you can move it back to the Ethereum and sell it there. So a two-way bridge between two completely different blockchains.

We have discussed several different options of implementing that, and of course, the best, the completely decentralized option would be to just completely link these two networks together, but that would require that every Beam node is aware of all Ethereum contracts. Essentially running Ethereum virtual machine and calculating all the contract by itself in order to be able to validate it, otherwise, it would not be completely decentralized, and you would have to have some kind of trust in the middle.

So this concept was rejected at first because I think it would be impractical in the near future to implement something like that. However, we have this kind of compromise that if you do have some centralized contract which you can use to lock your assets on Ethereum and then in exchange create a new type of confidential asset on top of Beam and then trade them and move them back, even though the contract is centralized, it can still work.

I can share with you two diagrams, of very high-level ideas about this. I think they are interesting to think about, of how this may work. It is very schematic, but I think it illustrates the concept we are trying to achieve.

And Yes. This is one of the things we are researching right now, because of the idea of having Ethereum assets on top of Beam and being able to trade them in a confidential manner, I think it is very interesting. There are a lot of projects today that are doing different types of bridges, and we are in touch with some of them and researching this topic very deeply. I believe this will be one of the things we will focus on in the near future, definitely.

Q/I think there are plans to move to Rust, but what is the current status and issues of Rust and what are the criteria for making the decision to shift?

As you know Rust is a very interesting and popular programming language today. Grin is implemented in Rust, and it has a lot of interesting properties. It is kind of an evolution of the C++ language, in terms of memory management and error handling, with a lot of improvements. It’s actually very cool. I do not think we will practically rewrite the entire Beam software into Rust in the near future, but we are definitely looking at this programming language for several future developments. It’s cool, and we are thinking about it, but I’m not sure we will do it soon.

Q/What is the current process at Beam Hard Fork? How is it different from BTC?

The fork upgrade that we are planning is in June, to switch the POW algorithm. We are currently designing the procedure of how it’s going to work. We approach this with a lot of planning and care because it’s a very delicate process. We are just starting to plan this, it will happen in June, so we are still thinking about how to do this right.

Q/When will the hardware wallet go on sale? Will it be open source?

Right now we are working on implementing for the Trezor T model. It will be open source. We are not going to produce our own hardware wallet or something like that. It will just be another application on top of Trezor. There are some technical challenges we are facing here: the bulletproof implementation, and making it work with small amounts of memory.

When you create keys and sign transaction on the computer, you have almost unlimited resources so it works really fast, and when you are creating the transaction on the hardware device, which is smaller, has less capacity, and less processing power, we have to do more optimizations. So that’s why it can take some time. But we are working on that and I believe it will be ready soon. You will be able to use the hardware wallet with Beam.

Also, there is a difference because in Mimblewimble the transaction is created interactively both by sender and receiver, so the protocol is also working differently. Once we are done with the first implementation of Trezor T, we will immediately move on to Ledger and other popular hardware wallets.

Q/How is the progress on the Beam’s lightning network, and when will it go live?

The lightning network, which we call Laser Beam, is actually a two-part question. The first part is to create a point to point transaction. The way lightning works, is you pay the funded with some funds from the blockchain, then two wallets transact directly, and then after some period of time, the last transaction of this exchange is being sent to the chain, and that’s settled this open funded channel.

The trick here is not to allow to spend any one of the previous transactions, because if that happens you can basically trick someone into thinking they got some funds that they didn’t. This is the first part we are doing, we’re adding the relative time lock functionality which is required in order to make this mechanism work. It will be added in our fork in June.

The other part of the Lightning network is the routing, and it’s more complicated and interesting because you have to have a funded channel two points and two wallets, so you don’t have to create the channel every time between every two wallets.

At this point what we’re thinking about is having this work on a shift topology, so that you cannot actually route to any network at any time because this is one of the unsolved problems in the lightning network, that you can not easily calculate the route between the two points. It’s completely changing, and the funding is changing. We are thinking about is to make it work in the hub and spoke architecture, where we have several central hubs, to which many different clients connect.

