Bitcoin being the internet of money is one of the most first widely used virtual currency across the world in which its users can carry out transactions which transfer value from the sender to the receiver, through a verifiable fully distributed peer-to-peer system.
Based on the decentralized nature on which the bitcoin protocol was built on, each transaction can be verified crytographically on the transaction script which is stored in a ledger called the ‘Blockchain’.
At the end of any transaction, i.e if Mr X intends to transfer some bitcoins to Mr Y, the final state of the whole process is stored in a block, upon which subsequent future transactions are built on in a continuous run. Hence, assuming that fifty other transactions have transpired sequel to that of Mr X and Mr Y, this implies that a total of about fifty new blocks are compiled on top of the existing one. Therefore to verify the genuineness of each transaction, one must basically download the whole new fifty transactions from the top all the way down to the bottom. The culmination of these block outputs form the blockchain.
From the previous illustration between Mr X and Y, every transaction carried out is seen as an input output system, i.e sender to receiver, and at the other end which is the output of any protocol must be verified before another block can be built on it.
Hence all transaction outputs are consistently monitored by individual miners or companies in other to verify the validity of all transactions being carried out in the system. Definitely if the whole process is to be constantly monitored like this, the degree of anonymity and privacy becomes diminished, and every transaction if sorted out can be traced back to its origin.
Due to the existence of ''full clients'' in the bitcoin system whose duty is to store the entire history of bitcoin transactions by every user ever made on the platform. He manages the user’s wallet and can initiate transactions directly on the bitcoin network.
''This process is completely non-private and quite dangerous for people to use as it denies the users the privilege of enjoying complete anonymity in their daily activities in the system''.
Similarly, this is not only limited to the cryptocurrency bitcoin but it also extends to other crypto’s such as Litecoin, Dogecoin etc.
Several solutions to the prevailing challenges has been initiated by several people. The likes of Dr Maxwell’s Coinjoin system built for users of the bitcoin cryptocurrency to "combine interactively and carry out independent transactions", nevertheless the issue of piled up and too much data still plagues the whole protocol.
Introducing the Innovative BEAM Cryptocurrency
Fluxed with numerous advancements in technology of the crypto-world in terms of the prevailing challenges as discussed earlier, BEAM poses to be the perfect paradigm for the ideal confidential cryptocurrency, that provides its users with such latitude as to possess a total control over the privacy of their transactions and various private information which will be visible to the parties in consideration.
The user, unlike on other crypto platforms is slaked with a complete control over his personal data and enjoys the privilege of anonymity in transactions, in the sense that no addresses are stored in the blockchain, either that of a receiver as an output or the sender as an input.
The BEAM protocol is designed in such a way that it supports several types of transactions such as atomic swaps, escrow and others.
Beam in simple terms;
BEAM is a next generation anonymous and confidential store-of-value cryptocurrency that is built on an elegant and innovative 'Mimblewimble' protocol.
It is built to overcome the bulky proofs requiring so much data on the output of every transaction, by the combination of the transactions in blocks.
Limitations of conventional crypto-currencies.
Just like other cryptocurrencies, bitcoin system is built on a decentralised trust which exists among the different members of the network. It also contains addresses just like that of an email which everyone can use to send and receive coins in and out of their wallets.
But it’s is believed that the transactions carried out with the use of these addresses, contain to every degree, a high level of privacy and anonymity and that nothing within the virtual world of the finance network can be used to track back the real identities of the parties in transaction.
By tracking transactions that occur in the bitcoin network and a proper blockchain analysis and research, it becomes possible to trace transactions by addresses and identify the relationships between them by collecting the useful data in the blockchain. This system is quite perfidious when it comes to privacy protection and carrying out covert transactions, due to data leaks.
Benefits of Harnessing the BEAM currency;
The confidentiality of the Beam cryptocurrency offers a wide range of advantages to its users, which includes the following;
• It conceals transaction values for the sake of privacy. All the transactions carried out in the platform is guaranteed independence in terms of anonymity, hence no transaction information is stored in the blockchain except for the UTXO’s.
• It gives users the power to control the kind of personal information they make public, and to whom it is shared. The good part about it is that it can be used by individuals both on their desktop and mobile wallet for both large and small scale users.
• It creates an avenue for lesser transaction details per transaction, at such enhancing faster confirmations and very efficient scaling. This also makes budget management easy, thereby featuring actionable earn and spending rights.
