THE PROBLEM

How much do you value your privacy?

The blockchain offers some form of anonymity via use of different wallet addresses but lets face it, those long addresses are already difficult enough to store. The last thing any company or business wants is to mix up addresses and lose payments. So most crypto-accepting businesses or users tend to use one static address to receive and send payments.

This however, allows any interested person to monitor and potentially trace back payments to/from you. Clearly this creates a privacy issue as business partners or customers may not want their transactions to be public.

The blockchain promised decentralization. For any currency to be decentralized, it must excel at privacy, be unrestricted and it must be fungible.

Privacy - Users should be able to select the privacy mode of their transactions, whether to be made public or private.
Fungibility - units of the currency should be easily interchangeable(meaning 1kg of block silver should equal 1kg of another form of silver whether coins or ingots).
Unrestricted - self explanatory.

In their current state, major cryptocurrencies like Ethereum and Bitcoin have been compromised on both fronts. The lack of scalability has affected their performances resulting in high resources expended on verification at nodes leading to high transfer fees(which could arguably be called a form of centralization as only the bigger miners can afford higher energy costs). These high costs also affect fungibility. Take for example the early days of Bitcoin. If user A had exactly 2 BTC in his Coinbase wallet and wanted to send it to user B, he could actually send the entire 2BTC. But now if you were to attempt such a transaction you would have to lose some Satoshi to transaction fees.
Meaning

Before A(2 BTC) - > - > - > B(2 BTC)

Now
A(2 BTC) - > - > - > B(1.998 BTC)

->->->->->->->-> Tx(0.002 BTC)

As you can see, the fungibility has been lost.

THE SOLUTION

Enter Beam, a slim-fitted version of Bitcoin. Let us quickly watch their introduction video

Simply put, Beam is a light-weight cryptocurrency (store of value) that offers true anonymity.

HOW DOES BEAM WORK?

Beam functions under a protocol called Mimblewimble. This makes it an improved version of Bitcoin. How?

• Mimblewimble strips transaction records of all bulky information such as transaction history, sender address, receiver address, etc.
• This stripping means Beam uses smaller blocks and thus saves up on massive space that Bitcoin's huge ledger takes up.
• This in turn means less work for the "verification nodes" to do and thus faster transactions.
• Less work means less energy costs needed to process the transactions.

Illustration of The Transaction Process in The Beam Network

UPGRADE FEATURES OF BEAM

The aim of Mimblewimble is to prevent the blockchain from revealing all the users information.
Mimblewimble is based on some of Bitcoin’s familiar privacy features. They include Confidential Transactions and Merging Transactions. Let us look at Beam's Mimblewimble in contrast to Bitcoins Algorithm.

Confidential Transactions

Originally a Bitcoin Core feature, this entails sending encrypting the transaction amounts with random data strings called "blinding factors" allowing only receivers to be able to decrypt the amount. By utilising Mimblewimble, the process is somewhat reversed with the receivers being the ones to generate the blinding factor effectively giving them total control over the coins as they alone can prove ownership of the (blinded) coins. Dummy outputs are also produced to mislead snooping eyes. This nullifies the need for private keys boosting security and privacy.

Merging Transactions (Transaction Cut-through)

Using a process called CoinJoin, Bitcoin Core allowed users to merge their transactions, or chain of transactions blocks into one single block scrambling all inputs(sends) and outputs (receives).
Mimblewimble makes this process even better by removing the entire transaction histories. The Mimblewimble block then broadcasted will contain only 3 vital lists

• list of new inputs(based on the original outputs)
• list of new outputs(dummy outputs)
• list of cryptographic signatures(created with dummy outputs)

The list of transactions(real and fake) all add up. This makes it difficult for unwanted parties to know which input sent how much to which output.

To avoid confusion and still prove that no new coins were magically created in the midst of all these real+fake records, the Peterson Commitment is used to verify balances.

The final "beamed" transaction will look something like this.

Original Transaction Trail

Agnes ==> Fred;
Fred ===> Steven;
Steven ==> Olly;
Olly ====> Candice.

Beam Transaction Record

Agnes ============> Candice

It is important to note that both of these concepts were proposed by Blockstream Developer Gregory Maxwell.

