Mimblewimble Protocol-Crypto Academy / S4W2 - Homework Post for [@fredquantum]||
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Introduction
Greetings to everyone here.Welcome to another week in the Cryptoacademy classes and homework series.I appreciate professor @fredquantum for the class.
In detail, explain your understanding of the Mimblewimble protocol
Permit me to start with this example.There are three persons (A,B and C) in a WhatsApp group.A and B are the admins of the group while C is just a member.If the group is set such that Only Admins can send message.It means that A,B and C can see all messages,but sending messages is only restricted to A and B (Admins/insiders) while C is seen as an outsider..This means that there is a privacy setting on who can send messages on the group.
This illustration is likened to the Mimblewimble protocol where everyone can verify the transaction but only the insiders can view the transaction records such as transaction amount and transaction history.
Mimblewimble protocol is a protocol named after a spell used in Harry Potter to stop people from revealing secrets.In the Mimblewimble protocol the transaction are stored in a very anonymous and scalable format such that only the two parties involved in the transaction(insiders) can see the transaction details like public address and amount sent/recieved are not made public,this makes it impossible for another node(an outsider) to see the transaction history.However,every node can verify the transaction but cannot view the history.This is privacy and anonymity at its best.Apart from making the transaction data to be anonymous, Mimblewimble protocol makes the transaction faster because the block size is reduced thuss increasing the number of transaction per second(scalability).
To explain further,in the bitcoin network the transaction amount,senders address and recievers address must be seen before the transaction can be verified,this means that anyone can trace the transaction history,there is little or no privacy but the Mimblewimble protocol offers a solution to this privacy issue.
It makes it in a way that the data stored can easily be downloaded and verified by everyone but the transaction details are hidden and is only seen by the parties involved in the transaction.
For example user A sends BTC to user B and user B sends it to user C.The transaction details between A and B cannot be seen by C because user C is seen as an outsider in the transaction between A and C.
So we can see that Mimblewimble protocol offers two keys features which are:
•Anonymity:Hiding of transaction details from outsiders such that only the two parties involved the transaction can see it.
•Improved Scalability:It increases the number of transactions completed in one second thereby making the transactions faster.This is achieved by removing redundant transactions to make the block size smaller.
How Mimblewimble Protocol Achieves Increased Scability
Like I mentioned earlier,one of the problems of bitcoin network is low scalability (less transaction speed). Mimblewimble protocol has a solution to this problem.
High transaction speed (high scalability) is achieved in the Mimblewimble protocol by using a technology called cut-through technology where some irrelevant transaction info are removed and the block size is reduced thus making transaction faster.Furthermore,the Mimblewimble protocol uses an aggregation of input and output to save space on the blocks.
For example I sent 0.5 BTC to my friend,there would be 1 output and 1 input....then my friend sends the 0.5 BTC to another user person,there would be another 1output and 1input.In total the whole transaction has 2 outputs and 2 inputs. Through the cut-through technology,the whole transaction is aggregated into just 1 output and 1 input,thereby saving space on the block and so nodes do not need to look for previous transactions before verifying new ones.
Let me Explore
•Visit Mimblewimble block explorer
•I selected block 946824
I noticed that the transaction details here hidden.
Let me try the blockchain explorer
•I selected block 700378
I noticed that all the transaction details are open to be seen.
Discuss in detail how the Mimblewimble blockchain protocol works
The working principle of the Mimblewimble protocol centers on creating anonymity and increasing scalability.
It is worthy to note that the Mimblewimble protocol does have an identifiable address which implies that the transaction data are encrypted in a way that it appears like a random data to any node that is not involved in the transaction (outsider).The transaction can also be seen and interpreted by the parties involved in the transaction.Furthermore,blocks can be downloaded and verified by any node but there is no way for that details for every single transaction will be made accessible to all.
Let me use this example to explain what I mean:Andrew recieves 4 BTC from granny and also received 5 BTC from Dad.This means that Andrew now has 9 BTC.Now Andrew sends the 9 BTC to Juliana.The whole transaction can easily be downloaded and verified.However,Juliana cannot trace how Andrew got the 9 BTC.
The whole transaction input-output will appear as a single entity and recorded on the Mimblewimble blockchain while redundant transactions are eliminated.This is a high level of privacy because Juliana is an outsider to the first part of the transaction and so cannot view it or trace it.This process where by the whole transaction appears as a single input-output and the block size is reduced is made possible by a technology called cut-through.
In short,the working principle of Mimblewimble protocol invloves the reduction of the block size through eliminating redundant transactions,making the transactions to appear as a single input-output (with the aid of cut-through technology)and hiding the transaction amount through a concept called Confidential Transaction(CTs).
Discuss in detail your understanding of Confidential Transactions (CTs)
I mentioned Confidential Transctions(CTs) in the last paragraph.It is one of ways that transactions are made to be private and anonymous in the Mimblewimble protocol.
Confidential Transaction is a process by which a sender encrypts(conceal) the amount of say BTC that he wants to send to a reciever with the aid of a blinding factor.For clarify purposes,a blinding factor is a random value that the sender assigns to the assets he wants to send so that the amount would be made secret.The sender will only make the binding factor available to the reciever and so the reciever can use it as a proof of ownership.The transaction is then verified when the binding factor provided by the reciever corresponds with that of the sender.
