Blue Helix(BHEX)
Feb 19 · 15 min read

https://beamprivacy.substack.com/p/beam-2019-week-7

Alexander Zaidelson is the CEO of Beam.

Prior to Beam, Mr. Zaidelson spent over 2 years in CIRTech Venture Capital Fund investing in growth- and late-stage technology companies in Israel.

Before CIRTech, Mr. Zaidelson served as Vice President of Product Management at WeFi Inc., network connectivity and customer behavior analytics company.

While at WeFi, Mr. Zaidelson spearheaded the company’s pivot to customer behavior analytics, overseeing the creation of leading data products that are unique in the industry. The products created by the team helped WeFi win major clients in mobile application space. WeFi was ultimately acquired by TruConnect Inc.

Prior to WeFi, he co-founded Nareos, a mobile peer-to-peer file sharing company that pioneered content and video sharing on the smartphone in the pre-iPhone era.

Mr. Zaidelson also founded Wikitup, a visual desktop dictionary company that was acquired by iMesh. An entrepreneur at heart, in the course of his career he also served as co-founder or adviser to a number of start-up projects.

Mr. Zaidelson holds an MA in Applied Linguistics from St. Petersburg State University and an MBA from Tel Aviv University.

There’s no doubt that Beam and Grin, two new private coins based on the MimbleWimble protocol, are the hottest topic in this crypto winter. On 3 January 2019, Beam mainnet was launched, and attract attention from the large crypto circle. Most of the BEAM team members are from Israel, and the technology and operations teams have extensive experience. Among its investment institute list, we can see Node Capital and 13 others, including Continue Capital.

Beam recently announced its 2019 roadmaps, including a partnership with LTC, integration of the lightning network into Beam, and expanded payment use case.

Dr. Kylin Lin, BHEX Senior Blockchain R&D Engineer, Ph.D. candidate of Institute of Software, Chinese Academy of Sciences, winner of President award of Chinese Academy of Sciences. His main research direction is hidden information transmission and he has published several papers in IEEE Transactions on Computers and other top journals and conferences. He was responsible for the architecture and algorithm design of X86CPU execution unit in the Chinese Academy of sciences. Now he has joined BHEX as a senior blockchain engineer.

————————————————————————————————

On the afternoon of February 19, BHEX and Cointime invited Beam CEO Alexander Zaidelson to an AMA. Alexander had in-depth discussions with BHEX Senior Blockchain Developer Dr. Lin on several key areas in Beam development.

This is the first time the BEAM team has an in-depth sharing with Asian communities. The AMA is live streaming in five languages: Chinese, English, Japanese, Korean and Vietnamese in BHEX global community and Cointime.

“Lightweight” is a distinctive advantage of Beam comparing to last generation private coin

1. We noticed that BEAM has a fairly strong technical team based on info from your website — it only took 9 months from the start of development to the launch of the main network. However, I believe the process is definitely not as smooth as it looks. Could you please share with us one of the significant challenges you encountered in the process and how did you overcome it?

BEAM CEO Alex: That’s a great question. Of course, things do not always go as smooth as it may look. During January, we had two serious issues — the first one on Jan 16 and the second one on Jan 21. On Jan 16, we discovered, by ourselves, a wallet vulnerability that under certain scenarios could lead to funds being stolen. We had to release a fix quickly without opening the source of the fix. We got some criticism from the community for the way we handled the issue and for insufficient transparency. Eventually, we published a full report on the vulnerability (see it here: https://medium.com/beam-mw/mimblewimble-wallet-vulnerability-report-7b8e88dc7e)

Another one was the blockchain stop event issue that occurred on Jan 21, only 3 weeks after launch. At around 9 am GMT on that day block production stopped. I must say to me personally it was pretty scary to see our block explorer without any new blocks generated. It looked like our “baby” was unconscious and needed urgent help. We identified the issue quickly and worked to resolve it while keeping the community updated. Having learned from the previous time, this time we issued frequent updates and kept the community up to speed. The issue was resolved after several hours and we actually received some praise for the way we handled it.

