Good afternoon follow Cryptoacademy community members, and welcome to my homework task for this week lecture, which is on the MimbleWimble protocol. Mumblewimble protocol is a very interesting topic when it comes to cryptocurrency, it has many outstanding features such as improved privacy and scalability, etc and it's one of the trending protocols. This is homework task for this week.
WHAT IS MIMBLEWIMBLE PROTOCOL?
Mimblewimble funny as it may sound, it's a blockchain protocol technology that provides better ways of interacting, communicating and transacting in blockchain transaction. The Mimblewimble was discovered in 2016 by scientist Tom Elvis Jedusor and the name was derived from the Harry Potter old magical movie.
The Mimblewimble protocol was designed to enable advance abilities and capabilities in the blockchain security protocols, thereby guaranteeing more secured, improvement in privacy, very effective in data storage, improvement in scalability and efficiency. It was mainly introduced to be a solution to the privacy and scalability problem been faced by many blockchain technology. Below are some amazing features of the Mimblewimble blockchain protocol.
The MimbleWimble protocol use elliptic curve cryptography to minimize the keys to a smaller size than other protocols, and addresses are not required to be on the block nor even transaction data, this ensures increased storage space, thereby increasing efficiency than that of other protocols. This Elliptic Curve Cryptography uses discrete logarithms to assign keys to different transactions on a Blockchain, It is complicated and complex when compared to ordinary logarithms, it helps to ensure confidentiality and privacy while performing transactions.
We can simply say that with 10% of the resources use by Bitcoin, it's enough for Mumblewimble to operate, this is how innovative the protocol operates, guaranteeing users great benefits. The protocol has exciting features like security protection, amazing scalability, efficient storage, and naturally a decentralized protocol. The mimblewimble protocol combines numerous cryptographic protocols to achieve privacy and scalability transaction,
HOW MIMBLEWIMBLE BLOCKCHAIN PROTOCOL WORKS.
Mimblewimble protocol as said above is a protocol that has advance and upgraded the blockchain technology, for example,
mimblewimble protocol has helped in the reducing of excess and reoccurring transaction data, by eliminating redundant data from the Blockchain.
It's very obvious that the mimblewimble protocol works in an amazing method, providing users with confidential transactions and using elliptical cryptography to ensure that transactions remain anonymous. The discrete logarithms are used in encrypted data, thereby ensuring that transaction data are only accessible to the two parties, and can communicate processes of their transaction and create a private key accessible only to sender and receiver.
In mimblewimble protocol for example, if Obi is encrypted in transaction with CY (transacting), Obi can see the transaction data of the transaction with CY but CY can't be able to verify where Obi got the token he is sending to him because there is no transaction history like other protocols, all transactions are encrypted and can only viewed by those who participated in that transaction. It also uses a feature called Coinjoin, this feature combines many transactions from different users together, which ensures that its impossible to detect or identify any user or there transaction. Therefore, you are not access a transaction data if you're not in that.
Since the transactions are Coinjoin, this makes it impossible to find transaction data in mimblewimble protocol, the verifying of transaction data slow down Bitcoin transaction speed but mimblewimble group them together into a single transaction and validate all without revealing any transaction data.
This ensure that the mimblewimble protocol histories are compact and thereby increasing the level of its scalability, and also the Cut-Through feature ensure that huge amount of data are avoided to be in the big Block and yet keeping privacy and the security of the blockchain intact. The mimblewimble protocol uses a validating method that allow transaction to be validated without miners gaining full access to the transaction data. It adds all inputs and outputs transaction together, in bid to ensure equal, and new transaction are not produced.
For example, In a UTXO transaction send by Obi with the input of 5 BTC and also with two outputs of 2 BTC going to Ada and the remaining balance of the 3 BTC after the transaction fee have been deducted, will go back to Obi's wallet. In Bitcoin UTXO system, outsiders can trace the transaction since the transaction is not a Coinjoin transaction. In mimblewimble system of UTXO, If James provided an input of 0.6 BTC having two outputs of 0.3 BTC going to Chi while the remaining balance of 0.3 minus the transaction fee will go back to James wallet. The mimblewimble protocol transactions are Coinjoin transactions, therefore outsiders can't trace any transaction because it's impossible to identify specific user's transaction or amount
Both parties agreed on the transaction amount and detailed of the transaction
The sender and the receiver authenticate their desired transactions
The sender now sends the agreed quantity or amount to the receiver
The receiver is then notified that the required quality of assets has been received into the wallet of the receiver.
