Mimblewimble, a new privacy coin protocol, has generated plenty of hype over the past few weeks. Two coins based on the protocol, Grin and Beam, went live for the first time this month and have garnered plenty of attention. Although those coins have performed poorly so far, a number of major developers are endorsing Mimblewimble itself. Will the protocol eventually find its place?
Mimblewimble In a Nutshell
Mimblewimble is named after a spell from the Harry Potter series that prevents its target from speaking. This reflects the fact that Mimblewimble is primarily a privacy protocol: that is, Mimblewimble doesn’t “speak about” or reveal its transaction data. This is true of most crypto privacy protocols, but Mimblewimble ensures privacy to a greater extent than most of its competitors.
To achieve a high level of privacy, Mimblewimble makes use of a number of features including elliptic-curve cryptography, coinjoins, and the Dandelion gossip protocol. However, Mimblewimble’s primary innovation is the fact that it does away with public addresses altogether. By contrast, privacy coins like Monero and Zcash simply hide select transaction data.
Mimblewimble’s approach has the benefit of improving not just privacy, but also scalability and node synchronization speeds. The protocol’s various features additionally allow transaction data to be mixed and removed, thereby reducing the resources that the Mimblewimble network needs to operate. All of these factors offer improvements over both Bitcoin and privacy coins.
Trouble In the Market
After a long development process, Mimblewimble has finally produced two coins, Grin and Beam. Unfortunately, these coins have performed poorly so far. Grin, which was launched on January 14th, has seen its price drop from above $30 to less than $5. Beam, which went live on January 4th, has seen its price fall from above $4 to less than $1. Both of these losses occurred over weeks or days―a bad sign for short-term investors and miners.
As always, a few optimists are predicting that Grin and Beam will be more successful in the long term. However, most of Mimblewimble’s hype is not actually based on those coins at all. Instead, many proponents are actually interested in the Mimblewimble protocol itself. Notably, Litecoin founder Charlie Lee has recently praised Mimblewimble, stating that it offers better scalability than Bitcoin.
Meanwhile, Riccardo Spagni, the lead developer of Monero, has also had good things to say. In fact, Monero is currently implementing Mimblewimble on its Tari sidechain, meaning that the technology will be part of a top-fifteen privacy coin in the near future. These developments mean that Mimblewimble could prove to be very successful―even if its first two coins are not.