To Harry Potter fans, “Mimblewimble” is a tongue-tying curse that halts its target from talking about a particular topic or subject.
Presently, mimblewimble is a famous phrase in the cryptocurrency world as well. It the crypto world, it means that there is a newly trending protocol. It relies on strong cryptographic primitives and provides an excellent framework for a blockchain with good scalability, privacy, and fungibility.
What is Mimblewimble?
It uses a form of elliptical-curve cryptography and requires smaller keys than some cryptography types. In a network that uses the Mimblewimble protocol, there are no addresses on the blockchain, and its data storage is highly well-organized.
Requiring only about 10% as much data storage like the Bitcoin network makes Mimblewimble highly scalable for storing the blockchain, impressively quick and less centralized. The nature of the protocol allows private transactions that are highly anonymous.
First published in July 2016, the Mimblewimble whitepaper was from the Bitcoin research channel that carries a pseudonym ‘Tom Elvis Judisor’ – the French counterpart of Harry Potter’s nemesis, Voldemort.
Nearing the end of 2016, another anonymous author that uses a pseudonym ‘Ignotus Peverell’ (the first owner of the invisibility cloak in the Harry Potter universe) has started a Github project that uses the Mimblewimble protocol. The project is called Grin, which was released its Mainnet on January 15, 2019.
How does it work?
To better understand Mimblewimble, one must first understand Bitcoin’s UTXO (unspent transaction output) model. If paying with fiat, a transaction would go as follows:
If Liza gives Sam 1 USD
Liza: -1 USD
Sam: +1 USD
It is different from the Bitcoin network. BTC transactions have several inputs and outputs that go from the sender to the receiver.
Mimblewimble makes transactions confidential.
Just like what the curse does, the crypto counterpart of Mimblewimble is also confidential. The protocol utilizes a much more proficient system that eradicates the need for inputs and outputs. One multi-signature model substitutes the UTXO model for all inputs and outputs. These are Confidential Transactions. If Alice wants to send Bob a coin, both Alice and Bob will create a multi-signature key that can be used to authenticate the transaction.
Confidential Transactions use the Pedersen Commitment arrangement; it means that there are no needed addresses. As an alternative, the parties share a ‘blinding factor.’ This blinding factor is shared secretly among the two parties that were involved in the transaction. However, because of the blinding factor replacing addresses, only the two parties of a transaction know the transaction details. This keeps the privacy of the network tremendously high.
Talking about scalability, Mimblewimble Protocol’s most important feature is the ‘Cut Through.’
One block consists of several transactions and plenty of information that needs to be stored on the blockchain. The blocks can be compressed through Mimblewimble’s Cut Through feature as a large part of the information and can be removed from the block without risking the blockchain’s safety.
Mimblewimble can eliminate the output of the transaction and the input of the second one. It means that there is only one input and one output that is needed to be verified. It compresses the size of the blockchain, making Mimblewimble much brighter in terms of required data storage.
Several popular privacy coins were widely used in the crypto community; their networks can be enhanced by implementing new technologies like Mimblewimble.
Suppose the creators of more mainstream coins (which includes non-anonymous currencies, such as Bitcoin) move more in the direction of the Mimblewimble. In that case, cryptocurrencies can become private and anonymous again.