What is Mimblewimble?

A word that you hear in the Cryptocurrency Ecosystem lately and the topic of many conversations is Mimblewimble.

In the world of Harry Potter, Mimblewimble is a tongue-tying curse that causes the opponent to speak incoherently without the ability to cast a spell or say incantations.

How is that applied to Cryptocurrencies? Well, so happens Mimblewimble was the name chosen for a newly trending protocol that depends on secure Cryptographic primitives. These secure Cryptographic primitives are rudimentary in providing a robust framework for the blockchain to achieve scalability, fungibility, and privacy.

How does Mimblewimble work?

Mimblewimble uses about 10% of the storage on the blockchain that Bitcoin transactions do, making it exceedingly scalable, allowing for faster transactions, and less centralized than Bitcoin. Additionally, this protocol makes for privacy and extremely anonymous transactions.

How does it use much less storage space on the blockchain? Mimblewimble protocol requires no address storage on the blockchain and shorter keys. The protocol used is called elliptic-curve cryptography, extensively tested for decades.

Harry Potter fans will be excited with another reference when the Mimblewimble Whitepaper, published to the Bitcoin research channel in 2016. An anonymous author by the name of  Tom Elvis Judisor – the French name for Voldemort submitted the Mimblewimble Whitepaper.

Remember the owner of the invisible cloak in Harry Potter? Shortly after the Mimblewimble Whitepaper was published, another anonymous user adopting the false name “Ignotus Peverell” began a project on GitHub with the application of the Mimblewimble protocol. This project, called Grin, released its mainnet on January 15, 2019. Recall, the owner of the invisible cloak, was one Ignotus Peverell.

USD VS Bitcoin transaction comparison:

First, let’s examine Bitcoin’s UTXO (unspent transaction output) model and paying in USD fiat.

Erline: -1 USD

Gail: +1 USD

On the Bitcoin network, it would not look the same since BTC transactions consist of several inputs and outputs going from the sender to the receiver. Checking a BTC transaction on the blockchain, you will notice several inputs and outputs done on one transaction from your address.

On the Bitcoin network, exchanging a Bitcoin would look like this: Gail wants to send 1 BTC to Erline. Here, merely deducting one Bitcoin from Gail’s wallet would show instead, the network bundling up multiple inputs from previous BTC transactions that were sent to Gail to equalize the one coin Gail sends to Erline. Therefore, this Bitcoin (UTXO transaction could look like this:

Gail: – (0.1+0.25+0.35+0.3) BTC where A+B+C+D are all inputs added up

Erline: + 1 BTC

The example shows Gail’s 1 BTC consisted of four inputs. In some cases in the Bitcoin network, one transaction has hundreds of inputs. Additionally, if the sum of the inputs is greater than the transaction amount, the transfer will create yet another output. Resulting in the first output, including the exact amount that will go to the receiver, and the rest returned to the sender. Every transaction must be individually signed by wallet software, burdening the network with massive amounts of data to process. The whole process is very inefficient.

Mimblewimble!!:

As we read above, the Mimblewimble protocol offers a much more efficient system eliminating inputs and outputs. One Multisignature replaces the UTXO model, and all inputs and outputs called Confidential Transactions. If Alice wants to send Bob a coin, both Alice and Bob create a multi-signature key that verifies the transaction.

Confidential Transactions use the “Pedersen Commitment scheme,” using no addresses. The project uses something called a “blinding factor” for the inputs and outputs along with both parties’ public and private keys. Resulting in the transaction done “in secret” between the two parties engaged in the trade, and only they know the details. This blinding factor makes and keeps privacy very high in the network.

How does The Pedersen Commitment scheme work?

Full nodes deduct encrypted amounts from inputs and outputs. The process creates balanced equations proving no coins produced and added fraudulently. Even the node is unaware of the actual value of the transaction during the whole process.

Mimblewimble protocol verification requires only to ensure no new coins have been created in this process, and that the parties taking part in the transaction have ownership of their keys. Both verification processes use the blinding factor to ensure privacy in operation.

An example:

  1. 5+5=10 — 5+5-10=0

The example shows that no new coins were created – indicating the net balance is zero.

  1. 5(10)+5(10)=10(10)

Using (10) as the secret number above – this blinding factor – is added to the calculation, then multiplied by all variables. Using it in this way to obscure the original values.

  1. 50+50=100

This 3rd step shows that when multiplied by 10 (the secret number in the second equation), the values remain private while still allowing others to verify that no new coins were created in the transaction.

In Mimblewimble, the blinding factor is a combination of the public and private keys. This process proves that no new coins are added and both parties can prove ownership of their keys.

At the completion, both parties are given a miltisignature header, which consists of all the inputs and outputs of the transactions that were merged.