While I certainly don’t wish to have any more critical issues at Beam, they might happen and I believe we are ready to handle them. As I like to say, the only person who makes no mistakes is a person who does not do anything.

2. The BEAM official wallet suffered a serious vulnerability last month. How did that happen? What remedies did the team adopt? How secure is BEAM? How robust is the system against hacker attacks? We noticed that SmartDec is currently responsible for the security audit of BEAM’s codebase. Can you please share the latest progress?

Beam CEO Alex: Prior to launch, we invested significant effort into reviewing the core elements of our codebase. We used the help of leading security audit firms, such as Kudelski Security, Least Authority and SmartDec.

The main focus of the review was the robustness of our cryptography implementation. The results of the audit were quite positive, all reports were published and can be viewed here.

The vulnerability that was discovered in January by ourselves and resulted from something we left over in our wallet’s code. It was identified by our team and quickly fixed. We may consider additional security audit of our wallet code in the future.

3. How does BEAM protect users’ privacy by utilizing the Mimblewimble protocol? Compared to the existing private coin, what progress has been made in this new privacy protocol? What is the competitive advantage over other private coins?

Dr. Kylin Lin: Utilizing MW protocol’s feature of hiding input and output of a transaction, BEAM is able to protect trading information from exposure. MW protocol does not rely on complex zero-knowledge proof or coin mixing, it is much lighter and simpler. One big advantage of BEAM comparing to other private coin is its scalability and lightweight.

Beam CEO Alex: Mimblewimble protocol has some really remarkable properties by combining privacy and scalability.

Mimblewimble changes the paradigm that was prevalent on the blockchain before. In most (if not all) pre-Mimblewimble cryptocurrencies a user is identified by an address. In Mimblewimble, there are no addresses, and thus there is no trail of senders or receivers. Amounts are hidden as well. The Beam blockchain only stores the current state of ownership of the coins (each coin is locked by a key that only the owner knows), and no transaction history is recorded on the blockchain. Since there is no need to store the transaction history, the blockchain is quite compact (we estimate 3 to 10 times smaller than that of Bitcoin, on a per-transaction basis) The best-known pre-Mimblewimble privacy coins, such as Monero and Zcash, are both built on Bitcoin paradigm, i.e. sending funds between addresses and storing transaction history. In order to hide the information on transactions, Monero uses ring signatures (essentially, fake transactions are created to obscure the actual ones), and Zcash uses zk-SNARKs, a brilliant and complex mathematical construct. As a result, in both cases, the blockchain scalability suffers because additional data is added to hide the real data. For example, in Monero the current per-transaction size is 5 times larger than Bitcoin's and in Zcash it is 9 times larger.

In addition to basic Mimblewimble, we also implemented Dandelion that increases resilience against network monitoring attacks. Without Dandelion, transactions would be immediately broadcasted to the network, making it possible for the attacker to trace the sending node.

More in-depth comparison of Beam, Monero, and Zcash can be found here: https://medium.com/beam-mw/whats-the-difference-between-monero-zcash-and-beam-953eafd89354

4. BEAM started in April 2018, which was later than GRIN. Why did the team choose to develop BEAM while GRIN already exist? Is there any distinctive difference in their technical solution for privacy coin sector?

Dr. Kylin Lin: Though both BEAM and GRIN are based on MW protocol for its privacy feature, the private coin is not all about privacy. BEAM and GRIN differ in their mining mechanism, operation, and economical design. Technically, one obvious difference is that BEAM has a conversion of address so that users can use BEAM in a more traditional way, unlike GRIN where the counterparty of transfer is an IP address.

