If you have interacted with the crypto market in the past, then the chances are that you were able to interact with a lot of cryptocurrencies. Some are high-tier ones, such as Bitcoin, Ether, and XRP, and some other altcoins that are relatively new and still thriving. Every cryptocurrency out there uses a different consensus algorithm to reach a consensus when validating a particular transaction and for the sake of communicating these changes with the rest of the validating nodes as well.
Whenever a request to validate a transaction occurs, the request is made live within the blockchain itself among the validating nodes present there. Whoever jumps up to receive this request and imparts their processing power for the sake of validating the transaction gets the reward only after the transaction has been validated and a record of it has been subjected to a definitive block over the blockchain system.
The way blocks are created over a blockchain environment for the sake of storing the transactions and categorizing them is different for different blockchains. Mimblewimble is an incredible industry-based blockchain design that allows an extremely efficient structure for storing transactions into the definitive blocks, which you can use for the sake of adjusting how blocks are created and how these are structured on your own blockchain system. Now it is not the same as a proof of work blockchain, which emphasizes on privacy and scalability of the network it uses.
Introduction to Mimblewimble
The overall design for Mimblewimble was enabled in 2016 by Tom Elvis Je Angiedus. He was able to propose some pretty great ideas about the Mimblewimble document, but there were many questions that were still unanswered. Therefore many researchers took part in this endeavor to kind of improve the original concept over the years but later on, a paper about Mimblewimble was written and published, which proposed the ground infrastructure for the development of Mimblewimble itself.
Since then, many researchers and developers have been consistently studying this very protocol; according to some, it might be extremely difficult to apply this protocol to Bitcoin, but it might be technically possible. Being a sidechain solution, according to many researchers, Mimblewimble would be able to improve the Bitcoin network eccentrically by increasing scalability and improving performance on multiple ends.
Working Mechanism of Mimblewimble
Now that you are tempted to know that there is an entity out there that you can use for the sake of changing the overall capacity in which transactions are validated and subjected to blocks, it is only natural that you would want to find more about it and it’s working.
With Mimblewimble, the traditional aspects of blockchain technology and transactions have been changed. You can customize your blockchain to have a more recent characterization of transactions and the history or order in which they take place. It makes stuff easier for you to find out regarding transactions, and you can even export all the pertaining history in the form of a CSV file which is easier to download and verify should the need to do so arise.
When it comes to the Mimblewimble blockchain, the addresses are completely different from the traditional blockchain environment; all of these are not identifiable and neither reusable, which means that when an address has served its purpose of updating a transaction and subjecting it to a definitive block, it can’t be used again which boosts the scalability of the network.
Another benefit of this deal is that all the transactions that took place or take place on this respective blockchain would look like a random piece of data to an outsider, and they could not be able to make much sense of what is present before them. Only the participants of the blockchain or authorized users would be able to access the transaction data and observe it in full capacity.
It is safe to say that a block developed by Mimblewimble blockchain would look like a large transaction entity other than being a combination of multiple such blocks combined in a linear fashion. It makes evaluation of these blocks extremely easier, along with the fact that these can be confirmed too without having to give any information about the pertaining block or any section of the transaction to an outsider whatsoever.
There is no way to disclose the data that a particular block or the transaction that this specific block is holding because there is no way to do so. Suppose you are receiving funds from various places in chunks securing five points from one vendor and 10 points from the other one, and now you have to make a payment to a third party which is all 15 coins.
When you do so with the help of the Mimblewimble blockchain, the third party involved would only be able to know that you have sent them 15 coins having no clue if the respective party or individual did send you these coins earlier. This is specifically important in the business world, where secrecy is everything.
Another important feature of Mimblewimble is cut-through which is a kind of transaction data removal. Don’t worry; it is not going to move important bits but will cut out the data that is redundant and don’t play a wider role in confirming or validating that specific transaction. It is extremely important that the stress on the blockchain is reduced periodically because if mounts and mounts of data are subjected into the blocks, then soon enough, the server space is going to run out.
The blockchain won’t record each and every input and output; other than that, it would be recording only one input and output pair, which means that most of the participants of a long-lasting transaction would be cast out for good. This removes the fluff and misleading information and makes tracking personnel involved in a particular transaction easier and more efficient.
The confidential transaction is a concept that is well received by Mimblewimble blockchain, and it practices it pretty neatly. This specific tool is implemented here to make sure that the original amount for the particular transaction is redacted, which means that it won’t be made available for anyone to view or comment on.
Comparison Between Bitcoin and Mimblewimble
The very purpose of a blockchain entity is to secure data from the very beginning to the end; it is something that makes people trust blockchain technology and, moreover, push their hard-earned money into circulation over a supported blockchain environment.
When it comes to the Bitcoin blockchain, it has maintained and secured every ounce of data since the very first transaction dating all the way back to the genesis block. Anyone who has any doubt pretending to a particular transaction or any other interaction with the Bitcoin blockchain is welcome to download the entire history of bitcoin’s blockchain to verify data bit by bit or by transaction by transaction.
As compared to the Mimblewimble blockchain, it only encompasses data that is really necessary and essential to a dedicated transaction; this way, the overall level of privacy increases, which also means that forensics, unfortunately, can’t be performed on a certain transaction to disclose all the participants who took part in that particular transaction. The validators of the Bitcoin blockchain make sure that no unusual activity is taking place, such as a double-spend attack or something like that, which can render the entire blockchain network completely useless.
Mimblewimble blockchain, on the other hand, also caters to this specific element while making sure that all the crypto coins and their number within the circulation are accurate right to the very dot. Another possible difference between Mimblewimble and Bitcoin is that Mimblewimble completely removes the entire scripting system for the Bitcoin blockchain, which corresponds to it a system put into place to guide the Bitcoin blockchain when it comes to structuring transactions and recording them into definitive blocks.