This I believe can work. Right now what we’re doing is we are building a demo, which we hope to show you soon, of this point to point communication. Right after that, we will start working on routing. It’s very difficult to estimate how much time it will take to implement completely, but we are already working on it.

Q/Will it be possible to select a certain node, or run a local node on the Beam mobile wallet?

This is also a two-part question. Selecting a certain node, yes definitely, the next version there will, of course, be a setting that will allow you to select any node, including your own. Running the local node on the mobile wallet is possible. You can do that. We have done that. However, the exact use case, as you know it requires a lot of traffic, and quite a lot of battery life because the processing is intense.

What we have tried to do initially is to do a combination, so you have an ability to restore a wallet on the mobile device which requires a node because you have to download the blockchain and recognize your UTXOs using your owners key. Then delete this information, and connect to a remote node and continue working like that. However, it still requires quite a lot of resources from the mobile device, battery life, and memory you need 700mb free just to download the blockchain, and things like that. So we are still testing whether it will be practical. The answer is yes it’s possible, but we are not sure at this moment how practical it will be, but we are testing that right now.

I just want to add to this, that except for the memory requirements, Beam node requires relatively low usage, so in general it should be possible to run it on platforms with little resources.

Q/Who’s the better tech Beam or Grin?

Well, it’s not about who has the better tech, because there is nothing Beam can do that Grin can’t, and vice versa. The technologies are similar in a way. There are some differences in a way today, for example in Beam you can have identical UTXOs which allow us to create this feature of one side payments.

The idea of one side payments is that you can basically pre-create partial UTXOs and create some kind of a coin list, and send it to the other party. Then you can go offline and at any time the sender, just like in Bitcoin can create transactions, and send it to the network.

You will receive them eventually when you come online. However, it has some privacy tradeoffs. If anybody knows this UTXO that you published, they can trace that this specific transaction belongs to you. So it has limited use, for example for donations, or any other scenario where privacy is less important but you do want the ability this freedom of now being online at all. This is one of the differences, and there are several more, but I wouldn’t go so far to say that there is a better technology on Beam or Grin, it’s really not about that.

Q/Is development currently taking place on Beam confidential assets?

Yes, absolutely. We have support for confidential assets on Beam to enable them from day one. However, to use it there are several different scenarios that we are currently thinking about.

The idea of confidential assets is that you can create an emission of a different type of asset, so you can trade not just Beam on the Beam network, but different assets that might represent another currency, it may have some other emission, it may have its own rules.

The way it works is by adding additional generators to this Pedersen commitment that I just described, so just extend the number of tokens you can trade on Beam. It allows for a lot of very interesting use cases, and we’re currently investigating different possibilities of making this work, from becoming an STO (Security Token Offering) platform that you can actually issue security tokens on, maybe creating a stable coin on top of Beam. So there are a lot of options for how to use that.

I think this is one of the more interesting features that have a lot of potential in the near future. We are definitely developing it, and thinking about different use cases, we will announce once we have some interesting implementation details to report.

Q/Can you explain how confidential assets are actually created in detail? Is there a way in which one will be able to run a project/develop on top of beam blockchain?

Yes. There are several ways in which confidential assets can be done. The one that is currently working on the chain already but is not enabled yet, is the following idea. You have the Pedersen commitment which is just the sum of two factors, the value, and the blinding factor.

Each of them is multiplied by a different generator on the curve. So if you add another generator, so you have D multiplied by a generator, and now I add another generator and I have another value, B1. So this means that 1 can actually represent a different asset, so within the same transaction, I can transfer several types of assets. T

his is one of the possible ways to implement it. The way it works is that I can create an emission as an owner of this new asset, I can create a new asset, I can create an emission of some amount of this asset, and start trading them with people, and also I’m the one who can burn them later. I can receive them back later, and take them out of circulation.

