What is Mimblewimble?

Tested for decades, Mimblewimble uses elliptic-curve cryptography that requires smaller keys than other cryptography types. In a network that is using the Mimblewimble protocol, there are no addresses on the blockchain, and the network’s data storage is highly efficient. Mimblewimble needs about 10% of the data storage requirements of the Bitcoin network. This makes Mimblewimble highly scalable for storing the blockchain, significantly faster, and less centralized. Furthermore, the nature of the protocol allows for private transactions that are highly anonymous (more about this later).

The birth of Mimblewimble

Rejoice, Harry Potter fans! Another reference is coming from the movie fan world. The Mimblewimble Whitepaper was first published on July 2016 in the Bitcoin research channel under the anonymous author name of Tom Elvis Judisor – the French name for Voldemort. Soon after the whitepaper was published – at the end of 2016 -, another anonymous user with the pseudo name “Ignotus Peverell” (the original owner of the invisibility cloak from the Harry Potter universe) started a Github project with the application of the Mimblewimble protocol. This project is called Grin, which released its mainnet on January 15, 2019. There’s also another implementation of Mimblewimble, Beam, that has been already released. We will talk about Grin and Beam later in this article.

Confidential Transactions

This is the point where Mimblewimble comes into the picture. As mentioned before, the protocol proposes a much more efficient system, eliminating inputs and outputs. The UTXO model is replaced by one multisignature for all inputs and outputs which are called Confidential Transactions. If Alice wants to send Bob a coin, both Alice and Bob create a multisignature key that is used to verify the transaction. Confidential Transactions use the Pedersen Commitment scheme; there are no addresses. Instead, the parties share a “blinding factor”. The blinding factor encrypts the inputs and outputs of the transaction along with both parties’ public and private keys. This blinding factor is shared as a secret between the two parties who were engaged in the transaction. Due to the blinding factor replacing addresses, only the two parties know that they were involved in a transaction. This keeps the privacy of the network at a high level. The Pedersen Commitment scheme works as follows. Full nodes deduct the encrypted amounts from both the inputs and outputs, creating a balanced equation that proves that no coins were produced out of thin air. And during the whole process, the node does not know the actual amount of the transaction.