The Background
With a proper look at the trends of transaction on blockchain and crypto-finance, it is obvious that almost every transaction, is traceable and largely transparency. This been established, anyone that makes an extra effort to review the tread of transactions might come up strong with an extra resource.
This resource, if properly examined with a criss-cross analysis, might birth a link that will expose those involved in the transaction and sometimes expose their asset to the public. This eventuality stands against everything one would love to expect in the crypto-sphere, as originally anticipated by the founder of Bitcoin. This eventuality might make this user and crypto lovers susceptible to attacks.
Take a thought and ponder about the probable breaches that are eminent, when privacy is thrown out of the waters?
Have you ever wondered about the security problems that might be birthed, when the treads of transactions leading to the assets of the users, are thrown to the view of public domain?
Maybe if you think of how much information exchangers have about their clients, in relations to their transaction details you wouldn’t wish you were invested in the process.
Imagine Samson an Australian, (a millionaire with junk load of bitcoin) living in Cuba who wishes to take advantage of the architectural design ability of Maxie to erect an edifice.
After talking with Maxie, Samson agrees to send some cryptocurrency (Bitcoin) to Maxie in Nigeria so as to kick-start the design process. With the insinuation that his privacy issues are well handle by the blockchain technology.
Prior to the completion of the transaction Samson discovers that his insinuation (about his wallet and transaction privacy) was a mirage. If you were in his shoes, wouldn’t the security issues surrounding the exposure of your asset to the public domain leave your mind puzzled?
Wouldn’t you feel reluctant to continue with the transaction?
With this, a huge problematic issue birthed in the cryptocurrency’s lithosphere and peer-2-peer transactions.With this problematic situation glaring, came up the best probable solution to the situation. This solution that will disrupt the crypto-space with a protocol, that with light up the vague areas of privacy and security in blockchain transactions.
Introduction to the BEAM Platform.
Even with privacy and security issues standing strong in crypto and blockchain’s lithosphere, many are still tempted to continue with blockchain process.
This trend is enhanced by the leverage and reward the blockchain technology offers at all fronts (from medicine to other sciences, from crowd computing to dispute resolution; the list of endless opportunities births a huge advantage) that gets the blockchain users stocked in a vicious circle, which leaves them begging for more.
But what if an innovation like Beam breaks the sad the sequence? What if the vicious circle is broken and frozen out of the blockchain lithosphere by BEAM? What if your privacy stays private by default? Maybe many might stay commitment to the process.
What BEAM Entails
Data leaks from exchangers/merchant, privacy issues, security worries and the possibility to deanonymize users forms the problem that births the founding ideas on which BEAM was developed.
BEAM protocol was developed by an individual who is yet to be identified. BEAM protocol hinges and slides on a huge spectrum of privacy and confidentiality for blockchain transactions. It footing is hooked a phenomenon from a written tale known as the MimbleWimble.
MimbleWimble takes after a spell from the tale of Harry Potter’s writing, which restricts one from telling or talking. It afford a massively privacy for its transaction giving the user a firm control of his data set as related to the transaction.
It is footed on Greg Maxwell postulation which comes in two shades of the same image:
Confidential Transactions
Transaction Cut – Through
The Beam protocol features two characteristics, first it seals or hides the details until the time designed for the (key) details to be revealed. Secondly it provides a (binding) assurance that seems like a surety that validates the engagement or transaction.
Confidential transactions are implemented by using cryptographic commitment scheme which has two basic properties: hiding and binding. It is similar to giving someone a closed safe box with some message inside that only you know the combination for. When time comes you can reveal the key and the person can make sure that your commitment is valid (binding) while he cannot know what is was before the key is received (hiding)
MimbleWimble utilizes a well known commitment scheme called Pedersen Commitment that achieves this using Elliptic Curve Cryptography and is of the form C = r * G + v * H Where r is a blinding factor, a secret key hiding the real value v and G and H are generator point on a specific elliptic curve.
Each transaction in crypto-finance that is facilitated by BEAM, has an actual value of the transaction and a binding factor.
For the transaction to be considered complete there must be an ownership transfer. But the Beam technology births a huge privacy to the transaction such that if the UTXO (Unspent Transaction Output) and binding factor is not given or revealed by the sender, the receiver cannot leverage off the transaction.
When the sender eventually reveals UTXO and the binding factor to the receiver, the receiver has to create a new output commitment and binding factor that is his, so as to acquire his control as well.
The linearity Pedersen Commitments is such that if a transaction that follows a trend, from A to B to C (that is from A to B and then from B to C) the intermediary transaction can be cut off such that the transaction follows a direct trend from A to C.
In BEAM blocks are mostly constituted by one or more transactions (which might include a set of intermediary transactions) with inputs and outputs. But as we know this intermediary transactions can be merged to just one large transaction. This merging of transaction might be either done in a single block or across multiple blocks of a blockchain.