Beam CEO Alex: In addition to basic Mimblewimble, we also implemented the Dandelion that increases resilience against network monitoring attacks. Without Dandelion, transactions would be immediately broadcasted to the network, making it possible for the attacker to trace the sending node. With Dandelion, a transaction is not immediately broadcast to the whole network, but rather sent thru several nodes (stem phase) before being finally broadcast to everyone (fluff phase). On each step in the stem phase, inputs are merged together for additional privacy,

Beam has several advantages over Grin implementation. Some examples:

1. Beam provides better privacy through its use of decoy outputs when needed in the dandelion stem phase. https://github.com/BeamMW/beam/wiki/Transaction-graph-obfuscation

Background article:
https://medium.com/beam-mw/on-linkability-of-mimblewimble-da9ba71e83b4

Beam discussed it with Grin dev:
https://gitter.im/grin_community/Lobby?at=5bebe2c36b9822140d29e4b2

(Valdok is Beam’s lead dev)

2. BEAM will support one side payments: https://github.com/BeamMW/beam/wiki/One-side-payments

3. BEAM has a system-wide solution for Transaction “negotiations” between sender and receiver, called SBBS. It protects privacy better than Grin’s ad-hoc solutions,

4. BEAM has many architecture and implementations improving compare to Grin. As an example, Beam node doesn’t hold the entire UTXO set in memory.

5. As a private coin, BEAM was originally designed to better protect the privacy of traders. But trading BEAM requires depositing it to exchanges, and most (centralized) exchanges require KYC or the account is bonded with user’s phone or email, which seems to go against the original purpose of the private coin. How do you see it?

Dr. Kylin Lin: Centralized exchange may not only be the problem of a private coin but rather the problem for the whole blockchain industry, however there are a lot issues in DEX. Efficient, secure and cross-chain DEX is one of the most needed infrastructures for the blockchain industry.

Beam CEO Alex: In principle, we don’t see a problem with centralized exchanges — they have their benefits by providing liquidity and custody. However, our goal is to allow users maximum choice and full control over their privacy. To that end, we are developing atomic swap functionality to let users exchange Beam to BTC without the need for a centralized exchange.

6. Compared to BTC, BEAM has made some advancement in the following area: privacy, scalability, and lightweight. However, by far BEAM’s tps is still as fast. How will BEAM improve on this?

BEAM CEO Alex: Beam is a Proof-of-work coin and thus it is inherently slow. BEAM TPS is around 17 transactions per second which are pretty slow. BEAM is researching various solutions to increase layer 1 TPS, like GhostDAG and other solutions.

Another potential solution to this lie in second-layer technology such as Lightning. We already started researching integration of Lightning into Beam and published an initial paper on that. Another possible solution to transaction speeds is a federated sidechain — we are looking into this as well.

BEAM plan to expand its user case in 3 directions

7. In your opinion, what is the most suitable usage scenarios for the private coin?

Beam CEO Alex: In my view, ANY financial transaction should be confidential. People always prefer not to disclose their financial dealings unless required by the law, and even then, the disclosure is only to the relevant parties rather than to the general public. Therefore, I believe that any scenario where people transfer value is a suitable use case for a private coin.

With Beam’s optional compliance feature, users will be able to conduct transactions confidentially but still be able to report them to auditors if they choose to do so, expanding the use cases to regular businesses.

8. With addresses only being temporary, how would recurring payments be allowed? Verified? Etc? For example, a shop has a BEAM payment option. How would they give an address for payment that multiple visitors can use?

Dr. Kylin Lin: Actually BEAM does support permanent address.

Even if you choose dynamic addresses, it is fine as all these addresses could link to the same account or private key. It is similar to the design of layered wallet, a private key or mnemonic can derive a lot of different addresses.

Beam CEO Alex: Beam supports not only temporary addresses but also permanent addresses. A permanent address can be published and used by anyone who wants to send money to the wallet. Such permanent address can be easily created in the Receive screen of our wallet by choosing “Never” as an expiry date.

