Mimblewimble

Mimblewimble is a decentralized protocol designed for privacy, employing a unique method to structure and store transactions on the blockchain. An anonymous developer designed and introduced it using the pseudonym Tom Elvis Jedusor, the French counterpart for “Voldemort.” ^[1]^[2]

History

MimbleWimble, a blockchain protocol emphasizing privacy, fungibility, and scalability, surfaced in July 2016 through an anonymous contributor identified as Tom Elvis Jedusor on the IRC channel #bitcoin-wizards. The protocol proposed a unique transaction structuring method to enhance privacy on public blockchains. Building upon the concept of one-way aggregate signatures (OWAS) from an anonymously published 2013 paper and drawing inspiration from Bitcoin Core developer Gregory Maxwell's Confidential Transactions and CoinJoin proposals, Jedusor's design garnered attention from researchers. ^[2]

Andrew Poelstra, a mathematician and applied cryptographer at Blockstream, refined the MimbleWimble white paper in October 2016, further contributing to the protocol's development. Initially considered for integration into Bitcoin or as a sidechain, implementing MimbleWimble faced challenges due to the absence of an expressive scripting language, as explained by Pieter Wuille, co-founder of Blockstream. ^[2]

MimbleWimble's notable trade-off is the lack of an expressive scripting language, limiting features like payment channels and cross-chain atomic swaps. Two primary implementations, Grin and BEAM, emerged with different community structures, ethos, funding models, and technical details. Grin, led by pseudonymous Ignotus Peverell, embraces an open-source ethos, while BEAM, initiated by CEO Alexander Zaidelson, adopts a more formalized approach. The protocol's implementations offer users distinct options within the MimbleWimble ecosystem. ^[2]

Features

Mimblewimble employs Elliptic Curve Cryptography (ECC) as a cryptographic framework to address key requirements, enabling verification of transaction accuracy and involved parties without public disclosure. ECC, rooted in discrete logarithms, introduces complexity to blockchain equations, particularly compared to simpler multiplications. This discrete nature enhances security by delving into mathematical values, covering realms like probability and set theory. ^[2]

Mimblewimble improves privacy, scalability, and fungibility by amalgamating cryptographic protocols, including Confidential Transactions (CTs), CoinJoin, Dandelion++, and Cut-Through. ^[2]

Confidential Transactions (CTs)

In 2013, Adam Back proposed Confidential Transactions on the Bitcointalk forum, introducing a method for encrypting transaction values using blinding factors—random encrypting values selected by the sender. The blinding factors, acting as random strings, are multiplied by all inputs and outputs in a transaction, effectively concealing the values. Pedersen Commitments, a cryptographic primitive within the Commitments family, support this confidentiality. Commitments must satisfy two fundamental properties: binding, ensuring commitments remain unchanged once agreed upon, and hiding, preventing adversaries from determining the original transaction amounts. Using a cryptographic hash, a commitment scheme is constructed by hashing data and a blinding factor, with the hash revealed for verifiability while ensuring the irreversibility of the operation. ^[3]

Coinjoin

CoinJoin is a privacy-focused technique used in cryptocurrency transactions to enhance privacy and fungibility. In a CoinJoin transaction, multiple users combine their transactions into a more significant transaction. This collective transaction makes it more challenging for external observers to trace the origin of specific funds or link inputs to corresponding outputs, thereby improving participants' privacy. CoinJoin does not rely on a trusted intermediary; participants maintain control over their private keys throughout the process. This approach enhances privacy and contributes to a more confidential financial environment by making it harder for external entities to analyze and track individual transactions. ^[2]

MimbleWimble implements this by integrating CoinJoin directly into the protocol rather than relying on third-party wallets or services for transaction-layer privacy enhancements. In the MimbleWimble framework, all transactions within each block are automatically merged into a single transaction, concealing a significant portion of intermediary transaction details. This design choice contributes to the overall privacy and confidentiality of transactions within the MimbleWimble blockchain. ^[2]

Dandelion++

Dandelion was proposed as a Bitcoin Improvement Proposal in 2017 by researchers from the University of Illinois at Urbana-Champaign, aiming to enhance the privacy of Bitcoin transactions by concealing their IP addresses. The mechanism was inspired by the structure of a dandelion flower, where the transaction underwent two phases: the "stem" phase for obfuscation and the "fluff" phase for broadcast. ^[2]

Initially, the transaction is sent to a single node, successively relayed to other individual peers, and then disseminated across the entire gossip network after achieving sufficient "hops" from the original peer. This process provided a visual analogy to the gradual blooming of a dandelion flower. ^[2]

Within Mimblewimble, the Dandelion mechanism is enhanced through a technique known as the 'transaction offset.' This approach facilitates merging multiple transactions, leading to the irreversible mixing of their inputs and outputs. Consequently, even if a node is identified as the source of a particular transaction during the Stem phase, it becomes impossible to ascertain the original inputs and outputs it initially held. ^[4]

Cut-Through

Cut-Through refers to a technique used in the MimbleWimble protocol to improve scalability and reduce the size of the blockchain. The cut-through mechanism aggregates and condenses transactions into a single set or block. This process eliminates redundant transaction data and merges common elements, such as inputs and outputs, resulting in a more efficient use of space on the blockchain. ^[1]^[2]

By implementing cut-through, MimbleWimble aims to create smaller transaction blocks, reducing the overall data size of the blockchain without compromising security. This approach contributes to improved scalability and faster synchronization for network participants. The ability to remove unnecessary information while maintaining the integrity of the blockchain is an important feature of the MimbleWimble protocol. ^[1]^[2]