_{Read more about Mimblewimble CoinJoin modification here}

Scalability

When you spend a Bitcoin, the nodes must verify that you infact own that bitcoin. This means the node must go through the entire history of the Bitcoins dating back to the very first miner/holder! Each Bitcoin node must have the entire blockchain history in its record and that is just too bulky for quick validation.
Mimblewimble does not require coin transaction history. Mimblewimble simply notes when the coin was first created and registers it as part of the combined Unspent Transaction Output (UTXO) set, which refers to all outputs that store coins and could be spent at any time. Now when you wish to spend your coin, all Mimblewimble verifies is if the specified output used is valid. Using this method, almost the entire bulk of the blockchain can be discarded freeing up the nodes for speedy Beam transactions.

ADVANTAGES OF BEAM OVER OTHER CRYPTOCURRENCY

Beam is specifically designed to bolster user security and privacy. Its light weight design allows for speedy transactions. And it's Mimblewimble protocol allows it to be used as a bridge not only for peer-to-peer transactions but from Genesis sender to final recipient. In theory, Beam can even be used to transfer other currencies! Lets look at how Beam measures up to other major "secure" cryptocurrencies.

BULLET PROOF PROTOCOL

While Bitcoin promotes transparency by displaying all transactions on its public ledger, it also sometimes compromises privacy as any dedicated party can trace back transactions to you with enough time. Beam's bulletproof protocol allows users to hide transaction details from the public eye while steal preserving the true details of the transaction and other arbitrary computations. This can be described as a "zero knowledge proof" system.

Andrew Poelstra explains this concept better here.

USER CASE SCENARIO

Steven is a gem and antiques dealer who has decided to take his business online. He has many high-profile customers who simply don't have the time to travel to his shop to make cash payments despite the fact that they prefer not to leave a paper trail for security purposes. Rather than lose their patronage, Steven suggests Beam.
Using Beam, his clients can make payments for their desired items and shipping fees and business is conducted smoothly with all parties involved completely anonymized.

WHY BEAM IS BETTER

• Written from the ground up in C++ and open-source to allow faster development.
• Built-in anonymity
• Scalable platform
• Private ownership. Each UTXO has a secret key, and only the owner knows it.
• Privacy in transactions. All records are scrambled and encrypted.
• Spend Proof and overflow checks to avoid illegal inflation.
• Supports many transaction types such as escrow, time-locked, atomic swaps, etc.
• No trusted setup required
  
  
  

TEAM AND ROADMAP

The Beam team is made up of professionals from diverse fields including Blockchain development, R&D, Product Management, Marketing and Software development.

Beam Leadership Team

Beam Engineering Team

Beam Advisors

Beam has also entered partnerships with some reputable firms such as Lemniscarp, Node Capital and Yeomans Capital

Beam Partners



Beam has released a comprehensive roadmap. They just launched their testnet!

HOW TO GET BEAM

Beam isn't premined and there won't be an ICO. It is backed by a treasury. Blocks are mined using Equihash Proof-Of-Work algorithm(that relies on memory instead of processing power). Beam is being developed to be used as a store of value and not as a means of exchange. At launch BEAM will release a mobile and desktop wallet for Windows, Mac and Linux.

You can find the useful downloads (such as mining app) as well as testnet here

CONCLUSION

The Beam project is very appealing, however some details are still in theory and have yet to be realized. It will be interesting to see what script they use to replace the Bitcoin Script as they work to develop this privacy focused Blockchain. As of the time of writing this article, users still have to manually verify their transaction signatures to ensure that their (input-output) sums are correct and users may still run into some validation issues when downloading the blockchain due to the dummy outputs
All in all, this promises to be a solid replacement and improvement over Bitcoin and I'm looking forward to their next update.

To learn more about this project, you can visit their website or read the Mimblewimble here if you want the technical explanation. You can also quickly peruse their Position Paper for a simplified introduction.

The team is always willing to answer questions and you can reach them on any of their social media accounts.

Beam Forum | BitcoinTalk | Discord | Facebook | GitHub | Gitter | Medium | Reddit | Telegram | Twitter | YouTube

This is a submission for the @originalworks contest here

Unless otherwise stated, all images were derived from the website.

Tweet of post: https://twitter.com/U3uuu/status/1039123107422892034

DISCLAIMER: The information contained within this post shall not be taken as financial advice. I am not a financial advisor and none of your investing should be carried out based on any information presented here. You can lose all of your money by not investing wisely. The above information is for educational and entertainment purposes only. Endeavor to do your own research”

THANK YOU FOR READING


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