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MimbleWimble: Harry Potters’s famous tongue-tying curse is not just a spell, it’s also a Blockchain protocol that has garnered a lot of attention because of its name. Let’s understand this protocol in detail.
In 2018, when the Crypto industry was facing a downturn, Mimblewimble and its first Crypto application, Grin, were launched, which caused excitement in the Blockchain industry. Grin’s value surged soon after its launch in late 2018, making it one of the few innovations that created such a buzz during the Crypto winter.
Mimblewimble, named after the Harry Potter spell, brought new possibilities for Crypto anonymity and scalability. However, despite the advantages it offers, the industry has been unable to agree on the best way to use the protocol. This lack of clarity has caused confusion and raised doubts about its potential.
The utilization of Mimblewimble has been debated by experts, with some believing that it is too complicated to merge with the Bitcoin protocol. However, many agree that Mimblewimble could improve Bitcoin’s system as a sidechain. There are various popular implementations of Mimblewimble present in the Crypto space, such as Grin and Beam. Additionally, in October 2020, Litecoin launched a Mimblewimble testnet to improve its privacy and scaling capabilities.
Mimblewimble is a Blockchain protocol that allows for anonymous Crypto transactions. Its name has been taken from a tongue-tying spell from the famous Harry Potter series. By minimizing block space and keeping transactions and addresses confidential, it creates opaque yet verifiable transactions. The protocol uses Confidential Transactions (CTs) and One-Way Aggregate Signatures (OWAS) to improve privacy and scalability compared to protocols like Bitcoin. CTs enable users to hide the transaction amounts so that only the sender and receiver know how much has been sent.
Mimblewimble was initially proposed as a sidechain or “soft fork” for Bitcoin, and it currently acts as a base for other Cryptos which have built their own Blockchains, like Grin, Beam, and MimbleWimbleCoin (MWC).
With Mimblewimble, transactions can be signed and validated without needing to verify each past transaction individually or include its inputs into a new transaction’s hash. This significantly shrinks the size of its Blockchain as a whole.
Is it as easy as simply waving the wand and uttering a spell? Or is it quite complicated? Let’s find out.
How does MimbleWimble work?
The Mimblewimble network has the potential to revolutionize the current Blockchain transaction model. One of the network’s key features is its ability to enable a compact history to be downloaded, synchronized, and verified. Implementing Mimblewimble in Cryptos is based on Bitcoin’s Unspent Transaction Output (UTXO) model, which does not encrypt such information. Transactions in UTXO are assigned to an address, and a private key from the originating wallet must be used to process a transaction.
Mimblewimble ensures confidentiality for all transactions. Transaction values are encrypted using “blind factors” created by combining the private and public keys of the transaction partners. A transaction is valid if all output values minus all input values equal zero. Additionally, transactions from two blocks can be combined into one block without losing their validity.
Mimblewimble uses a technology called ‘Pedersen Commitment’ to allow full nodes to subtract encrypted amounts on the sender side from those on the recipient side. This enables miners to confirm the legitimacy of transactions. Validators, on the other hand, ensure that the rules are followed and that the number of coins in circulation is correct.
Key features of MimbleWimble
The privacy feature of MimbleWimble is one of its major advantages. While Bitcoin broadcasts all transaction details to everyone on the network, MimbleWimble keeps all transaction details hidden except for the amount transferred. This makes it difficult for attackers to track individual users’ transactions.
Additionally, MimbleWimble enhances security by adding a new layer of Cryptography known as blinding. It stops attackers from seeing the actual addresses of senders and receivers, ultimately making it difficult for them to steal funds.
- Transaction privacy: MimbleWimble ensures transaction privacy by keeping transactions confidential, making linking transactions to individual users challenging.
- Scalability: MimbleWimble’s high transaction processing capacity improves scalability, making it suitable for mainstream use.
- Censorship resistance: MimbleWimble’s cryptographic verification and recording of all transactions on the Blockchain make it resistant to censorship.
- Decentralized storage: MimbleWimble’s decentralized storage capability enables data storage on the Blockchain without adding network congestion.
- Reduced Blockchain size: MimbleWimble’s unique design leads to a smaller Blockchain size, making it more efficient and cost-effective to store and transmit.
- Easy to use: MimbleWimble’s user-friendly design makes it accessible to people unfamiliar with Blockchain technology.
- Fast verification: MimbleWimble’s quick transaction verification and confirmation result in fast transaction completion.
- Security: MimbleWimble is a secure protocol that has undergone thorough testing and has a proven track record over time.
Drawbacks of MimbleWimble
With such revolutionary projects, there are some attached drawbacks. Let’s check them out:
- Longer transaction throughput
Due to their larger data sizes, systems that offer confidential transaction implementations suffer from slower transaction speeds.
- Leverages digital signatures
Mimblewimble is susceptible to attacks that are carried out using quantum computers since it depends on digital signatures.
Let’s see how MimbleWimble is different from Bitcoin in the following section.
MimbleWimble Vs. Bitcoin
Mimblewimble and Bitcoin have differences in terms of their transaction privacy. While Bitcoin transactions are public and can be verified through BTC explorers, Mimblewimble encrypts all values homomorphically with blind factors, providing users with private transactions.
Another significant difference is in the size of their Blockchains relative to the cut-through function. Mimblewimble’s Blockchain only contains the necessary information, making it smaller and requiring fewer computing resources than Bitcoin’s and other PoW Blockchains.
Lastly, Mimblewimble’s cores have updatable transaction summaries, which differs from Bitcoin’s mechanism of storing and verifying every signature of a transaction, starting with the genesis block, on each node.
Bottomline thoughts: The future of MimbleWimble
MimbleWimble is a big step when it comes to the protection of anonymity and privacy, which the majority of previous Cryptos may have been designed for. The Mimblewimble protocol model can be considerably simpler for everyone to adopt than a number of other Blockchain systems because it does not suffer from traceability and a complicated validation process.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.