How would you feel if you were to enter an ATM with a head mounted camera that would broadcast the balance in your bank account to the world.
It would also broadcast where and how you spend your money.
You might feel this is an invasion of your privacy and it robs you of your freedom which is a fundamental human right.
you may desist from using money in such a system and this defeats the purpose of money itself.
If you are wondering why I have started my post with such an outrageous example then I must tell you that this is just a state of affairs with bitcoin and a lot of other cryptocurrencies.
Bitcoin is a blockchain based cryptocurrency which is great! However it means that it is a public ledger of accounts which means that your accounts can be tracked and how much money you own, whom you send it to or what you spend it on can be tracked as well.
People who value their privacy would rather not transact in such a system or look for means to hide the transactions so that they cannot be tracked back to them.
Enter Beam and all these worries disappear.
Beam comes to the world of cryptocurrencies bringing with it the opportunity to store value in a new cryptocoin without compromising privacy.
Beam enables its wallet holders to use this cryptocurrency to send and receive payments without disclosing the Identity of the sender or the person receiving the money.
This way Beam would establish itself as a crypto currency that maintains privacy and secrecy of transactions.
To ensure that it does not even store wallet addresses onto the blockchain.
Neither does it store the complete transaction history. It rather stores the present state of the block thereby reducing the block size.
So if a person "A" wants to send some funds to person "C" and the transaction works out as follows...
Person "A" => Person "B" => Person "C"
Then only what matters in this protocol is
Person "A"=> Person "C"
So what does Beam offer its users
- Beam gives full privacy control to its uses. A user gets to decide what information is shared and with whom.
- privacy is a built in feature that does not cause blockchain bloating that is no additional information is required to hide sensitive information.
- Beam take a very different approach is it cuts down the information and transfers only the essential parts based on the Mimblewimble protocol.
- no trusted setups required
- Beem works on Equihash that is proof of work algorithm.
- it does not store addresses of the sender other receiver on the blockchain
- Beam can be used to implement various kinds of transactions such as escrow, time locked transactions, atomic swaps etc
- there is no free mining involved nor would there be an ICO instead it is backed by a treasury emitted from each block during the first five years
- it is an open source project developed in C++ from scratch.
How Beam compares to other coins and protocols
How Mimblewimble makes BEAM work
The Hallmark of Mimblewimble is that it implements privacy without putting any load on the blockchain.
It does so by incorporating ...
(a) Confidential Transactions and
(b) Transaction Cut – Through.
To implement Confidential Transactions it works on the properties of hiding and binding.
If you give a locked box with a message inside where you are the only person having the key to the box.
You give this box to the intended user so the message is in a hidden state for hiding.
When you handover the key to the person he can access the message and inform your commitment or binding.
Transaction Cut – Through
A large number of transactions stack up to make a block. Conventionally in a bitcoin like scenario the entire history of transactions is recorded onto the blockchain.
In the Transaction Cut – Through only the current state and the header of the block are recorded.
No addresses or amount being transacted is stored on the blockchain.
Only the current state off the block is considered thereby reducing the size of information store and transferred to the next stage.
In this method the unspent transaction outputs that person on the blockchain are validated and prove to be belonging to the receiver via the value of the message and the value of the blinding factor.
As the transaction is created only the commitment is recorded onto the blockchain. The addresses of the parties involved and the amount are not recorded on the blockchain.
Understanding how Beam works
The working process of Beam can be understood by following the following workflow
A Beam Use Case
Renie works for online store that wants him to facilitate system by cryptocurrency payments can be accepted.
Renie does due diligence and finds that this would require billing information and customer information to be recorded on to the blockchain.
This is an undesirable feature and would compromise the privacy of the users.
Renie get introduced to Beam. Using Beam Renie can device a system identity of the customers and the amount spent can be prevented from being stored onto the blockchain.
More Information & Resources:
- Beam Website
- Beam Position Paper
- Mimblewimble Paper
- Beam YouTube
- Beam Telegram
- Beam Facebook
- Beam Github
- Beam Bitcointalk
- Beam Medium
- Beam Twitter
twitter link : https://twitter.com/1morepeterpan/status/1039492397577785344