Mimblewimble protocol is pretty new and has been put forth by an anonymous user by the name of Tom Elvis Jedusor, which is a fictional name for one of the characters from Harry Potter named Voldemort. It was conceptualized in 2016 but started to materialize now in 2019. So, Mimblewimble is one of the recent innovations in the crypto space, which helps improve scalability, fungibility, and privacy. (Mimblewimble explained)
Bitcoin transactions are recorded with UXTO (Unspent Transaction), wherein you get back the fund whatever is left after sending it across to the receiver. Hence there are always two outputs created-amount being sent to the recipient (spent) and the amount you are getting back (unspent).
For instance: Alice sending 0.350 BTC to Bob (Output for Alice)
Bob receiving 0.350 BTC (Input for Bob).
Now if Bob sends 0.250 BTC to Joey. For Bob there will be 2 outputs:
0.250 sent to Joey and the remaining 0.100 which is unspent.
For Joey, receiving 0.250 is the input for him.
In this process, no double-spend should be there. So the amount received should be equal to the amount sent. The person who is sending is the one with the private key and the ultimate authority.
Mimblewimble is a revolutionary technology and is a derivative of “Confidential Transactions”, which was conceived by former Bitcoin developer, Adam Back. Confidential Transactions enable the senders to encrypt the amount of Bitcoin they want to send by using “blinding factor”. A blinding factor is just a random value using elliptic curve cryptography, chosen by the sender, used to encrypt Bitcoin amounts in a transaction. By doing so, you can mask the amount being sent and generate confidential transactions.
Mimblewimble even leverages CoinJoin, which is a mechanism by which the payments from different transactions are mixed together to form a single transaction so that the outside parties won’t understand it was intended for which particular recipient. CoinJoin was proposed by Gregory Maxwell, and works by confusing the inputs and outputs of the recipient and the sender.
So, as far as Mimblewimble transaction is concerned, a block consists of inputs, outputs and multi-signature. So rather than signing each input of the transaction, you create multi-signature across all inputs and outputs. Not only Mimblewimble is private but also data-intensive. After subtracting the total inputs from the outputs, the result should be zero.
A Mimblewimble block contains:
As Bitcoin transactions are visible with the help of public address on the block explorer, that practice is no more there and you can stay private about your transactions with only the sender and the receiver knowing about the amount with the help of the blinding factor in case of Mimblewimble transactions.
Fungibility is the process by which one unit of a currency is interchangeable for another unit, without loss of value. On the other hand, if the currencies were gained by illicit activity, it might be labeled as tainted and might become less valuable as the merchants might refuse to accept. Exchange without loss of value is not possible and hence these currencies are termed as non-fungible. For Mimblewimble, there is no issue as there are no wallet addresses, making it difficult totrack where the token or currency might have originated from.
The scaling resolution was obtained by introduction of Lightning network. But the Mimblewimble technology is more scalable than Bitcoin as the transactions take less space in a block, which is utilized mainly when the cut-through process happens.
For privacy tokens like Monero, Dash, and Zcash, the problem is the additional size of the transaction which is because of the additional cryptography needs to grant additional privacy. The full block sizes bring apprehension to the scalability of the network. Mimblewimble provides inherent privacy to the transactions due to the removal of addresses and the aggregation of inputs and outputs.
As Bitcoin Core is the implementation of the Bitcoin protocol, there are two implementations for Mimblewimble protocol:
Grin is a Mimblewimble coin founded by a person under the pseudonym of Ignotus Peverell, again a character from Harry Potter series. Grin mainnet went live on January 2019, which embodies most of the Mimblewimble properties like no address, no visible transaction amounts and transaction history, and no fixed supply.
Grin offers two types of Proof of Work (PoW) algorithms, wherein those are aimed at both GPU miners and ASIC miners.
Beam is another implementation of Mimblewimble which is built on C++ programming language, which is headed by Alexander Zaidelson, who is an entrepreneur. Beam was also released on January 2019. Beam utilizes “Equihash” Proof of Work (PoW) algorithm, wherein each block produces 1000 transactions and a generation time of 1 minute. Mimblewimble plans to stay ASIC resistant to promote decentralized mining on the Beam network.
Even though the technology is still in the updating process and growth phase, the capability and validity tests are periodically done. As of now, Mimblewimble can be integrated into the BTC network as a soft fork or a sidechain.
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