What is “Cut-Through?”

A single block using UTXO protocol consists of hundreds of transactions and data that needs storing on the blockchain. Instead, using Mimblewimble’s Cut Through feature, this data is compressed, and most data used in the UTXO protocol will is removed without the risk of the security of the blockchain.

Example:

  1. Gail sends 1 BTC to Erline.
  2. Erline sends 1 BTC to David.

This typical block has two UTXOs—the first UTXO is showing the input for that 1 BTC, which reflects how it got to Gail. The output for the first UTXO is the result of that transaction; this verifies that Erline now owns the Bitcoin. The second UTXO shows the output of the first UTXO – which is now the input of the second UTXO – and the output of the second transaction to David.

Mimblewimble eliminates the output of the first transaction and the input of the second transaction. That leaves only one input and one output – verifying how Gail got this 1 Bitcoin and how David received their 1 BTC -, instead of having two of each.

This compression results in decreasing the size of the blockchain, making Mimblewimble much lighter and faster in data storage.

https://www.mycryptopedia.com/mimblewimble-explained/

In addition, it can be proven that no new funds were created from thin air through the summation of the number of inputs and outputs which should always cancel out. Due to the cut-through feature, it means that a Mimblewimble block may simply only contain:

  • A block header
  • The list of inputs remaining after cut-through
  • The list of outputs remaining after cut-through
  • The transaction kernel
  • Kernel offset

What is a Kernel offset? – A kernel offset is a blinding factor that is included in a block to prevent it from being reconstructed by malicious actors.

Mimblewimble & CoinJoin

https://www.mycryptopedia.com/mimblewimble-explained/

…Mimblewimble transactions also leverage another piece of cryptographic innovation known as CoinJoin. Proposed by Gregory Maxwell, CoinJoin is a mechanism by which payments from multiple spenders are combined to form a single transaction, thus making it difficult for an outside party to determine which payment was intended for which recipient.

Currently, Mimblewimble can only be integrated into the Bitcoin network as a soft fork or as a sidechain. On this sidechain, users would be able to move bitcoins onto it and transact with an increased level of privacy...

Through the use of cryptographic innovations such as confidential transactions, CoinJoin, and the cut-through feature, Mimblewimble offers a strong scaling solution, as well as an increased level of privacy...

About the author

Gail holds one of the most challenging role in the Compumatrix Leadership: Membership. She ensures that that members and potential members enjoy the benefits of being part of the Compumatrix community.

Comments

  1. I really do not understand this whole blog post by Gail — but I am going to read and re-read and hopefully over time will come to better understanding — but it appears the gist of the post is that with this type of transactions there seems to be better security and a safer more secure way of transacting online with bitcoin. I would presume other forms of cryptocoins ?? there is a ton of information in this post, and I appreciate the effort put forth to keep trying to help all of us learn and get comfortable in our business — thank you

    1. Hi RJ. How do you eat an elephant? One bite at a time. How do you understand technical speak? one Byte at a time. I know you can grasp the idea behind Mimblewimble if you keep reading and thinking about it and how it works. Keep on keeping on hon, and you will reach that ahhhhh moment before you know it!! I love your thirst for knowledge and your commitment to learning. Kudos to you!

  2. I’m not only dazzled by this new blockchain protocol, but completely befuddled, I admit! I understand that Mimblewimble not only cuts down on data storage, but also creates greater privacy for the Bitcoin holders with every transaction. It seems to add another level of anonymity, which is always an excellent prospect for the cryptocurrency world! As with all that I’ve come to learn about cryptocurrency, it will take some re-reads to fully digest all the details about this information. Thanks for keeping us up to speed, Gail!

    1. Hi Zora, yes, it is a bit deep, and I guess mind-blowing too. I think it is good to be at least introduced to the technology so we won’t be entirely in the dark when someone asks us about some of these things. We may not be able to explain it entirely, but at least we are somewhat familiar, and we won’t look like the deer in the headlights. lol

  3. Yes, this is deep. But all protocol and platforms depend on constant new technology to put them out in front of the herd so to speak. If you want to be number one and lead in innovation, you have to have great developers that keep their minds open and sharp so they can create newer and better ideas and ways of doing things for all of us to use. Thank goodness the devs at Compumatrix work hard to bring us the best products!

    1. Im feeling a bit mimblewhindled after reading that blog. Unfortunately, im not sure if, after reading this mimblewaaaa something, will benefit BTC and other cryptocurrency or will it be a compliment? Anything to help garnet mass adoption would help our businesses. Ease of use, more decentralized attributes and mass adoption is the key. If this protocol can help by rounding the gamut, then maybe it will be a player. Keep the new mimblewhindled education coming.

