Litecoin (LTC) may become anonymous from today

Litecoin (LTC) soon anonymous?

The progress of the Mimblewimble Extension Block project was detailed by David Burke, who manages the integration of this anonymous module in Litecoin. The developer explains that he has encountered difficulties in resolving issues related to the selection of parts — the new system requiring quick exchanges between Mimblewimble-related parts and “normal” LTC parts.

But the problems have been resolved, thanks to an almost total rewrite of the wallet code of the Mimblewimble extension module. David Burke explains that the project is being completed, and that he “remains confident that “the date by which the code that makes anonymous use of Litecoin possible should be over. we will be able to reach the March 15 goal.

Anonymity functions that will remain optional

Once the code is available, miners may decide whether or not to implement the update. The community is confident: the Mimblewimble testnet has been running for several months.

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It should be noted that this anonymity module will be optional for users of Litecoin, Mimblewimble existing on a separate channel from the main LTC channel. This means that exchanges and service providers will be able to choose whether they want to activate the anonymous option for Litecoin.

This is crucial: regulators have shown teeth in recent months against purely anonymous altcoins such as Monero (XMR) or Zcash (ZEC). This has led to deslistings on some exchanges, and prompted Dash (DASH) to review all his communication. A Litecoin that is anonymous in an optional way will thus be able to slip through the cracks, and stand out from its main competitors.

About Mimblewimble

On August 2, 2016 at 4:30 a.m. (UTC), an unknown person using the pseudonym Tom Elvis Jedusor posted a link on IRC leading to a text file hosted on the dark web. This file,entitled Mimblewimble,presents the basic principles of an innovative transactional structure focused on confidentiality. Its inventor then disappears without a trace, but Mimblewimble attracts the attention of some developers of the Bitcoin sphere, including mathematician Andrew Poelstra who will publish a more detailed version of the white paper on October 6, 2016.

The names used are direct references to the Harry Potter universe. Tom Elvis Jedusor is the real name of Voldemort, Harry’s mortal enemy, in the French version of the work: which makes it look like the creator is French-speaking. Mimblewimble takes its name from the Spell of Lead’s language that forbids the adversary from speaking by nooseing with his language, because Mimblewimble is supposed to “prevent the block chain from talking about the personal information of its users” according to the creator.

On October 20, 2016 at 11:47 p.m. (UTC), an unknown man calling himself Ignotus Peverell appeared on the scene to announce an open-source Mimblewimble implementation project called Grin. Again there are references to the Harry Potter universe since Ignotus Peverell is the name of the creator of the invisibility cloak and Grin takes its name from Gellert Grindelwald, a powerful black mage. The project grew thanks to the contribution of various developers, many of whom chose to remain anonymous. It was launched on January 15, 2019.

 

What is Mimblewimble?

Mimblewimble is a distributed registry concept focused on anonymity and scalability rather than programmability. Although it is based on the same principles as Bitcoin,it is significantly different in some respects.

Like Bitcoin, Mimblewimble is based on the notion of transactional output. Each transaction consists of inputs (inputs) and outputs .a result. The peculiarity of the system is that each entry represents the output of a previous transaction. This is why attention is paid to transactional outflows, and in particular unspent transactional outflows (commonly referred to as UTXO for Unspent Transaction Output)that represent in-circulation tokens.

 

 

However, Mimblewimble is changing the structure of these transactions. To do this, its inventor took three ideas from Gregory Maxwell, developer of Bitcoin Core and co-founder of Blockstream: confidential transactions, transaction mixing (Coinjoin)and transaction sectioning.

Confidential transactions hide users’ private information while allowing outside players to verify their validity. They are based on asymmetrical cryptography methods on elliptical curves. In a confidential transaction, each transactional exit consists of a “Pedersen commitment”and a“rangeproof”that can prove that it is valid while keeping its amount and recipient secret. In addition, the transaction contains a kernel containing an excess guaranteeing that no one can guess the recipient’s key, a signature from the recipient and the amount corresponding to the transaction fees.

This type of transaction could be implemented in Bitcoin; nevertheless it is very memory-intensive because of the size of the cryptographic evidence, which in the case of Bitcoin proves quite problematic. Mimblewimble, on the other hand, imposes these confidential transactions by default in the protocol.

