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In the cryptocurrency industry, it’s difficult to ensure blockchain privacy and fungibility without compromising on bandwidth. Privacy-enhancing upgrades such as zk-SNARKs and so-called “confidential” transactions tend to reduce bandwidth and increase costs. Mimblewimble, an alternative blockchain, promises to solve these problems. Since its inception in 2016, developers and researchers from various blockchain projects have participated in the development of Mimblewimble.
Named after a tongue-tying curse in the Harry Potter series, Mimblewimble is a blockchain protocol that allows cryptocurrency transactions to remain anonymous. By keeping addresses and transactions confidential and minimizing block space, opaque (fully private) yet verifiable transactions can be created. Mimblewimble makes use of confidential transactions (CTs) and one-way aggregate signatures (OWAS) to create a system with better privacy and greater scalability than protocols like Bitcoin. CTs let users hide transaction amounts so that only the sender and recipient know how much has been sent.
Originally proposed as a sidechain or “soft fork” for Bitcoin, Mimblewimble currently serves as the base layer of new cryptocurrencies that have created blockchains, such as Grin, Beam and MimbleWimbleCoin (MWC).
With Mimblewimble, it’s possible to sign and validate transactions without having to validate each historical transaction, or include the inputs of a transaction in the hash of a new one. This drastically reduces the overall size of its blockchain.