Inorder to ensure that the hidden day is correct,the Mimblewimble protocol makes use of the Pedersen Commitment.
The nodes verifying the transaction will see that the input and output are the same,but they can't see the transaction amount.
So we can say that Confidential Transaction is a means of hiding the transaction amount in a transaction such that only the parties involved will know it.However, every other nodes can download and verify the transaction but cannot see the transaction amount.This is high level of privacy-a factor that is lacking in bitcoin network.
How do you think Mimblewimble Protocol can be utilized on the Bitcoin Network to enable anonymity of transactions and improve scalability?
The two major problems confronting Bitcoin network is low scalability and anonymity of transactions.Segregated Witness (SegWit) and Lightening Network have all been employed to solve the scalability problem of bitcoin network,but they have not yieded the desired result.With the presence of Mimblewimble protocol,this two problems could be solved or ameliorated.How will it happen?
•Improved Scalability
One of the ways that Mimblewimble protocol can be utilized in the bitcoin network is by using it to reduce the block size thus making way for faster transactions..The amount data on the bitcoin block and its size is responsible for the slow transaction speed in bitcoin network.The solution is that Mimblewimble protocol has a technology called the cut-through technology-which reduces the block size by removing redundant transactions and making the whole transactions to appear as a single input-output entity.With this technology, Mimblewimble would be utilized in making a faster transactions on the bitcoin network.
•Anonymity of Transactions
Another way that the Mimblewimble protocol can be utilized in Bitcoin network is in providing top-notch privacy.The Mimblewimble protocol has a privacy feature called Confidential Transaction which makes the amount of money sent to be concealed and can only be seen by the reciever.Once the input and output corresponds,the transaction is verified without the other nodes(outsiders) seeing the transaction amount.This feature of privacy and anonymity of the transaction amount would be of great utility in the bitcoin network such that transactions details could be made anonymous in the bitcoin network.
State the Pros and Cons of the Mimblewimble protocol
Pros of Mimblewimble protocol
•Improved Scalability
Scalability is the number of transactions that a blockchain can handle in one second.Mimblewimble protocol has a well of eliminating redundant transactions thus making the block size to be smaller which in turn increases it scalability.
•Privacy
Mimblewimble protocol comes with a high level of privacy because the transactions details like transaction amount and public keys are not made available to the public.The presence of Confidential Transaction makes it possible for the transaction amount to be encrypted and can only be seen by the parties involved in the transaction.
•Reduced Block size
The block size in the Mimblewimble protocol is very reduced because the data is compressed and irrelevant details are removed.This makes for reduced transaction cost,faster transactions and reduces the plenty of computational power in Proof-of-Work.
Cons of Mimblewimble protocol
•Low Transaction Through-Put
Transaction Through-put is the number of transactions that a network can handle at a given timeframe or at a time.The privacy of the Mimblewimble protocol which was initiated by the Confidential Transactions feature reduces the Transaction Through-put of the protocol,thus making it a bit slow.
•Susceptible to Attacks
It is obvious that the Mimblewimble protocol relies on digital signatures.This makes it to be susceptible to attacks can are executed through quantum computers.
Discuss in detail at least a Crypto that uses the Mimblewimble protocol
GRIN Crypto
A coin that runs on the Mimblewimble protocol
Grin launched in 2019 with its mining starting the same year is an example of a crypto that uses the Mimblewimble protocol.Grin is a privacy coin built by developers distributed over the globe.The transaction amount and are made hidden to the public,they are only visit le to the sender and the reciever.It is not controlled by anybody,group or third party and it has am emissions of 1 Grin per second.The pasr transaction are removed so that it chain wont be overloaded and the security remains untampered.Other details about Grin are:
Governance=Community Funding Model
Mining=Equihash
Coding=Rust
I went to Coinmarketcap.com to see some details about Grin coin.
| Parameters | Result |
|---|---|
| Name | Grin |
| Rank | 682 |
| Price | $0.3178 |
| Market Cap | $26,577,955 |
| Volume(24-hr) | $2,463,055 |
| Supply | 83,625,720 Grin |
Features of Grin Crypto
•Transaction history- which means the sender,reciever and amount are not recorded on the blockchain.
•Since there are no addresses,both the sender and reciever communicates with each other and the result is broadcasted to the network.
•Data size is small making the blockchain to be light weight because a lot of information aren't left the block.
•It is an open source project that runs on the Mimblewimble blockchain.
•Its consensus algorithm is Cuckoo Cycle proof-of-work based.
Beam Crypto
Beam is another crypto that uses the Mimblewimble protocol.It was launched in 2018.Interestingly,Beam users can decide to make their transactions private or they can decide to enable transaction tracking.A block is mined every minute and returned to the now for verification and distribution.
| Parameter | Result |
|---|---|
| Name | Beam |
| Rank | 472 |
| Price | $0.6675 |
| Market Cap | $64,604,237 |
| Volume(24-hr) | $13,615,073 |
| Supply | 96,781,760 Beam |
Conclusion
Mimblewimble protocol is a way of encrypting transaction details such that only parties involved can see it.It is more scalable and offer anonymity to the users.If it integrated to the Bitcoin network,it would make a lot of sense.Some Cryptos that run on the Mimblewimble protocol are Grin,Beam etc.