Greater than Bitcoins? Myths around Mimblewimble and Grin Unlocked
Mimblewimble provides true anonymity
All money systems, from gold and cash, to cryptocurrencies, have to fulfill two requirements during transactions:
1. the amount received is equal to the amount sent;
2. the transaction is made from the actual sender’s account/address.
Bitcoin meets these requirements by disclosing three essential information involved in transactions in its system, namely, the sender’s address, the amount of coins sent and the receiver’s address. The Bitcoin system is absolutely transparent, but this means little privacy exists in this system. Mimblewimble, in comparison, prompts true anonymity by obfuscating transaction inputs and outputs, as well as eliminating public addresses. How does it achieve that?
Mimblewimble transaction is a derivation of confidential transactions, which allow senders to encrypt the amount of bitcoins they want to send using Blinding Factors. Senders can choose a random Blinding Factor that suitably encrypts the bitcoin amounts without affecting the input and output of a transaction. In a confidential transaction, only the sending and the receiving parties apprehend the amount of the transaction. The onlookers don’t know the exact transaction amount, whereas they can still validate the transaction by matching outputs with inputs — the numbers should be the same. As a result, confidential transactions preserve the integrity of the system and ensure no bitcoin is created out of nowhere.
What is a bit different for Mimblewimble is that , they require the recipient to select a range of Blinding Factors provided by the sender. The recipient can then use this blinding factor as a his proof of ownership and permission to spend the Bitcoins.
Mimblewimble achieves higher scalability
In addition, Mimblewimble transactions leverage CoinJoin, another piece of cryptographic innovation that join several payments into one transaction. It works as combining multiple payments from different senders into a single transaction and paying to different receivers. Therefore, it is hard for external parties to identify the relationship and details among different payments. CoinJoin has also significantly saved the block space by only requiring the storage of inputs, outputs and signature data without losing the relevancy of a blockchain — one can easily verify the transaction by subtracting the total inputs from the total outputs, and ensuring that the result is zero. To the contrary, Bitcoin transactions’ validity is checked by the whole blockchain and transaction history.
At this stage of my explanation, you can already understand how Mimblewimble improves scalability and privacy. First, they provide higher scalability because less transaction data is carried, and therefore more transactions can be included in a single block. Second, they enhance privacy protection through the elimination of public addresses and obfuscation of inputs and outputs. True anonymity, as opposed to pseudonymity, is achieved.
Is Mimblewimble greater?
Mimblewimble gets rid of traditional private and public keys/addresses by combining the merits of confidential transactions and CoinJoin. It also replaces the traditional signature per transaction with blinding factors proving ownership of the coins.
Mimblewimble miners combine individual transactions into one big “CT and CoinJoin” transaction. This is something really innovative in the current blockchains we know of, which I think it can be the magic for great things to happen. And when more and more transactions and users get involved in this system, it will make it harder and hard to tell the real relationship between the senders and receivers. Let’s stay tuned for the magic to make a change and provide real anonymity and privacy to their transactions.
While other projects may often compromise between privacy and scalability, this is not the case for Mimblewimble. What the protocol really amazes me is that old and new transaction data can be cancelled out against each other, which means new nodes don’t need to sync to the whole transaction history like a typical blockchain. This has effectively lighten the whole blockchain system.
Is Mimblewimble greater than Bitcoin? I don’t have a definite answer but it does uplift the level in terms of privacy and scalability. Let’s give it more time for this magic to produce some great outcome.