Many blockchain developers strive to develop the ideal consensus model for decentralized ledgers for the purpose of bringing improved scalability, network, and privacy features. Some remain theoretical proposals for how blockchains should work while others, after years of development, finally launch and have the chance to be explored in practice. In the latter case, even those that do launch are at the fate of users who, through experimentation, find out if the model is worthy or not.
Mimblewimble is a unique design that improves upon the notions of Proof of Work by changing the way that transactions are processed and issued by the network. In fact, the model is so revolutionary that it caused a temporary wave of hype that led to projects such as Litecoin launching a testnet version.
This article is set to explore the functioning, benefits, and use cases of the Mimblewimble blockchain system, so let us dive straight into it.
Mimblewimble is a blockchain model focused on improving scalability and privacy by utilizing a system that is radically different from traditional cryptocurrencies. It was initially proposed by an internet user writing under the name of Tom Elvis Jedusor, the french name for Harry Potter character Voldemort, in 2016. Two years later, Blockstream developer Adam Poelstra revised the proposal and began working on a practical implementation.
The model launched in 2018 and has subsequently spawned two cryptocurrencies: Grin and Beam. In October 2020, Mimblewimble was also implemented by Litecoin as a means of improving the project's transaction throughput and privacy features.
The core idea of Mimblewimble is to revise the way that the ledger itself works within a blockchain network. Rather than providing data on each individual transaction as well as all of its information (timestamp, value transferred, etc.) Mimblewimble’s blockchain provides no such details. Data on an MW network appears as a set of random data to users outside the network since there is no identifiable transaction information.
As a result, this type of blockchain network has a compact history that is easy to store, distribute, verify, and synchronize. Privacy is also impacted as there is no link that can connect two addresses through transactions. Each user personally knows the amount or value of tokens transferred, but the opposing party has no way of finding out where the tokens came from prior to the transaction and who they have historically interacted with.
Another key design choice allows Mimblewimble to remove unnecessary transaction information and remove a significant portion of block data. With the latest block’s arrival, the input and output would only disclose the original and last-receiving user, instead of including all the users who were inbetween.
Despite the fact that Mimblewimble offers noteworthy improvements to blockchain technology, the model was not well received among core Bitcoin developers as it was thought to be too radically different. Moreover, the MW system differs greatly from what Satoshi Nakamoto had in mind for the leading cryptocurrency.
As previously described, there are more than a few advantages that make Mimlewimble an attractive solution for all of our problems. It can solve issues such as block size, scalability, and even privacy. To provide you with a better insight into how MW solves them, we will inspect each problem respectively.
By obfuscating and removing unnecessary transaction information Mimblewimble does a great job at increasing privacy levels on its native blockchains. Only those that interact with each other can know personal transaction information such as the number of tokens sent but other than that, the amount of data relayed to outsiders is incredibly insignificant.
Mimblewimble removes block data for the purpose of improving scalability and privacy. The end results are that nodes can verify transactions much faster, spend fewer resources, and synchronize with the network quickly. All of this occurs solely due to the smaller block size.
A notable positive side-effect of decreased block sizes to consider is the fact that more users can afford to join the network. The costs and resources needed to verify blocks are smaller, meaning that the mining community is much more diversified.
Because of the aforementioned features, Mimblewimble networks also benefit from scalability. Increased transaction throughput arises from the reduced rate of data stored, recorded, and broadcasted to the rest of the network. While only native MW networks enjoy this advantage, it is worth noting that other networks (Ethereum, Bitcoin, Litecoin, etc.) are capable of integrating Mimblewimble as a sidechain solution, similarly to how Lightning Network is being used.
Mimblewimble is a blockchain model that features improved scalability and privacy. It reached a peak in popularity in the year of its launch, and since then, not that many developers have been interested in utilizing it, apart from Grin, Beam, and Litecoin.
The obstacle likely occurs due to the fact that Mimblewimble introduces radical transformations, among other issues. Moreover, other more attractive privacy and scalability proposals appeared in the meantime, which left Mimblewimble limited to a niche community of blockchain enthusiasts.
Terra is more than just a blockchain that issues algorithmic stablecoins. With Terra, you can earn interest, spend crypto easily, and replace most of your banking needs with one seamless DeFi protocol.