BEAM powered by Mimblewimble Wants To Scale Private Transactions
Bitcoin has started a revolution by introducing the concept of cryptocurrency to the world. Its distributed ledger build on the blockchain has opened up new opportunities and avenues we had never even considered before and we're still only starting to figure out how to use this technology effectively.
While there are tons of applications for blockchain and cryptocurrency the primary focus is still very much on the storing and moving of monetary value from one person to another for the exchange of goods and services.
The biggest issues behind cryptocurrency adoption
So if Bitcoin is so great why has it struggled to break through to so many people? Make no mistake Bitcoin is an amazing innovation but not every person is happy with the open system it is built on. The code is freely available, the network is decentralised among thousands of miners, the blockchain explorer is open to anyone to track wallets and transactions all across the network. It is an open and transparent system with no place to hide.
This kind of transparency scares a lot of people who are still comfortable with the perceived privacy that centralised banking offers them.
Another key issue with Bitcoin and other cryptocurrencies is the scalability issue, as we saw with BTC when we hit the ATH or with ETH when crypto kitties flooded the network with transactions, cryptocurrencies aren't yet ready for massive worldwide transaction volumes, just yet!
These two fundamental roadblocks currently hold back adoption of cryptocurrency and are the two areas BEAM thinks it has the solution for.
BEAM us up
So what makes BEAM think they can do better than what is currently available on the market? Well in its tech, of course, BEAM's key selling point is the protocal it is built on called Mimblewimble.
Its origions are similiar to Bitcoin as it was released by an anonymous developer in 2016. Mimblewimble is named after a tongue-tying spell from the Harry Potter saga, Mimblewimble and uses the Pedersen Commitment scheme to create full anonymity and zero-knowledge range proofs to ensure the validity of transactions, transaction addresses or transaction amounts.
The BEAM team has taken this protocal and implemented it from scratch using C++ and as added a memory-hard Equihash Proof-of-Work algorithm to secure the network.
Now that you know more about the fancy tech how does it fair in the 2 categories it aims to compete in? Let's find out!
How does BEAM handle privacy?
BEAM allows for flexibility and choice on the network as it gives users control over which transaction information is shared, and to whom it is shared with prior to committing the transaction to the blockchain.
A BEAM users privacy options include:
- Concealing transaction values for the sake of privacy
- Concealing addresses of both the sender and receiver
So once they are happy with what is publicly available they can make a transaction and this can be changed per transaction as the user sees fit.
How does BEAM handle scalability?
To enhance privacy and reduce the blockchain size, Mimblewimble merges all intermediate outputs within a single block and across multiple blocks and only storing the current UTXO state.
This protocal makes the blockchain size an order of magnitude smaller than in other leading currencies. Which ensures a leaner blockchain with fewer transaction details per transaction and enabling faster confirmations and therefore very efficient scaling. The average block time for a BEAM network to be secured is 1 minute.
Use cases for BEAM
Lets for a second assume that I would like to pay peformance related bonuses to all my staff but I do not want others to know the reward structure. I would set up transactions via BEAM to pay the staff and all staff can see bonuses are paid on the blockchain, so they are all happy everyone received a bonus.
But they cannot see the value of each payment meaning I can reward the top performers more without upsetting the others. As far as everyone is concerned they got rewarded, we keep the top perfomers more motivated to stay and work for us and we keep overall morale up.
What I think of BEAM
I personally like the idea of exploring variations of how to improve blockchain scalability as BTC explores SegWit and Lightning network and ETH explores sharding, BEAM looks to offer a 3rd solution to the problem and in time we can evaluate which blockchain provides the superior solution to push adoption and the market forward.
Regarding the privacy aspect BEAM is by no means the first cryptocurrency to tackle this problem with Monero and ZCash staking their claim as privacy coins however these projects have been pretty quiet of late while Verge which had plenty to say on privacy has been a laughing stock with their terrible partnerships and having been hacked twice.
This clearly leaves the door open for a privacy-based coin to take over as the front-runner and push the privacy narrative to uses afraid of using cryptocurrency.
How BEAM compares to other cryptocurrencies
Get to know BEAM a lot better
If you found my review of BEAM interesting and would like to get a in-depth information about the project then check out the following resources:
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