Without this script present within the blockchain, there is potentially no way that said blockchain remains effective as a Bitcoin blockchain at all. This way, the entire blockchain becomes more private and efficient in terms of storing data, and only relevant information pertaining to each and every transaction is stored, as is the very feature of the Mimblewimble blockchain. This makes the entire blockchain extremely private because of the fact that any and all addresses involved in a dedicated transaction could not be traced and hence adding much more scalability for the overall blockchain because the data volume has been reduced considerably.
Another difference that emerged between bitcoin’s blockchain and Mimblewimble is the fact that both have very different data sizes for their respective blockchains.
But the data size of bitcoin’s blockchain is relatively larger and far-fetched as compared to Mimblewimble, which has a decent and pretty tentative data size because of taking away multiple key information from the data itself and only succumbing to those data parts that are strongly necessary for validating of the transactions.
This has a direct effect on the resources which each blockchain system employs; due to the smaller data size, Mimblewimble blockchain can sustain a much more efficient blockchain environment because it requires less computational power as compared to bitcoin’s blockchain, which often leads to slow transactions, lengthy validation time and more transaction fee involved to get your transaction validated at a faster pace.
Advantages of Mimblewimble Blockchain
- Size of the Blockchain
The first and foremost benefit of employing Mimblewimble blockchain for the sake of customizing on blockchain environment is data compression. It helps you to reduce the overall size of your blockchain, thus making it much more efficient and scalable in real-time; this also means that your definitive blockchain would run much faster and would be using less computational resources as compared to when it was not customized with Mimblewimble blockchain.
The verification of transaction history would become much faster and more efficient as the data is compressed into a much more reduced frame which allows for faster validation. It also becomes easier for new nodes out there to be able to synchronize and download data at a much faster pace
You would be able to develop a much more distributed community with the help of the Mimblewimble blockchain because the overall cost to run a potential node has been decreased, which allows for multiple opportunities to be present within the blockchain environment leading to diversity and inclusion of multiple communities from around the world.
Not only this, but the overall cost to join the network would also decrease, leading to much more admirable and competitive transaction rates as compared to other competitors. The centralization of your network would also take a strong beating because your blockchain format uses less computational power and is available for instant scalability whenever the need to do so arises.
- Enhanced Scalability
Presently a lot of research is being commenced to make sure that the Mimblewimble network is compatible with other blockchain environments out there, and once a valid proof of that is found in a successful run of the Mimblewimble network as a sidechain it will be promptly available as a solution that the presently active or newly crafted blockchains will be able to use.
This means that in the future, Mimblewimble could be able to tether itself with the Bitcoin network or some other parent chain out there, increasing the scalability of the blockchain in question. This will eventually increase the performance of transaction validation, creation of new blocks on the lightning network, enhancing the performance of payment channels involved, etc.
With the help of the Mimblewimble network, you would get immaculate privacy right then and there, which enhances the overall use case of the network while keeping your personal and financial data secure and away from the eyes of the culprits. With the implementation of the Mimblewimble blockchain, you are consenting to the removal of Bitcoin scripting systems and the combination of Mimblewimble technology with the use of confidential transactions, thus boosting the overall privacy-oriented profile of the network and completely redacting each and every detail of the transaction.
Some hackers and manipulators try their level best to gain access to even the most lacking detail of a dedicated transaction, and for them, it is enough to bypass the security of the blockchain network, although it is pretty complicated to do so if they get through vital hands-on information for a dedicated transaction they can then bypasses security of the blockchain.
But all that information is kept away from the reach of the people or anyone for that matter who is not part of the network. This kind of trumps any chances of hacking or manipulation, and these are completely cast out of the equation. All the coins present on this blockchain can be considered fungible, which makes them completely interchangeable with any other asset which might or might not be part of the Mimblewimble blockchain in the first place.
Limitations of Mimblewimble
You have only come around to potential use cases of the Mimblewimble network, but there are certain limitations that haven’t been talked about before you saddle your horse to become part of the Mimblewimble blockchain; there are certain pushbacks and limitations that you should be aware of.
- Transaction Throughput
The transactions that are confidential put a lot of strain on the transaction throughput ability of the blockchain due to the increased data size. Because there is so much information that needs to be first processed and then redacted so that it can’t reach any other user out there, the processing time is extremely high therefore adding to the validation time and creation of blocks as well.
Sometimes users have to pay a higher transaction fee to get both confidentiality and validation of their transaction in real-time. Whenever you opt for something private and off the charts, there are often sacrifices that are being made, and slow throughput is one of the sacrifices that you have to make if you choose to go with the Mimblewimble blockchain system and complete confidentiality.
When it comes to confidentiality, many personnel and organizations are more than alright when it comes to storage of user data because they are getting confidentiality within their transactions and for some organizations, that are a top priority as compared to any other feature of a blockchain media.
- Lack of Quantum-Resistant Capability
It has been stressed many times among various crypto channels that although presently crypto technology is prone to any kind of change or manipulation, quantum computing is the enemy which can take control of blockchain technology.
That being said Mimblewimble blockchain is not new to quantum computing because it still relies on the simple execution of digital signatures, which is like a walk in the park for a quantum computer to break into and manipulate according to the will of the user.
Quantum attacks are becoming a real threat to the blockchain technology, and some kind of resistant technology needs to be developed if this threat is to be tackled in a more professional manner because in the coming years’ people will be fearful for their money and the prospect of quantum attacks lingering over their heads at all times.