However, even with the permanent address, the recipient’s wallet needs to be online to accept a payment. We realized that in some cases it may be an inconvenience (for example, organizations that accept donations may not have the resources/skills to keep their wallet running 24/7). To address that, we introduced the concept of “one-sided payments”, in which the recipient can publish a set of UTXOs that senders can then use to create transactions. By having several UTXOs with different values (think of fiat coins or banknotes), the recipient allows senders to assemble any amount of money.

9. How would BEAM expand its user case when it comes to payment?

Beam CEO Alex: We plan to expand the payment use case along with several directions:

1. Payment speed. By integrating lightning and/or creating a federated side chain, Beam will be able to allow much faster payments

2. Confidential assets. Beam blockchain allows issuance of additional kinds of tokens. Those may include tokenized securities, scablecoins and even crypto kitties.

3. Opt-in compliance. By introducing opt-in compliance, Beam will enable use cases where businesses require both confidentiality and subsequent audit, making it a currency that can be used in real world

The main private coin has a total market cap of 2 billion USD and the future is bright

10: Even in the presence of Monero, Zcash as the representative of the private coin, the current private coin market is still very small, as the new generation of private coin, how would BEAM expand the influence, and eventually integrated into the global existing cryptocurrency infrastructure?

Beam CEO Alex: I would argue that the privacy coin market is not so small. Monero, Zcash and Dash are all in the top 20 coins. If we combine Monero, Zcash and Dash (the latter is not cryptographically private, but promotes itself as such), we get a total market cap of close to $2B, putting not far from Tether and Bitcoin Cash.

In the past, a lot of people felt that anything going on in the crypto world is unseen to others, but now they begin to realize it is not so. As real-life (as opposed to speculative) use of cryptocurrencies grows, there will be more and more people who realize that it is hard to do business transactions without privacy, and the privacy coin market will grow.

BEAM will expand the influence by creating a usable and scalable private coin that answers many use cases and allows not only full privacy but also selective disclosure. The BEAM will let businesses use cryptocurrency and have full sovereignty over their financials, but also to remain compliant to financial regulations.

11. From the perspective of the long-term monetary economy development, what will be the price of Beam like? Will it have the characteristics of digital gold just like bitcoin?

Beam CEO Alex: BEAM’s emission schedule is closely modeled on Bitcoin’s, this it has very similar characteristics. Beam has its first block reward halving after one year, and then halvings occur every four years. The price of the coin depends on many factors and I cannot responsibly say anything about the where it will go.

12. With the dip of bitcoin price, the mining industry was hit, miners’ profit dropped hugely, hence miners are generally support PoW coins to seeking new opportunities. Do you think new coin like BEAM will bring a new trend to the mining industry?

Beam CEO Alex: Beam is mined using GPUs, and supports both Nvidia and AMD cards. This results in democratized mining and lets a single person create value using their GPU. By the number of people mining Beam (hundreds of thousands of GPUs) we can judge that there is a lot of interest in the coin, and a lot of people believe in it. I think the community understands that Mimblewimble represents the next generation of cryptocurrencies and people are very interested to mine Beam early.

13. Some said that the trend of the private coin is because of an exaggerated reaction to positive news under the bear market, what’s your opinion? From your perspective, what factors will lead to the explosive growth of private coin?

Beam CEO Alex: I think more and more people understand that financial activity requires privacy. I also think a lot of people are excited about Mimblewimble tech — for the first time this technology allows privacy without sacrificing scalability. As adoption of crypto grows around the world, it will become more and more clear that it is hard to transact without confidentiality, and interest to confidential currencies will grow more.

14. Currently there are many private coins in the market, How do you see the future of private coin? Do you think there will be many private coin existing at the same time or just a few of them remain? Compare to other private coin, what advantages or disadvantages does BEAM have?

Beam CEO Alex: Privacy in crypto will be one of the main themes of 2019. I think that more private coins will definitely appear, probably based on Mimblewimble. As with the general crypto market, few coins will eventually capture most of the market share.