WHAT IS CONFIDENTIAL TRANSACTIONS (CTS)?
CTs is specially designed for the purpose of performing anonymous activities on a blockchain, confidential transactions was discovered in the 2013 by some notable scientists known as Dr. Pieter While, Dr Adam Black, Andrew Poelstra and Gregory Maxwell.
Confidential transactions as the name implies, simply means performing anonymous, private or secret buying, selling or any business activities on a blockchain privately. Confidential transactions is a multi-signature system designed with the Unspent Transaction Output (UTXO) system, which is also used by Bitcoin. However, in MimbleWimble protocol addresses are not included in the values encrypted by the blinding factors (private key), this private keys are only accessible by the UTXO owner, thereby ensuring that there is no possibility of anyone knowing the owner or value.
One of the main fundamental properties of this development remain the zero knowledge, which are referred to as the Zero Knowledge Protocol (ZKP), it's this ZKP that encrypt inputs and outputs and the transaction data, thereby making it only accessible to the sender and the receiver. You can also say that
confidential transactions are cryptographic features of mimblewimble protocol that ensures that transaction data are encrypted, thereby remaining confidential to the participants in that transactions.
Formula used by Confidential Transactions
- Pedersen commitment schemes
- Borromean ring signature.
formula used for Confidentiality Transactions(Cats)
This is the Pedersen formula
C ( BF1 + D1 ) + C ( BF2 + D2 )
=C ( BF1 + BF2, D1 + D2 )
This formula ensures that data are secured in a confidential transaction.
HOW MIMBLEWIMBLE PROTOCOL CAN BE UTILIZED ON THE BITCOIN
Bitcoin and the mimblewimble protocol will be a perfect integration because both of them uses the same Proof of Work (PoW) consensus mechanism algorithm and the UTXO system. This integration will help Bitcoin to process multiple transactions as a single transaction, thereby improving the scalability and privacy issues. Now let's visit Bitcoin block explorer for practical examples
Looking above you can see the Bitcoin blocks and agree with me that it has no privacy because every transaction data summary is public.
This is a transaction in Bitcoin and the transaction details are made public, from the input and output, to transaction fee etc all are public
The above image is input and output transaction details of the Bitcoin which is accessible because they are not encrypted.
The Bitcoin protocol allows outsiders to view balance of users without having access to their wallet, meaning there is no privacy transaction with Bitcoin. Storing all this heavy transaction data contribute to slow transaction speed.
The mimblewimble protocol if implemented into Bitcoin will use its features such as Coinjoin and CTs, its own version of UTXO, etc to help remove much storing of transaction data which is one of the reasons of it's slow scalability, avoiding this will improve Bitcoin transaction speed and privacy
If the mimblewimble protocol is adapted by Bitcoin, the encryption of transaction data, which allow only participants of a transaction to have access to the transaction data because it's encrypted with a blinding factor (private key), this will ensure that all Bitcoin transactions is private because of the encryption.
Now let's visit the Mimblewimble block explorer for practical examples for you to understand the importance of the mimblewimble protocol.
This is mimblewimble blocks and you can see that there's less transaction data display because transaction data are encrypted with a signature key which ensures that this data are only accessible to participating parties
Since Bitcoin have been facing the issues of privacy and scalability for a long time now and I believe if Bitcoin can implement a side chain or 2layer using the mimblewimble protocol, it will improve privacy and scalability.
Now let's take another practical example for better understanding
This is a transaction in the mimblewimble protocol and you can see that both parties participating in the transaction are anonymous, and you can't trace back where the sender got the token, their wallet balance and addresses because of the privacy features of the mimblewimble protocol.
With the combination of numerous cryptographic protocols which the mimblewimble protocol uses to achieve privacy and scalability transaction, Bitcoin partnership with the mimblewimble will be of great benefits to Bitcoin.
ADVANTAGES OF MIMBLEWIMBLE
Advantages of the mimblewimble protocol are numerous and cannot be over emphasized, so let's go through a few of its advantages below.
Privacy
The Mimblewimble protocol has really advance the privacy of the Blockchain, resulting to anonymous and confidential transactions on the Blockchain technology. With the innovation of mimblewimble protocol, transactions have become private, third parties are avoided from interfering and seeing details of transactions.
Scalability
The mimblewimble protocol has improved the blockchain in the sense that storing transaction histories are eliminated, which has help to improve the scalability and stability level.
Smaller size of blocks
Due to the fact that mimblewimble protocol remove irrelevant information from the Blockchain, the size of the blocks on a Blockchain will be reduced.
** Eliminate Redundancy**
Redundancy is the act or process of doing or sending a message or related messages repeatedly. It also said to be the re occurrence of data on any platform, and the mimblewimble protocol have eliminated it by group random transaction together which ensure that new ones are not fine in there.
DISADVANTAGES OF MIMBLEWIMBLE
In everything that has advantages there must be disadvantages as well, so mimblewimble protocol with all it nice attributes has many disadvantages as well.
Prone To Attack Form Quantum Computer
Because the Mimblewimble protocol users signatures, it can be easily hacked by quantum computer.
Increase Transactions Time
One of the disadvantages of mimblewimble protocol is that, since it group transactions, this will increase the transaction time.
Anonymous
This attribute of a Mimblewimble protocol is a very nice attribute but at the same time it has down sides, which is for example, If I transacted 70 steem instead of 50 steem. In a situation like this transaction can't be reversed and since the parties are anonymous.
DISCUSS ABOUT CRYPTO THAT MIMBLEWIMBLE PROTOCOL.
They are many crypto projects that uses or have implemented the Mimblewimble protocol such as:
- Beam
- Grin, etc
Beam
The Beam token is a privacy and scalability driving cryptocurrency that utilizes the MimbleWimble and LelantusMW protocols, with the intention of exploring the confidential Decentralized Finance (DeFi). Its consensus mechanism is based on the Proof-of-Work (POW) agreement algorithm. The MimbleWimble protocol, gives Beam an enhanced privacy and fungibility, improved scalability and reduced bloat, also ensuring that addresses won't be stored, in a bid to ensure private transaction and also with the Implementation of LelantusMW protocol into the blockchain offers its own anonymity.
The Beam blockchain was designed with the features of MimbleWimble, which is based on full confidentiality of transactions on the blockchain, and doing this without affecting scalability. It was designed with the Unspent Transaction Output (UTXO) system, which is also used by Bitcoin. However, in MimbleWimble protocol addresses are not included in the values encrypted by the blinding factors (private key), this private keys are only accessible by the UTXO owner, thereby ensuring that there is no possibility of anyone knowing the ownership or value.
How to Create a Transaction
Creating a transaction on Beam, both the sender and the receiver will have to achieve a communication between their wallets, the transaction input will be supplied by the sender and then both will create respective outputs indicating the range and attesting values are non-negative, after all this is achieved, the transaction will be sign by both of them and then sent to the nodes.
Features of BEAM
- It gives users full authority over their investment.
- It gives users full control over their account.
- It gives users privacy
- It inflationary model is lesser than that of many other tokens.
- Beam uses PoW consensus mechanism
- It uses mimblewimble protocol
- It performs atomic swaps, escrow, and time-locked ones.
Where You can Buy Beam
- Hotbit
- Binance
- BitForex
- Gate.io
BEAM Price Statistics
Statistics
| Beam statistics for | Today |
|---|---|
| Beam Price | $0.7258 |
| Price Change. | $0.02078 |
| 24h | 2.95% |
| Trading Volume | $12,194,078.87 |
| 24h . | 53.82% |
| Volume / Market Cap. | 0.1712 |
| Market Rank | #474 |
| Market Cap | $71,234,203.74 |
| 4.05%. | |
| circulating supply. | 96,945,320 |
Note The Beam statistics is update as at when writing.
CONCLUSION
Every participating party in a transaction, will always want to remain private, nobody likes his wallet to be seen by the public and this is where the mimblewimble protocol is redefining the blockchain technology protocol. It's very clear that the mimblewimble protocol offers users amazing features that other blockchain protocols don't have, its anonymous transaction features that was made possible by Confidential Transactions technics, the Coinjoin and the improved UTXO system ensures that you can't identify any specific user's transaction, this outstanding properties makes the mimblewimble protocol a more efficient scalability and privacy users.
With the combination of numerous cryptographic protocols which the mimblewimble protocol uses to achieve privacy and scalability transaction,
the mimblewimble protocol have now becomes a trending protocol, since many projects are implementing it in a bid to improve on there privacy and scalability issues, this goes a long way to stated that, the mimblewimble protocol will dominate in soon.
Moreover, to every good thing there is a bad thing, and to the mimblewimble, the criminal minded individuals could exploit this amazing features to commit crime because it's transactions are encrypted and anonymous. The protocol is seriously make a case for itself and in a short time it will dominate.
Thank you professor @fredquantum for this lecture