This January has finally seen mainnet launches of two implementations of the novel MimbleWimble privacy-focussed payment protocol come to fruition. MimbleWimble was first introduced to the crypto-community back in 2016, when the protocol was outlined in a pseudonymous paper shared on the bitcoin-wizards IRC channel. The paper was submitted by a user known as Tom Elvis Jedusor, who promptly logged off after dropping a tor link to the document. [1]
The last few years have seen a great deal of research focussed on improving privacy features within Bitcoin and the wider world of cryptocurrencies, to tackle the distinct lack of anonymity and resultant fungibility concerns present in many existing cryptocurrencies. The UTXO based model used in Bitcoin has privacy failings related to the public nature of both addresses and transaction inputs and outputs. As a result, this has been an area of focus for a number of talented researchers and has resulted in some fascinating applications of cryptography to tackle the issue. Early iterations included centralised mixing services, but these have various inherent limitations. In the last few years, more promising developments include enhanced implementations of CoinJoin and Confidential Transactions (CT).[2][3]
MimbleWimble maintains the UTXO model, but no addresses or transaction amounts are included on the blockchain. Instead, a confidential transaction model is used by which the validity of a transaction can be verified cryptographically, without divulging information on the contents of said transaction. This is achieved through what is known as a Pedersen Commitment, using a form of zero-knowledge proof in place of transaction inputs and outputs. Confidential transactions have been an area of focus for the team at Blockstream, and last year they released the final version of a paper outlining an enhancement to the original Confidential
