Beam, a new private ‘store-of-value’ cryptocurrency, has now officially launched and is available to the public. Beam is the first ever live implementation of Mimblewimble, a heralded blockchain protocol proposed anonymously in 2016 – much like the anonymous publication of the Bitcoin whitepaper – that aims to improve the privacy and ultimately the utility of cryptocurrency.
Cryptocurrencies, notably Bitcoin, emerged as the viable and privacy-oriented alternative for value storage and transfer. However, as time went on it was revealed that Bitcoin is only pseudonymous, with the ability for anyone to deanonymize users through data leaks and subsequent mapping of their public addresses on the blockchain to specific transactions using blockchain forensics.
Because of this issue, privacy-oriented cryptocurrencies such as Monero and Zcash were born. However, while these currencies have introduced strong privacy features, many of their transactions have been shown to not actually be private and both have been shown to not be entirely scalable.
“Beam looks to greatly increase the utility of ‘storage-of-value’ and payment cryptocurrency, the fundamental revolution proposed by Bitcoin, by improving the simple feature of confidentiality. True confidentiality and scalability for financial transactions is a requirement not only of institutions and investors, but for individuals as well, and is considered a major necessity for the mainstream adoption of digital assets.”
“Sovereignty over one’s own information is a basic human right, and applies to all aspects of life, and especially to financial transactions. Everyone, from the largest institutional investors to the individual cryptocurrency holder, should have the right to decide on what to disclose and to whom, including the right not to disclose anything to anyone, because fundamentally everyone is entitled to the sovereignty of their own assets. With Beam, we are enabling that sovereignty by building upon the foundations of Bitcoin with an incredible new technology called Mimblewimble.”
The name, Mimblewimble, is a reference to spelling in the Harry Potter universe that stops people from spilling secrets.
The project will use Mimblewimble combined with additional features that will offer true privacy to users transacting on their network. While the Beam blockchain maintains the distributed ledger and allows for decentralized validation of any transaction, no actual information about the sender, receiver or transaction amount can be obtained from it by an observer. By virtue of Mimblewimble’s Transaction Cut-through feature, the blockchain size is expected to be 3-10 times smaller than that of Bitcoin (assuming the same amount of usage). In the future, users will be able to turn on opt-in audit ability of their accounts and transactions, useful for accounting and tax purposes.
Beam was created to attract both the traditional crypto user, and to bring in new users who have been so far hesitant to enter the market due to privacy concerns. As financial institutions seek a deeper dive into blockchain, they bring along their customers. With more and more people entering the world of distributed ledgers, it becomes apparent that systems must be updated to ensure privacy.