Based on blockchain technology, most cryptocurrencies have an open and public ledger of transactions. While this is required for these systems to work, it comes with a significant downside: Privacy is often quite limited. Analytics companies and other interested parties — let’s call them “spies” — have ways to analyze the public blockchains and peer-to-peer networks of cryptocurrencies like Bitcoin, to cluster addresses and tie them to IP addresses or other identifying information.
Still, unsatisfied with Bitcoin’s privacy potential, several cryptocurrency projects have launched with the specific goal to improve on Bitcoin’s privacy features over the years. And not without success. Several of these “privacycoins” are among the most popular cryptocurrencies on the market today, with four of them taking top-50 spots in coin market capitalization rankings.
That said, Bitcoin does have some privacy features which, as this month’s cover story[1] details, have been improving in recent months and are set to further improve in the near future. This miniseries compares different privacycoins to the privacy offered by Bitcoin and to the privacy offered by other privacycoins.
In part 5: The upcoming Mimblewimble implementations Grin and Beam
Background
In the summer of 2016, a person under the pseudonym “Tom Elvis Jedusor” (the evil wizard Voldemort’s real name in the French Harry Potter novels) published a white paper[2], to be mysteriously dropped in a Bitcoin research chat channel. In it, he described a proposal called “Mimblewimble” (a reference to a Harry Potter spell), which presented a radical slimming-down of the Bitcoin protocol.
Now, two years later, two projects are close to realizing versions of the Mimblewimble protocol, which will be launched as separate cryptocurrencies.
The first project is developed by a group of mostly pseudonymous volunteer contributors, several of which are using Harry Potter-related screen
