Privacy-Centric Cryptocurrency Beam Launches Successfully
The much-anticipated debut of Beam, the first cryptocurrency utilizing the Mimblewimble protocol, has been a resounding success, launching with significant hash power dedicated to its security from the outset. For those unfamiliar, Mimblewimble is a blockchain protocol introduced anonymously by an individual known as “Tom Elvis Jedusor”—the French version of Voldemort from the Harry Potter series. This protocol offers numerous enhancements over traditional blockchains, which we will explore.
Enhanced Fungibility
At the core of Mimblewimble’s advantages is its exceptional fungibility. This is achieved through a combination of confidential transactions and the CoinJoin method. Confidential transactions employ homomorphic encryption, a technique that permits computations on encrypted data while ensuring that, upon decryption, the results remain consistent with those derived from unencrypted data. This cryptographic approach, known as “Pedersen commitment,” enables the transaction amounts to remain concealed from outside observers while allowing miners to confirm that no double spending is taking place. Complementing this is the CoinJoin system developed by Greg Maxwell, which merges multiple transactions into a single operation, thus obscuring individual transaction details. As noted in the Mimblewimble whitepaper, this results in a convoluted transaction graph. Additional references are made to Nicolas van Saberhagen’s CryptoNote proposal and Shen Noether’s work on enhancing transaction obfuscation. Overall, the Mimblewimble protocol signifies a potential leap into a new era for privacy-focused cryptocurrencies, with Beam standing out among numerous lesser-quality Bitcoin derivatives.
Addressing Scalability Challenges
Few will contest that scalability remains one of the most significant hurdles faced by cryptocurrencies, often leading to major controversies and disappointments within the community. The crypto space has struggled to converge on a unified scaling strategy. However, the emergence of various competing solutions has been a silver lining. Alongside innovative second-layer solutions, block thinners, sharding, and other developer strategies to improve transaction processing, Mimblewimble presents a particularly promising approach. While the technical intricacies may be daunting for casual readers, the fundamental premise is straightforward—each “block” in a Mimblewimble blockchain constitutes a large CoinJoin transaction. This means that miners need not retain a full history of all transactions but can focus on the equivalent of Bitcoin’s unspent transaction output (UTXO) set. Traditional transaction signatures, addresses, and keys are eliminated, which theoretically simplifies the requirements for operating a Mimblewimble read-only node. However, comprehensive performance comparisons between Beam and conventional blockchains have yet to be conducted. Moreover, there is concern among miners that the extra processing needed for the privacy features may demand more resources than Bitcoin’s simpler verification methods.
Beam’s Successful Mainnet Launch
Beam’s mainnet launch has proven to be a triumph, with substantial hashing power being directed towards its security. Currently, the network has achieved a hashrate of 1.68 MSol/second, despite the limited options for miners to liquidate the currency. While altruistic mining efforts are common in enthusiastic communities, the robust beginning also indicates that miners possess confidence in Beam’s long-term viability, choosing to invest resources without needing to sell off crypto for operational expenses. This optimism is further bolstered by the use of Equihash as the mining algorithm, known for being friendly to both GPU and CPU mining, though speculation about the introduction of ASIC miners remains unverified. Nonetheless, the Beam team anticipates the eventual presence of ASIC miners, which would enhance security while allowing early adopters to mine with personal computers.
Competitive Landscape
By launching on January 3rd, Beam has established itself as the pioneering Mimblewimble coin, ahead of Grin, which is set to launch on January 15th. This timing grants Beam a significant marketing edge over Grin, which has garnered attention for its lack of a founders’ reward. The differences between Beam and Grin are numerous; Beam allows users to disable anonymity features for auditable transactions, is developed in different programming languages, and utilizes Radix-hash trees, among other distinctions. The most notable divergence, however, lies in their philosophical foundations: Grin is perceived as a purist, community-driven cryptocurrency with no pre-mining or taxes on mining, while Beam allocates 20% of mined coins during the first five years to a company for development, infrastructure, and adoption efforts. Although claims of Beam being a scam have been dismissed, its business model differs significantly from Grin’s, which may deter some users from mining. Ultimately, whether Beam’s advantages surpass its disadvantages remains to be seen. On a positive note, the founders’ reward structure has not hindered Dash’s success, which is often cited as a key factor in its sustained presence in the top 10 cryptocurrencies. Both Grin and Beam have their respective places in the market, and there are many reasons for early adopters to remain optimistic.
