Recap from OST LIVE with Chris Coney, Host of The Cryptoverse — Mimblewimble Explained
Chris Coney is the founder of Cryptoversity, an online school for Bitcoin, cryptocurrencies, and blockchains with a mission to lead people to freedom through education and awareness. Coney joined us for a lively discussion of Grin, Beam, and the Mimblewimble protocol.
What is Mimblewimble?
As Coney explains it, Mimblewimble is a protocol for ensuring privacy while making storage requirements for blockchain transactions much lighter. It was originally intended for Bitcoin, a 10-year-old blockchain that is already over 200 GB in size. Bitcoin currently processes less than 10 transactions per second. When network activity increases to thousands of transactions per second, the blockchain will be enormous.
Bitcoin is not private. You can follow the chain to any original Bitcoin transaction; it’s a transparent ledger that can be audited by anyone. Mimblewimble was created by Tom Elvis Jedusor, an anonymous person or persons. The name “Mimblewimble” comes from the world of Harry Potter, where it represents a tongue-tying curse. Tom Elvis Jedusor is a pseudonym for Voldemort in the Harry Potter books and films. Although the protocol was initially designed for Bitcoin, it hasn’t been implemented on the Bitcoin blockchain, likely because Bitcoin is an established cryptocurrency and implementing Mimblewimble would change its fundamental design. As a result, there are new blockchains building implementations for Mimblewimble, two of which are Grin and Beam.
Although Mimblewimble promises to reduce storage requirements, it doesn’t ease other limitations of blockchain, included limited transaction throughput.
On Bitcoin, every transaction from the genesis block and every moment since then has to be stored forever. With Mimblewimble, only the current state and account balance are recorded. Users determine account balances on Bitcoin is by looking up the transaction history on the public blockchain. The size of a Mimblewimble-based blockchain such as Grin or Beam is not based on how many transactions have happened so far; rather it is based on the number of users. For example, if there are 1 million users, then the current state of 1 million accounts will be recorded. If that number of users were to increase by 10x, then the size of the blockchain would increase 10x.
Forks of Bitcoin such as Bitcoin Cash (BCH) and Bitcoin SV (BCHSV) have addressed scaling challenges by increasing the block size. Bitcoin SV has the biggest block on a public network: 64 MB. A major challenge of increasing the block size is that the size of the blockchain also increases. This requires complex computing power for mining, increasing the barrier to entry for new miners.
The reason that Mimblewimble blockchains are private is because the transaction history is not stored on the chain. The fundamental way that Mimblewimble transactions work is via two individual wallets that connect to each other directly and conduct transactions in private rather than broadcasting transactions to all the nodes in the network. In Mimblewimble, only the sender and the receiver know about transaction details. The results or outputs of the transaction are submitted to ensure that no new coins were created.
Mimblewimble is not the only technology seeking to address weaknesses in blockchain scalability. For example, CoinJoin mixing is used by Dash as a privacy solution for existing cryptocurrencies. With CoinJoin-based wallets such as Wasabi, users can click “mix” upon receiving transferred funds. This will CoinJoin the cryptocurrency, literally mixing up the cryptocurrency of various users. Coney says it’s like taking everyone’s $100 bills, mixing them all up, and then giving them all back. Users don’t know if they got the exact same $100 bills they had, but because dollars are fungible, it doesn’t matter.
Grin and Beam
Grin and Beam are specific networks that have been launched from scratch using Mimblewimble as the fundamental data structure. Both Beam and Grin are best understood as privacy coins to be used as a currency, rather than a store of value or a blockchain for DApps.
Beam is a public for-profit company. According to Coney, it has raised and spent private investment funding on developers to launch the Beam network. Twenty percent of all block rewards for five years are used as a founder’s reward to fund Beam. According to Coney, Beam’s CEO has announced that transactions on Beam are private by default, but there will be a mechanism to almost make them un-private for the benefit of auditing, similar to Monero’s view key. Beam also recently published a blog announcing co-operation between the Litecoin Foundation and Beam to link the two networks, which would allow a Mimblewimble variant of Litecoin to be swapped across chains, essentially without major changes to the Litecoin blockchain. This partnership would create a private Mimblewimble-based coin, something Coney doesn’t think will be implemented on Bitcoin.
Grin is very much a Linux approach to blockchain. It’s entirely community-driven with no profit incentive. Iit is funded entirely by donations and shared on an open-source basis. Both Grin and Beam have been launched on mainnet this year. The creators and core developers of Grin are anonymous.
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OST blockchain infrastructure empowers new economies for mainstream businesses and emerging DApps. OST leads development of the OpenST Protocol, a framework for tokenizing businesses. In September 2018 OST introduced the OpenST Mosaic Protocol for running meta-blockchains to scale Ethereum applications to billions of users. OST KIT is a full-stack suite of developer tools, APIs, and SDKs for managing blockchain economies. OST partners reach more than 300 million users. OST has offices in Berlin, New York, Hong Kong, and Pune. OST is backed by leading institutional equity investors including Tencent, Greycroft, Vectr Ventures, and 500 Startups.