With this been said the process of merging can be applied throughout the blockchain, such a situation is birthed where in place of storing the entire details of the transaction history, what we need to store is the present state of UTXO. But this history can still be verified and confirmed valid by the storage of just the header of the previous block, as the previous block holds pieces of information that validates the previous states:
(using a structure called a Merkle tree) and Proof of Work that allows to reach consensus on which of the header chains should be considered the correct one (in case of blockchain branching).
With this system in place it becomes extra difficult for any malicious agent to successfully attack a target individual (or party) involved in a transaction, that is if the individuals (or parties) is shielded by BEAM (MimbleWimble). This is due to the fact that, with BEAM (MimbleWimble) innovation, no personal information is available on the blockchain for a third party to view or review.
BEAM (MimbleWimble) operates such that, the proof of ownership slides between value of the UTXO and the binding factor. It does not store the address of the parties (when there is a transaction between their respective wallets either online or offline).
MimbleWimble includes a transaction kernel, this transaction kernel is such that it births a binding factor for the sender which is entirely different from that of the receiver propagating privacy in the process.
Furthermore, transaction in BEAM is such that the actual value of the transaction is sealed as it comes with a non zero knowledge range proof that ensures that the transaction has a positive value. BEAM will most probably streamline it users from engaging in a transaction that will create negative values.
This is because if there is a creation of negative values in the course of a transaction, the aftermath will birth the probable creation of new coins, which is not best suited for the system. So in other to have this prohibited, the system is protected by a highly efficient computational mechanism.
This mechanism is such that it implement a zero knowledge range proof that assesses every transaction for flaws before they are validated.
.BEAM Use Case Scenario
With the huge buzz of cryptos and the inception of Bitcoin in 2008, Tendency from North Korea ventured into the crypto-space because he wants to hide his assets away from the government notice, as he does not want to be monitored and trailed by their scrutiny.
Yes this is exactly the promise crypto-currency birthed at the time; it painted a picture of the future where the hold of any central regulating agent is kicked out of place.
With this information available to Tendency he invested massively into Bitcoin. With time his view expanded into other blockchains projects as well as their digital currencies.
With these opportunities standing in his face, he couldn’t just hold his cryptos for keeps sake. He need to dive and explore the cryto-space, investing into almost any lucrative blockchain innovation that turned out massive.
One day while surfing through the internet he came across Maxie an architect in Nigeria massively endowed with sleek Architectural skills, unlike what he was used to. Tendency out of his fascination wished to have Maxie engaged for the design of his proposed home, he wanted to have situated by the side of the beach.
With his knowledge in the cryptospace and blockchain lithosphere, he remembers a peer-2-peer platform that could handle the process of fund transfer, in place of using bank transfer that might open the transaction to the public view and probably the search light of the government.
But just at the verge of the transaction, which is to be modulated by the peer-2-peer network, he got a piece of information of how many crypto users have be tracked down by a careful analysis of their transaction by attackers and sometimes the government. It also came to his notice that, it might be a bit risky to throw his personal information (wallet address and assets size) to view of a third party.
What if there are data leaks?
What if the data leakage make him a target of attacker or even the government?
What if the tendency to lose his asset due a probable attack is eminent?
With all this questions begging for answers in Tendency’s mind, he becomes reluctant to go through with the process of the deal.But one day through a floating piece of scattered information from 
Tendency and Architect Maxie signed up with BEAM and got the deal in session
Tendency sends the fund for the design to Maxie which he hides, but was confirmed and authenticated by Maxie (binding) can and can only be assessed by Maxie when Tendency is sure that has had the design done.Maxie Births a massively fantastic design for Tendency, which he erects by the beach of his city. But If not for the BEAM innovation, with the kind of money transferred to Maxie for the design, the transaction would been scrutinized by the government. This is because, transaction of such financial magnitude going across border, would most times attracts the attention of the government’s scrutiny.
Summary of the BEAM Innovation
Beam is an innovation that takes the privacy and security concern of it user to the extremity with little or no probability to afford leaks to the public domain.
Beam is a protocol is designed by C++. it is hinged on Mimblewimble (a spell that keeps you from exposing a secret by restricting your tongue from talking), it births privacy to transaction by default giving users the ability to hide or control their personal information or transaction details.
BEAM does this by removing the transaction details such as wallet addresses and amount transferred during the transaction is hidden from public.
The BEAM protocol is such that fewer details are recorded so that it tends to be more scaleable and massively up to speed.
From the case study analyzed
Tendency (Beam user) have a firm control of the transaction details as regards the privacy issues; he modulates details of his personal information available to the public in accordance with the law.
The blockchain does not have addresses or other vital personal information stored as such they transaction cannot be reviewed to get those vital resource that might lead to attacks.
Blocks are mined using Equihash Proof-of-Work algorithm
BEAM was first analyzed in this post
For More Information:
- Beam Website
- Beam Position Paper
- Mimblewimble Paper
- Beam YouTube
- Beam Telegram
- Beam Facebook
- Beam Github
- Beam Bitcointalk
- Beam Medium
- Beam Twitter