Compared to other private coins, Beam has the advantages of great usability, a determined team with proven fast execution, a rich roadmap and a vision of creating a currency that can be used both in fully confidential and in transparent settings.

15. The Grin price took a roller coaster ride in last month, what’s your opinion about the early development of the Grin? and the Beam?

Beam CEO Alex: I think that market adoption of both Beam and Grin was great. The number of GPUs mining Grin and Beam is around 1.5 million, which is pretty phenomenal for currencies that are only several weeks old.

It is hard for me to comment on the “rollercoaster” of Grin price — there are different market forces at play. We do know however that very significant funds were invested in Grin mining, and this may have led to sell pressure with investors wishing to recuperate part of their money.

What will Beam do in 2019?

16. What is the biggest challenge to achieve this under the current market?

Beam CEO Alex: I believe that the overall adoption of cryptocurrency in day-to-day life is one of the bigger challenges. While we understand that Beam alone cannot solve this problem for all of the industry, we will spend a lot of effort to make Beam easy to use and implement real-life use cases for Beam as currency and for Beam-based confidential assets.

Using a military analogy, I see Beam as one of the avantgarde regiments of the crypto army fighting for usability and adoption.

17. About BEAM’s partnership with LTC, How do they complement each other in scalability, privacy and security? Will such partnership lead to potential hard fork?

Dr. Kylin Lin: LTC would like to introduce a privacy feature, but it is hard to use MW protocol on current LTC blockchain, which will lead to a hard fork. A better approach would be to use some existing privacy coin’s technologies to hide some details of transactions.

Beam CEO Alex: Our partnership with LTC is around implementing Mimblewimble as extension blocks for Litecoin. This will allow the confidential transfer of value on Litecoin. It may lead to a fork in LTC, but not in Beam. We are currently discussing the high-level architecture of the solution and will be able to share more details later as we go.

18. Regarding on BEAM 2019 road map, “Lightning Network” has a POC that it can significantly uplift BTC’s tps, how will BEAM incorporate “Lightning Network”?

Dr. Kylin Lin: In order to support a layer 2 extension like Lightning Network, BEAM need to support multi-signature and smart contract first. Of course, when it comes to its privacy feature, there are still a lot of technical challenges to resolve.

Beam CEO Alex: We do plan to work on a POC of Lightning payment channels, demonstrating how this can be integrated into Beam. We did some preliminary research and we now know what needs to be added to Beam Blockchain in order to support lightning.

19. In the roadmap, BEAM wish to allow enterprise to make private trade while disclose the trading information in a selective and secured manner. However, the current design of BEAM is that such information will not be stored in the block, does it mean BEAM will need to design a sidechain for enterprise users, and how would BEAM evaluate the potential compromise on its privacy feature?

Beam CEO Alex: We are still considering various architectures for this feature. Most likely, however, such trading information will be stored off-chain, and the blockchain will only store certain references to such information per transaction, in the form of hash.

20. Last, let us talk about some fun stuff — we noticed that BEAM often tweet music-related content and seemed that your team seemed to have quite a few music enthusiasts, So did The BEAM logo take some inspiration from Pink Floyd’s classic album The dark side of The moon?

Beam CEO Alex: I am glad you asked. Indeed, we love music and some of us even play instruments (guitar, piano, voice). We may even create a Beam band some day.

I think there was some subconscious inspiration from the Dark Side of the Moon (we are building Money, after all). But the main idea of the logo was to show how distinguishable rays of light(transactions) go through the prism (our Mimblewimble blockchain) and become white light where nothing can be discerned.

Blue Helix (BHEX)

Blue Helix (BHEX)

Blue Helix(BHEX)

Written by

Blue Helix is an innovative crypto assets financial services provider. We are focus on Bluehelix decentralized custody and clearing solution and BHEX Exchange

Blue Helix (BHEX)

Blue Helix (BHEX)

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade