In the world of crypto privacy news, more and more cryptocurrencies are beginning to take a vested interest in the Mimblewimble protocol.
The technology behind Mimlewimble is complex. So, let’s start by breaking down the fundamentals of the protocol before taking a look at why crypto projects are interested in it.
What is Mimblewimble?
Mimblewimble wants to drastically reduce the size of blockchains. To accomplish this, Mimblewimble aggregates all transactions in a block into a single transaction, with all the inputs and outputs mixed together.
In doing so, if a person were to view the block of transactions, they would only see inconsequential information. There is no insight to be gained into a single transaction.
Nodes can then verify the transactions without having to reveal any identifying information.
Part of the Mimblewimble protocol looks to conceal the original IP addresses from transactions that will be broadcast on a network.
Furthermore, Mimblewimble eliminates old and redundant transactions from the equation. This helps improve efficiency.
The protocol achieves this by aggregating intermediary transactions with each other, in turn removing the spent inputs. This process is known as ‘cut-through.’
Consequently, these features enable greater privacy since it becomes significantly difficult to track a single transaction when it is blended with many.
Another useful feature of Mimblewimble is that it allows for the entire chain state to be verified, even if a user doesn’t have the majority of the blockchain’s historical data.
Confidential Transactions (CTs) are another prominent feature of the Mimblewimble protocol. CTs allow for transactions to be encrypted without any effect on the input and output.
CTs are achieved through ‘blinding factors.’ The recipient of a transaction will choose a random set of blinding factors offered by the sender. The blinding factors are used to prove ownership. This in turn ensures the tokens can be spent at a later date.
Because of how the protocol functions, the need for a public address is voided with Mimblewimble.
The key points
Here are three key points to remember about the Mimblewimble protocol:
- Mimblewimble wants to answer the prevailing issue of scalability. Its answer is to reduce the size of blockchains.
- Mimblewimble also wants elevated levels of privacy. Blending transactions, removing intermediary information, and excluding addresses altogether is how the protocol aims to achieve this.
- Mimblewimble allows for an entire blockchain to be verified without needing access to its historical data.
Monero and scalability
It’s recently been reported that Monero is interested in Mimblewimble.
A tweet from lead developer Riccardo Spagni detailed how Monero “already is implementing a MimbleWimble sidechain,” known as ‘Tari.’
Tari has better transaction speeds and lower costs, but Monero still has superior privacy.
Another tweet in the same thread from Spagni details how users would utilise Tari for the greater transaction speeds and lower costs, but then “switch back to gain Monero’s greater privacy as needed.”
Another reason why Monero is looking into the Mimblewimble technology is scalability.
MoneroV is a planned fork scheduled to happen later in 2019.
The company’s roadmap states that “MoneroV plans to tackle scaling issues, which is the main source of problems in Monero, and in all cryptocurrency coins.”
Mimblewimble will assist MoneroV in its scaling endeavours by ensuring the blockchain size will be bound to the number of people using MoneroV. This is opposed to the number of transactions being made in the network.
In turn, MoneroV transaction costs will also be reduced along with the size of the blockchain.
Litecoin and privacy
Litecoin creator Charlie Lee has also recently announced that the company is looking into the Mimblewimble technology.
Litecoin has also been looking at implementing CTs. Naturally, this suggests that Litecoin is looking towards improving privacy, rather than scalability.
After all, Charlie Lee has stated, “now that the scaling debate is behind us, the next battleground will be on fungibility and privacy.”
According to Lee, the Litecoin developer team has been discussing how to add CTs, Bulletproofs, and Mimblewimble.
Why Mimblewimble?
Mimblewimble can be used as a type of sidechain or extension block rather than the primary component of a network. If cryptocurrencies such as Litecoin and Monero adopt the technology, it enables them to incorporate Mimblewimble’s key features.
This in turn grants either increased privacy or scalability. Both of which are prominent issues in the crypto community, and Mimblewimble might just be the answer.
Mimblewimble is also a key component of two cryptocurrencies called Grin and Beam, which have both been front runners in the implementation and utilisation of the technology. You can find out more about Grin and Beam and their relationship with Mimblewimble here.
Interested in learning more about Mimblewimble? Discover more with our introduction to Mimblewimble and our expert insight into the protocol.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.