I think this is the simplest way to explain it. However, we don’t yet have support for that in the wallet, so we can play with it on and development chains, but it’s not really enabled yet on the mainnet.

Speaking about Crypto

Q/Beam delivers on the properties of sound money but It is still hard to attribute any intrinsic value to Beam and most cryptocurrencies, is there any plan in the future to embark on a project that would add some intrinsic value to Beam?

I think we have touched on some of these points before. I think any system that can use Beam in technical scenarios, like confidential assets or payment platform, is adding value to Beam beyond just mining selling and all the things taking place right now. We are definitely, constantly, looking for opportunities to engage in such projects with many different organizations. We are working hard, exactly on that.

Q/Alexander Zaidelson mentioned in an interview somewhere that Beam could become a top 5 coin based on market cap, but where do you place it around the end of the year? In terms of adoption, exchanges, functional product?

I don’t have all the statistics and calculations in front of me in terms of the exact amount of coins, market cap, and things like that. In terms of adoption, exchanges, and functional product, I can assure you that all these things are moving forward at a great pace.

Adoption as one is a function of the things we discussed before, of how useable Beam is and where it can be applied. Exchanges are moving forward as well, slowly but surely. Functionality is something that we are very focused on.

Our roadmap shows that we are constantly adding useful functions that we think can be really beneficial to the platform as a whole, starting with Atomic Swaps, and many other additional components.

We are on the road to this exact position, this is our goal, to become a top cryptocurrency in full, really reliable, and practical. These are the top values of Beam as a project. Functionality, usability, and confidentiality of course, and stability.

Q/Is the reason for Beam not being listed on a major exchange because there is something wrong with Beam?

So, there is nothing wrong with Beam. I think eventually we will be listed. We are just three months old. There are a lot of factors at play here. Some of them being the difficulty of integration, and some of them because Mimblewimble is very different and works differently.

This is something we are all aware of, and yes the community is very aware of it. I think with some patience, we will get there. There is definitely nothing major standing between us and listing on major exchanges. All these things will be resolved and we will get there.

Q/How would do you think Beam and “Mimblewimble” technology will affect the rest of the crypto market?

I think Mimblewimble brought a great amount of interest and attention to the aspects of confidentiality and privacy on the blockchain. I think in many ways it’s revitalized this entire field because, in my opinion, it’s a very elegant solution.

You can basically explain it to anyone in the matter of half an hour. It does not involve super complicated math, it doesn’t involve a lot of different mechanisms combined together, it’s a very coherent and very elegant scheme that gives you both the scalability and the confidentiality without having to compromise on any of those. I think it was a great achievement and move forward for the space of confidentiality.

I also think that it has inspired a lot of additional research into both science and technology of confidentiality. I don’t believe Mimblewimble is the end word of this technology, but I think it’s a very important step forward and I’m very glad we have implemented this protocol and made a practical, working, a cryptocurrency based on it.

Today, almost everyone is aware of this technology, and of the projects implementing this. It appears in a lot of papers and mentioned everywhere. I think it’s made a huge impact on the industry.

Q/What does the team think about the current price of Beam and the network hashrate?

Firstly the network hash-rate is obviously related to price as well. As for the price itself, it’s also related to several different factors. The first one being the inflation rate right now, which is high. And as you know, we have the first halving coming up at the end of this year.

So some of that will change. We think that it also has to do with the fact of awareness, adoption, exchanges. Everything plays a role in this. At this point I would like to really thank our community for all the work they did so far, promoting Beam, our great ambassador team, and all the people that participate and actually help us with that.

I really encourage you to keep doing that, you are doing great so far. I think eventually it will also have an impact on the price, with time.

Q/Does Beam have plans to be added to any first-tier exchanges？

Once again, I cannot comment on any specifics, with some patience it will be fine.

Treasury and Foundation

Q/What is the treasury fund used for?