  4. If you were to ask me to describe what is Mimblewimble in two words , I’d say>> It’s Complicated . Thanks to Satoshi Nakamoto used open source coding, it lets other developers to code and modify without affecting the original base core of the blockchain . In this case a protocol which improve the privacy, fungibility, and scalability ; being an alternative Proof of Work implementation.
    Note: After writing this comment I realize its very similar to Ivy’s post where she describes of newer and better ideas thru great developers. I feel we both had the same feeling in mind and No plagiarism was intended.

  5. Gail, this is a very interesting post. Not being a follower of Harry Potter, I had never heard of Mimblewimble. One thing for sure it is a tongue-tying curse.It sounds as if this will be a much faster albeit a complicated system in transferring and depositing our future earnings of BTC. Lucky we do not have to do all the figuring out LOL.

  6. thank you Gail for the acknowledgement and thought — and yes I will continue to read more as we go and keep getting more info into the business end — I am not a tech guy at all seriously — but I will continue to put forth effort into grasping and operating the business at hand — this is fascinating at the very minimum –fact — and when I was a kid and had to learn how to cut a side of beef –it was wow and then I learned to cut it — of course now I would have to go back and learn again because its been 35 years since I cut one –lol great help and great effort on your part Also ms. Gail —

  7. Wow! Now that is one post that should not be read right before going to bed. I think this is one that will keep the mind occupied for hours and hours. There is so much information to digest but is so well laid out that understanding does gleam through the fog once read several times. For some, who are non-trader or non-techie, it is a lot to chew at one time. The biggest and tastiest piece of this “elephant” was the part that tells me this will improve privacy. Privacy is like music to the human ear, especially in today’s internet world.

    According to an article in Security Today, there are three major concerns when online which is where most of us do our work daily. The threat of snooping, spying, and the mishandling of information by a number of trackers for various purposes is unnerving, to say the least.
    .

  8. Thank you Gail. Love the Harry Potter connections with Mimblewimble. I have to admit, I don’t remember this from the movies or books, so might have to go back re-watch or re-read. But it is fun connection. I am always, always learning about the blockchain and am grateful for these explanatory posts. Although some of still baffles and befuddles me, I gain from each one. This new protocol seems to improve privacy — always good and use less resource — also good. Thanks for the continuing education and enlightenment.

  9. I am not as technically savvy as Gail is. The way I understood in one read is that Mimblewimble protocol is mainly for P2P transactions. It may not be for withdrawal to our external wallet. Please correct me if what I understood is wrong. As Gail rightly said, we couldn’t eat an elephant in one go. I will read it some more times before I fully understand the concept. Congrats Gail, you are not only a top blogger here but also the only technical blogger as well.

    Hi, Krish, actually Mimblewimble was created for more than P2P. In P2P, you would not need it, in my opinion, because the trade itself, when done P2P, is already private. P2P is person to person so that they wouldn’t use an exchange. Just an agreed-on price or value for trade between two parties.

  10. This article took me a couple of reads to understand, but I think I am close to grasping it. I think it is good; a new process has been created to eliminate the unnecessary inputs and outputs to just leave the one input and one output to make the transaction successful. With the improved amounts of data storage that mimblewimble has created will new processes or improvements be able to be produced? The world of Bitcoin is constantly innovating and I think this new process is a huge step in the future advancements we will be seeing.

  11. Mimblewimble for me translates to Mumbojumbo BUT that is entirely something that I need to work on to change back to the Harry Potter reference. Again like all the new things I am reading I have realized to take it step by step and apply it to my personal situation. I concur with all the above posts that anything that increases our privacy is definitely a good thing that will keep our Compumatrix investment and usage safer!

  12. Wow, I am impressed by this blog. I have read all the Harry Potter books and had no idea there was an association with the blockchain and Mimblewimble. Interesting how they managed to save storage with this technique they use. Mimblewimble will be a big help in the process, and this was in 2016 that it was introduced.

  13. One BYTE at a time – you said it right, Gail. I will have to re-read it several times. Its a Big elephant. Mimblewimble is quite a process and ideal to keep privacy of transactions done between people, while ensuring safety and security.

  14. I have read and re-read and still have long to go and that is not a bad thing it is just all or mostly new technology and ways of doing business — i am from the old school for sure and not tech savvy in any stretch but reading so many of these postings around here are such good help and reading many of these more than a few times is a good thing for me — learning and learning some more–

  15. What a great and informational post Gail. That something could actually be a soft fork and right along side of Bitcoin’s blockchain is so fascinating to me. I never knew about all that you have posted here. It is so encouraging to see all of the “spring-boarding” that is happening in the world off of Bitcoins blockchain foundation. This is only the beginning. I love all this don’t you ?