Mimblewimble also implements the transaction mix,also known as Coinjoin,which involves combining multiple transactions into one to scramble the tracks. And, since this technique is applied to all transactions within the block, it follows that a block of Mimblewimble actually contains only one super-transaction! If the block is full enough, it becomes even more difficult for an outsider to know which output corresponds to which input.

 

The third method used by Mimblewimble is transaction cut-through. This allows all super-transactions to be combined with old enough and to remove spent transactional outputs (STXO) to keep only unspent transactional outputs (UTXO). This frees up a substantial place on the block chain. However, it should be kept in mind that individual transactions leave behind nuclei that they cannot be removed.

 

 

 

What does Mimblewimble bring and at what cost?

Mimblewimble is thus a summary of privacy techniques to obtain an opaque block chain. Confidentiality being the main purpose of this block chain concept, we can say that the bet is successful.

Moreover, by allowing to remove the transactional outputs spent, Mimblewimble proves rather scalable when compared to Monero and Zcash, whose confidential transactions occupy a substantial place. Because of its range proof, each unspent transaction output weighs about 5 kb and each transaction made adds 100 bytes to the overall burden because of its core. If we refer to the current level of use of Bitcoin (60 million UTXO, 370 million transactions),this amounts to a total size of 337GB of data, which is reasonable. This massive reduction in the size of the block chain is particularly useful for newcomers who sync to the network.

To achieve this result of a chain of blocks that is both confidential and scalable, Mimblewimble gives up some useful Bitcoin capabilities. First, Mimblewimble sacrifices transaction programmability. Indeed, Bitcoin uses a script system to validate the expense of transactional outputs, which allows the programming of smart contracts. Mimblewimble does not offer this possibility: no script intervenes at any time. However, according to Andrew Poelstrascriptless scripts can be set up using ingenious multi-type processes: scripts would then not be performed on the machines of the network nodes but on those of the actors concerned.

The second feature sacrificed by Mimblewimble is offline payment. In the protocol, there is no address and the construction of transactions must be done by the interaction of both parties. This impacts the user’s experience but also its privacy because the user must reveal his IP address in the process. However, it is possible to mitigate this last problem by implementing solutions like Dandelion.

 

Grin and Beam, mimblewimble’s two implementations

 

There are currently two protocol implementations of Mimblewimble. The first, Grin, is the “original” implementation and its launch took place on January 15, 2019. This is a lightweight implementation of Mimblewimble in the sense that it offers the minimum of functionality.

The second implementation of Mimblewimble, called Beam,is much more recent in its development (mid-2018). The launch of its block chain took place on January 3, 2019. Unlike Grin, Beam has additional features such as time locks or auditable wallets.

The main difference between these two projects is their philosophy.
Grin is based on a very pronounced cypherpunk component: the project was developed in open source for several years, by various developers, many of whom remain anonymous.
Beam has a more commercial base: the project is much more recent, it is developed by a well-identified team and has a very own website promoting it.

On the monetary policy side, the two protocols have two different strategies. Grin adopts an inflationary policy: the number of tokens is infinite and 60 are created each block. This means that it will take 100 years to have a monetary issue rate of less than 1%. This is why Grin will not be intended to become a reserve of value, but rather a confidential exchange tool.

Beam, on the other hand, resumes Bitcoin’s deflationary policy by halving the issuance of new tokens every 4 years: after one year at 100 BEAM per block, it will increase to 50 BEAM per block in 2020, then to 25 BEAM per block in 2024, etc. As a result, the total offer of tokens is limited to 262,800,000 BEAM. However, unlike Bitcoin, a cash system is set up to capture 20% of the money issue in the first 5 years: it aims to finance the foundation, the first investors and the project development team.

In the end, although they are both Mimblewimble implementations, the Grin and Beam projects differ in many ways, notably in their philosophy. Here is a summary of the technical properties of these projects.

MimbleWimbleGrinBeam
Launch date15/01/201903/01/2019
LanguageRustC++
Consensus methodProof of work: Cuckoo cycles (Cuckatoo31, Cuckaroo29)Proof of work: Equihash modified
Block time1 minute1 minute
Monetary issueInfinite: 60 GRIN / blockLimited to 262,800,000 BEAM
Distribution of new tokens100% to minersThe first 5 years: 80% for miners, 20% for cash (foundation, developers, investors); then 100% to minors

Sources: Some images and informations are taken from https://www.nichanank.com/blog/2019/1/29/privacy-in-crypto-intro-to-mimblewimble-amp-grin 

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