The idea of the treasury was to be able to raise some money, but in a way that would create a good alignment of incentive for everyone involved in the project, over a long period of time.

So just to explain in a few words how the treasury works. In the first 5 years of the project, 20% of each block is allocated to the treasury and from the treasury it is distributed to our investors who invested money in the project in the beginning, core team members, and also a large portion of the treasury is allocated for the foundation which will be started a little bit further on.

So this is how the treasury funds are distributed. All the information exactly about this, what percentages, can be found in the FAQ part of the website, so I won’t go into details. But this is how the treasury works, it goes to investors, core team members, and to the foundation that will be started.

Q/Can you maybe share progress on the Beam foundation in Switzerland?

I don’t think I have any actual updates, and it’s also not my area of expertise. I mostly handle the tech, but we are working currently every day to establish the foundation. It’s a process that is ongoing and moving forward every day. There are a lot of processes involved and it will be done eventually.

Q/What if Beam Foundation isn’t as efficient as the current team? What are the guidelines for Beam Foundation?

All these things are being determined, and are not finalized yet. The idea of the foundation is to be able to use the funds that are allocated to it, to move forward with the Beam protocol and the Beam blockchain, beyond the lifetime of Beam company.

And to have long term impact on the strategy and development of these technologies. So this is the idea, I’m not sure who will lead it at the moment. We are talking to several people we would like to have on the board of directors, but once again there is nothing specific I can discuss right now. The transition to the foundation is a process that we have already started in a way. It will take some time.

Our goal is to make it as smooth as possible because it’s a different type of governance, but it’s very important for us to be able to let go and make this transition smooth. Which will allow the foundation to develop the protocol further, for many years to come.

Q/How is the development for Mimblewimble on Litecoin coming along?

We had several discussions with Charlie Lee of Litecoin some time ago. We offered our help to the Litecoin Foundation in whatever they need to implement Mimblewimble technology via extension blocks on their chain. As far as I know, right now they are currently working internally on the improvement proposal draft, which will describe how exactly they intend to do that. This wasn’t shared with us, so that is where it is at the moment.

Q/When moon?

As I look around this industry, I think that the moon is going to be crowded very soon. I think we should go to Mars instead. But seriously, as a project and a company, we are doing a lot of things, and we are doing them all at once.

If we just list the projects we are working on right now at the same time: node improvement, desktop wallet UI UX, Atomic Swaps, one side payments, mobile wallet for Android and iOS, hardware wallet, lightning network integration and proof of concept, integration with pools, exchanges and third-party payment platforms, community engagement system that we will launch soon that will allow community to propose features and vote for them, we have created this Beam wallet demo machine that allows us to simulate different UI scenarios without actually developing them, and show demos on them which I will use in the video about the atomic swap, not to mention our website, our telegram bot, and other community engagement tools, the blockchain explorer, we are also working on i2p and TOR integration. So this is just a list of things we are doing now, concurrently, at the same time.

In addition to this, of course, there are a lot of marketing efforts, conferences, meeting with people, discussing plans, thinking about how to use and implement confidential assets on top of Beam and how to do this, and how the compliance comes into play in different scenarios.

Lots of research on topics like Dag protocols, consensus protocols, and many many more like this. I think that going forward for the year to come will bring us as close to the moon as possible in terms of functionality and practicality which as I said are our goals, without giving up on the quality of the product that I think so far is very high.

All of these things are happening and going to happen. it’s very important for us to have the support of the community and talk to us, ask questions, criticize, suggest. We are very open on all channels, telegram, discord. As you know Gus and Raskul are always there, and Guy Corem is always talking on all channels all the time. So we are listening and talking and communicating, and let’s keep it this way. It has been great so far, an amazing year, an unbelievable journey for me personally and for the entire team. Let’s keep it up and we will get there.

We would like to thank Angus and Raskul for their incredible work when it comes to the organization of this event and the transcript of the content.

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