  16. I agree with Janis, with the first read it is somewhat MumboJumbo! Excellent blog Gail, So much information and I’ve not heard before…I will read this many times over to really get it. But I can see how the Mimblewimble compression protocol will cut down on the inputs and outputs and make the process more efficient and secure. I didn’t understand what Fungibility meant, on the Coinjoin page it explains it as: “Fungibility is a concept that describes a good or commodity whose individual units are directly interchangeable. For example, the U.S. dollar can be described as being fungible because one U.S. dollar is directly interchangeable for another U.S. dollar.” Very informational read Gail!

  17. I want to thank Erline for posting in Compumatrix discord the link which explains what is MimbleWimble.
    After watching a video, I understood how MW contributes to privacy by cutting private information and reduces space by eliminating addresses and reducing actual transactions within the blocks that conform the blockchain, without affecting the security of participants.
    What I do not like is that it does not allow atomic swap and lightning network which for me is helpful tools in making crypto ecosystem more efficient
    Grin, which is mentioned in the video uses MW and for more information can be found online.

    please don’t put live links in your comments.

  18. Well, I am so grateful I do not actually need to know what the heck is going on. I basically understand the use of the word MimbleWimble here and that is about it. That is what I love about Cryptocurrency and the workings of the blockchain and other methods, I just have to press “Enter” on my keyboard and like magic, my transaction is done! Now, where did I put my wand?

  19. This article is super exciting to me because it speaks of yet another breakthrough in blockchain technology. By the way, it is just plain old fun to say the word Mimblewimble! LOL

    This breakthrough has the potential to significantly increase the adoption of cryptocurrency by the masses in the future. I will need to read this info several times before I can understand more of it better, but I love what I already understand about it. I don’t mind sharing that I cheated a little bit by watching the YouTube video about Mimblewimble that Gail posted in Discord before I read this great article. That helped me a lot.

  20. OH, I’m glad you DID watch it, Kevin! Erline mentioned to me that she watched it and it was excellent, and we decided to post it as a companion to this blog. Whatever it takes to make the subject matter clearer and help folks to understand. Will they be a programmer because they read this? Doubtful, but at least it broadens their knowledge and puts them at ease when they hear someone talking about it.

  21. I have read the article more than a few times, and will watch the video but haven’t gotten there yet. Great blog Gail, I like these types of articles to explain how these transactions work, some of it still goes over my head, but it’s very interesting. Sounds like Mimblewimble with its Cut Through Feature will cut out the extra inputs and outputs in the process which will make it more efficient and lighter and faster in data storage, plus with more privacy and anonymous transactions. Off to the video to get more to sink in…

  22. have to agree with Kevin it is fun to say mimblewimble — but it is even more exciting to think that with some more time and effort like Cathryn has said — not there yet but am getting closer — with more videos and more reading and more time in general so much of the curveballs or knuckleballs from a time gone by with more effort and more practice they become hittable as does Bitcoin becomes workable and business can become successful — hope rjh

  23. i am still in awe of the amount of information is in this posting by Gail — and i also realize that part of the good of mimwim is that fact that is seems to simplify individual transaction and also at same time because you are not having to utilize the whole world of channels in the crypto world you actually make it safer by just utilizing the individual me to you concept — as long as you don’t create anything new or different then the rest of cyber crypto world doesn’t know it happened ??? I think that i may be close to that perception ???

  24. I think it would be great if Mimblewimble was able to work with the Compumatrix platform. The main thing that separates Mimblewimble from any other altcoin is its ability to process transactions faster than bitcoin while also maintaining security and privacy. Hopefully this new compression strategy will make all cryptocurrencies use smaller data storage and work much faster. This blog took a lot of rereading, but it is always good to be introduced to new concepts.

  25. Mimblewimble – enter the world of Harry Potter where Harry Potter merges with bitcoin (cryptocurrencies) to create a newly trending protocol! Excellent for the Harry Potter/Bitcoin fan! What separates Mimblewimble from everything else is its privacy features: no address, no tracking (IP), and new signatures for each transaction combining the sender and the receiver!

  26. that is what i see as i read this again — the fact the process cuts out many small traceable transactions and for a lack of better way saying cuts out many middle men this protocol is and will be i would think a much better way to do business in this day and age — I like secure and safe transactions and will keep reading this more and more but it is getting clearer with each read — thanks Gail for great info —

  27. Hi Sophye, read your post about mumbo-jumbo. well, it will take me a few more reads before I understand it fully but did make out that it was further improvement in the speed at which the transactions will take place. Total privacy, secure and safe transactions made possible by this novel protocol is encouraging. I will re-read several times and hope finally the elephant will get eaten one byte at a time. Thanks.

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