• It is designed to accommodate multiple types of private transactions, either time locked or escrow, pending on the user’s preference.
• It is highly compatible in the sense that it comes with an extensive set of tools for running and, managing the nodes.
• It is designed with a ‘’cut-through’’ feature of Mimblewimble which is used to avoid computational overhead, making the Beam blockchain orders of magnitude smaller than that of any other bloockchain implementation.
• Its sustainability is based on an open source implementation system from the scratch, and it is overseen by the entire network/community and backed by the beam growth pool.
BEAM’s Backbone – Mimblewimble
Beam is built on Mimblewimble to allow users to send and receive money in a secure and private way. These properties are as a result of the protocols ability to remove the need for addresses and amounts in the verification of transactions.
This is done by eliminating the data load that exists as records of transactions clogging the entire blockchain and reducing the level of privacy that people demand.
By eliminating these data, it enhances the speed of transactions on the other hand while maintaining a scalable network. The Mimblewimble protocol is built on two major concepts which include;
I. Confidential Transactions and,
II. Transaction Cut-through.
-The Confidential Transaction;
These are achievable by utilising a simple-complex cryptographic model which is centred on its two major properties;- hiding and binding.
This is in reality, a security control measure that ensures certainty in trust and also at the same time, maintaining the existing security measures binding the trust and commitment.
A close illustration of these principles is likened to a father preparing an insurance scheme/will for his two children for the future ahead, so that at his point of death, the children will not be left stranded, but will be provided with inheritances in form of assets in his will to help cater for the children and family.
This is the key to the Mimblewimble protocol, in that while the children are fully aware of assets hidden in the fathers will, they do not know for sure if it is in form of cash, or landed property or maybe a company. It is also binding because at the dying point of the father, the assets are definitely passed on to the children. In like manner, Mimblewimble operates with quite the same principles of privacy and commitment.
''Each input and output of any transaction is seen as a linear combination of two factors; an actual value of the transaction and a binding factor.’’
-Transaction Cut-through.
A blockchain is simply a combination of blocks that stands as list of transactions carried out by the parties involved in the system, which in the long run tends to be bulky and less private.
The transaction cut-through is a system that by-passes or eliminates the previous piled up transactions, i.e if Mr X buys a watch from Mr Y at 0.02btc and the transaction output is recorded as 207154, then Mr X also proceeds to sell the watch to Mr Z yielding another transaction output of 207155. The chain of X – Y – Z represented in the transaction ledger is then cut off by X – Z, hence only the current state of transaction instead of the entire history of all transactions as they occurred is recorded.
This in turn cuts down the amount of data required to store and verify transaction data, and ensures that all unspent transaction outputs (UTXO) are proved to belong to the receiving user via the value of the message and the binding factor.
In Conclusion;-
'Every block in the blockcahin is simply a compiled list of transactions which consists of inputs and outputs'. The blockchain, rightly viewed is synonymous to a maze with a ‘start’ and an ‘end’ point.
Beam allows us to cut-through all meanders and edges of the maze and shoot direct for the end point. Extending this system to the entire chain, the protocol only involves storage of the present transactions, instead of the entire history.
True Illustration:-
Mr Sloane is a student of University of Southern California, and has been a crypto-trader for about a year and half. Together with his roommates, they are also interested and quite involved in the crypto world. But recently he discovered some treacherous and devious con ways exhibited by his roomie and friends, when they tried to hack into his system and steal his bitcoins. His roommate also tried very hard to track his transactions in order to nail him, and steal the few coins he has managed to accumulate over the months.
Mr Sloane recently stumbled into the BEAM cryptocurrency which offers him the much needed anonymity and privacy from his dangerous roomie and friends.
Since the only requirement to prove ownership of the unspent transaction output is the value of the unique binding factor, it becomes unnecessary to store any addresses in the blockchain. This implies that no matter the means by which an attacker will device to create a breach in the privacy of ones transactions, no personal information can be extracted from the blockchain.
You can learn more about BEAM,its policies and structure HERE.
For more information on how to get in touch with them via their various social media handles, visit :-
-connect on youtube
-connect on twitter
-connect on Facebook
-connect on telegram
For other enquiries about their mode of operation for better clarification, do well to visit their official website at beam.com and also know more about Mimblewimble structure.
You can also view this post on twitter. HERE IS THE LINK.
Beam2018.
Beamtwitter.