Crypto Academy Week 16 - Homework Post for [@levycore] Privacy Coins

Hello again Professor @levycore. This topic is completely new, in fact thanks to this class I have been able to understand Privacy Coin. Truly these assets come to fill a gap in the cryptocurrency world.

Let's start.

_{Image edited by me in Powerpoint.}

1. Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.

My selected Privacy Coin is BEAM.

BEAM is a cryptocurrency of value storage that is anonymous, this means that one of its main values is confidentiality. The information of all transactions and all users are stored in a private blockchain.

It is structured as a product of a non-profit company founded in Israel in 2019.

BEAM allows private transfers of assets under the P2P modality, transactions are private and the history is not stored publicly in blocks to be validated. In other words, there will be no public addresses in the system, it will only be two people who have direct contact, therefore, a completely confidential transaction.

The BEAM platform ^Source

_{Beam platform and logo screenshoot, edited by me and taken from: ^Source}

BEAM is within the DeFi sector and aims to solve two basic problems of Bitcoin: traceability and scalability.

The BEAM platform allows sending and receiving money privately and securely using the Mimblewimble protocol. Using this protocol allows the platform to execute transactions without displaying addresses, amounts, or other transaction details on the blockchain.

With fewer records in each block the entire blockchain benefits as it allows the system to make transactions more agile, faster, and more secure.

We are talking that the BEAM Platform is not only a pioneer in terms of privacy solutions but also in terms of Scalability, since this technology can be used for other blockchains to increase their number of TPS.

BEAM's platform is another factor to take into account since it is easy to use, very tidy, and intuitive, which as we will see allows the easy download of a wallet.

According to coinmarket cap ^Source BEAM coin has a value of 0.82USD and a Market Cap of 73 million dollars, still being a market with low capitalization.

However, from what I can observe in my analysis, it is an asset that had been gradually rising so far this year. BEAM is a crypto asset that has been gaining ground in relation to BTC.

This tells us about the soundness and seriousness of the project, one in which I would be willing to invest.

_{Beam/BTC chart, edited by me and taken from tradingview. ^Source}

Naturally, it suffered the fall that all cryptocurrencies suffered in this last month, however at a time when the cryptocurrency market (with Bitcoin as the main currency) has been falling, rather BEAM has been recovering. I think it is due to the fact that every day more and more users give importance to the privacy of their crypto assets.

Another factor in my analysis is functionality. BEAM is made to solve a real and concrete problem which is privacy. There are currently many people who distrust cryptocurrencies because they have made finance public.

A cryptocurrency that solves privacy issues will always have fans.

With the factor referring to the developer team I will not go into details in terms of names, since they do not stand out in terms of their fame. But it is true that it is a team of professionals who have run a coin without an ICO.

2. Describe the steps in creating a wallet for the Privacy Coin of your choice.

1-Due to the fact that the desktop version is not compatible with my computer, I will create my BEAM wallet from my cell phone app. For this, we go to the App Store and search for "Beam Wallet" ^Source. Click on install.

_{Image edited by me and taken from Beam Wallet app.^Source}

2- After the installation, we run it.

_{Image edited by me and taken from my cellphone}

3- From the start, we will see this screen with the option to create a new wallet. Click on the button. In the upper right corner, there is a language function; normally I would have selected Spanish (my native language) however for the purposes of this post I will set it to English by default.

_{Image edited by me and taken from Beam Wallet app.^Source}

4- We will be given a warning about the importance of protecting and safeguarding our seed phrase. If we have understood click on "I understand".

_{Image edited by me and taken from Beam Wallet app.^Source}

5- The next screen will not allow us to make captures, therefore we have to save the words of the seed phrase manually. At the end of this step, we must click on the "complete verification" button.

6- Then, the application will ask to confirm some words of the seed phrase. After completing the required fields click on next.

_{Image edited by me and taken from Beam Wallet app.^Source}

7- Create a password for the wallet. After confirming click on the "start using your wallet" button.

_{Image edited by me and taken from Beam Wallet app.^Source}

8- Some cellphones will allow you to access fingerprint validation.

_{Image edited by me and taken from Beam Wallet app.^Source}

9- Finally we have created our BEAM wallet, fully ready to start funding and performing private transactions.

_{Image edited by me and taken from Beam Wallet app.^Source}

This was the explanation to create the wallet on the cell phone. However, it can also be done on the PC.

1 Go to the BEAM platform https://beam.mw/. Click on the Beam wallet download button.

_{Image edited by me and taken from: ^Source}

2-Download options will appear for different operating systems and different types of wallets (desktop, CLI, Node). In my case, I select the Windows desktop option.

_{Image edited by me and taken from Beam wallet platfomr ^Source}

3- When doing this, the download of the application to the computer will start. We must select a location for the download of the application.

_{Image edited by me and taken from my PC.}

4-After some minutes the application will be in the place that we have selected. We execute it.

_{Image edited by me and taken from my PC.}

For the reasons that I said previously, I could not advance more of here. For that reason, I explained the operation with the cellular App. However, I suspect that the procedure should be the same. Install the program and then the same steps to create the wallet; seed phrase and password.

Remember that one of the most delicate parts of this procedure is to protect your seed phrase.

3. Explain the reason you chose the Privacy Coin.

The first reason for selecting it is the Mimblewimble protocol. This technology in my view is novel and will solve the scalability problems of many blockchains, especially Bitcoin.

Traditionally a blockchain block contains transaction information and hash information. This makes blocks heavy and slow to mine. On the other hand, by removing some of the information weight the result is that we have faster transactions. It also removes old transactions from the blockchain.

Mimblewimble reduces the amount of data needed to store and verify, allowing it to work with smaller blocks. This feature, which can be applicable to other areas, gives BEAM relevance, which is expected to increase its value in the not too distant future due to its scalability.

On the other hand, BEAM is a deflationary currency with a limited supply (253Million), which means that year after year its value will increase.

As I mentioned before BEAM was not born through an ICO. This speaks very well about the commitment of its developers. They decided to do the work and show the results first before asking for millions of dollars as an advance.

The BEAM team seems to be serious and transparent. In 2019, as it happens in all new projects a vulnerability and a flaw in the platform were registered.^Article

As a result of this, the team openly announced updates and vulnerability notifications, instead of hiding the case.

I could mention some other advantages of the BEAM Platform.

Advantages

1- The complete management of the information is in control of the users, within the limits of the law. In fact the users decide what information will be visible.

2- Users' addresses are not stored on the blockchain.

3- It is still decentralized.

4- The value of transactions is hidden.

5- The platform is easy to use, it is versatile. It accepts different transactions and cryptoasset exchanges.

6- By using Equihash algorithm, it is compatible to be mined by GPU.

On the other hand some disadvantages are.

Disadvantages

1- The main weakness, like any Privacy Coin, is the lack of traceability, which makes its platform a favorite for the development of illicit activities.

2- We have the unknown of the development of the project since they swim against the current in front of the rest of the regulators that seek traceability of all transactions.

3- There is no old transaction history since old blocks are eliminated to improve efficiency.

Conclusion

Privacy Coins are an option that walks a fine line. On the one hand, a primitive and fundamental characteristic of cryptocurrencies should be their traceability and transparency. However, every day there are more and more users who are betting on privacy in their operations.

This is the eternal debate of security vs privacy.

Even in the midst of the controversy, we cannot hide the fact that there are many users who are betting on this type of technology due to the inconvenience caused by their financial information being in the public domain.

No need to go far, within our Steemit platform, I know several users (close friends) who complain about the open wallet feature and would be willing to invest in a type of technology like BEAM and its platform.