Mimblewimble: The Tech to Boost Crypto Privacy
At the entrance to the crypto world, everyone can see a “signboard” informing about coming to a highly anonymous and private place. But is it actually so? The one fact that is really indisputable is a decentralized nature of cryptocurrencies. It means that to confirm a transaction users don’t need a third party: they do this on their own. Still, transparency, positioned as blockchain’s main boon, gives rise to some issues. The lack of privacy often pushes away those users who don’t want their financial matters be available for a broad public.
Bitcoin, a so-called “King of all cryptocurrencies”, failed to provide privacy in transactions. And many users who believed crypto was private because it didn’t disclose names, were surprised. Bitcoin blabs the following personal data:
– Sender’s address;
– Amount of coins sent;
– Recipient’s address.
Mimblewimble’s promises of real crypto privacy
A revolutionary technology Mimblewimble has broken into the crypto market as an attempt to bring a higher degree of privacy. To be precise, this is a tech that prevents blockchains from disclosing personal information. It is called after a Harry Potter spell which he used to stop people from telling out the secrets.
A newly-introduced technology, first of all, aims to reduce the size of blockchains. To do this, Mimblewimble combines all transactions in a block in a single transaction. So, there’s no possibility to gain an insight into a single transaction. As a result, nodes can verify transactions without disclosing any personal data.
The Mimblewimble protocol hides the original IP addresses from transactions to be transferred on a network. During so-called “cut-through” process, the protocol aggregates intermediary transactions with each other. As a result, a greater privacy is gained because it is difficult to track a transaction blended with many.
One of the main features of Mimblewimble is, it supports Confidential Transactions. In turn, in a “standard” Bitcoin transaction, everything is public. CTs are achieved via “blinding factors” used to prove ownership.
In January 2019, two privacy coins, Grin and Beam, were launched. The event caused great excitement in the crypto world. To raise confidentiality, Grin and Beam use Mimblewimble’s Confidential Transactions and Dandelion scheme. Using the scheme all transactions are made in two phases: anonymity phase or Stem and distribution phase or Fluff.
Grin launch allows to aggregate and cut-through transactions before their distribution during Fluff phase. This approach greatly facilitates to privacy levels increase. Beam also contains “fictitious” transactions added during Stem phase to compensate the situations when real transactions are unavailable. In addition, Beam gives the opportunity to audit transactions without disclosing data to a broad public.
Two projects look very promising. But, will they finally turn out to be successful? And will they take leading positions among privacy-oriented coins? Elegro will follow their development story with great interest.
Mimblewimble gains great adoption
Currently, more and more cryptocurrencies show an increased interest in Mimblewimble. The tech is an advantageous proposal for a bitcoin-like blockchain that could be implemented as a sidechain.
Thus, Litecoin has just informed about the possibility to integrate the tech. The company as well noted that it was more interested in improving Litecoin privacy, not the scalability. Currently, Litecoin is discussing the ways to add CTs and Mimblewimble.
It seems the news about Mimblewimble implementation has jacked up the Litecoin price. Over last Saturday only the coin’s price increased by 27% and was equal to $45. According to the prognosis, Litecoin can reach $50 soon. Mimblewimble does magic increasing demands for the coin.
The conclusion is clear: crypto privacy matters. But, let some time pass to see whether Mimblewimble will be able to provide what Bitcoin has missed.
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