In what could be a significant milestone in the history of bitcoin, an anonymous cryptographer who has taken on a pseudonym based on the popular Harry Potter fantasy series has stepped forward with a proposal that could mean the end of bitcoin’s biggest problems.
Despite the references to the fantasy series, “Mimblewimble” contains some of bitcoin’s most sought after solutions that address two of its greatest shortcomings.
The author refers to himself as “Tom Elvis Jedusor” (Voldemort’s name in the French edition of the Harry Potter novels).
His proposal has managed to turn more than a few heads as experts have begun seeing the real implications of the proposal.
Bitcoin developers are certain that within the proposal lies the key to achieving their long-term privacy goals without compromising on scalability.
While Mimblewimble may still need a lot of development to be better suited to the current bitcoin system, there is no doubt that the proposal has unlocked a viable avenue.
The Scalability and Security Compromise
Bitcoin developers have been looking for ways to find a compromise between scalability and security.
Despite the recent scaling that has seen the platform rise from 7 transactions per second to Visa-grade payment channels, there is still a lot of room for improvement.
Mimblewimble has so far presented the best alternative way to scale down the blockchain.
While the current bitcoin system requires the users to download the entire transaction history for verification purposes, Mimblewimble proposes the elimination of the middle transactions in order to reduce the amount of data.
This does not necessarily mean that the transaction data from every block is lost when a blockchain is synced – the data is compressed a great deal to facilitate the downscaling of the blockchain.
In doing this, Mimblewimble will effectively minimize the use of the system in a move that the experts have termed “more than just better scaling.”
On the privacy front, because the bitcoin blockchain is an open ledger, it has always been the reason many businesses shy off from the platform altogether.
Parties that wish to keep their financial information private are not able to since the open ledger allows anyone to read and write.
Before Mimblewimble, most privacy proposals often came with a compromise that affected the scalability of the system negatively.
This is because one of the notable disadvantages of Confidential Transactions is the sizeable amount of data its transactions come with.
Although the methods would have been effective in creating a more secure bitcoin system, the multi-kilobyte transaction proofs would bulk up the system drastically.
Mimblewimble went as far as to point out that van Saberhagen signatures potentially cannot be erased since there is no way of knowing when they are spent.
To tackle the problem of bitcoin privacy while maintaining a relatively scaled down blockchain, Mimblewimble proposes the use of a combination of the two older methods: Confidential Transactions and Signature Aggregation.
Signature aggregation on its own facilitates the cramming of all the signatures from a block into one signature. Potentially, this promises to do more than maintain the size of the blockchain in terms of scaling.
On the other hand, Confidential Transaction limits the accessibility of the transaction amounts to the sender and the recipient, thereby improving privacy.
What Mimblewimble brings to the table is a working combination of the two cryptographic techniques in a bid to create a more private bitcoin system.
Not only will it facilitate the aggregation of signatures in a single block into one, but the package also promises to bring with it the much-needed privacy benefits that most businesses desire.
The Way Forward for Mimblewimble
Mimblewimble has stirred much excitement among the bitcoin developers such that there is a probable reason to expect a presentation in the upcoming Scaling Bitcoin conference to be held in Milan.
Despite the excitement, however, there are still a few major kinks to be ironed out before Mimblewimble can be implemented onto the current bitcoin system.
One of its major shortcomings is that Mimblewimble is not compatible with the scripting language that the bitcoin system is currently using.
As it is, the proposal does not take into consideration the numerous features within the current system.
The proposal is only suited to work on a simpler platform that is solely focused on direct transactions without the additional features and upgrades of the current bitcoin system.
Nevertheless, developers are confident that there are a number of ways Mimblewimble could be deployed to suit the current system.
The insightful proposal has opened a floodgate of ideas that could soon mean a revolutionary optimization of bitcoin.