On January 15, the Grin mainnet went live, and it’s captured the attention from supporters and speculators across the space since. One of the pioneers behind MimbleWimble tech, Grin’s unwavering focus to privacy and scalability has presented a fresh project and point of interest for enthusiasts to observe.
Just two days after launch, Theymos announced that Grin was to be accepted for Bitcointalk forum payments, the first currency beyond Bitcoin to achieve this status. With the support of several other longstanding community members, word of this project spread like wildfire. When it first hit exchanges, GRIN was trading at over US$250 per coin. After retracing significantly to the US$3-4 mark, it’s started climbing once more, up almost 300% this week with a current price of $13 per coin, setting the market cap to roughly US$13 million at time of writing.
What is Grin?
To get an idea of what exactly Grin is, a good place to start is the comprehensive list of everything Grin is not. For those looking, a few objects in the list probably stick out as peculiar: no addresses, no transaction history, no fixed supply, among others. Obviously, Grin is quite different from many of the other projects in the space. But how, exactly, can Grin function as a cryptocurrency without any of these seemingly key components?
MimbleWimble, a concept introduced in 2016 by Tom Elvis Jedusor, drawing inspiration from Greg Maxwell’s proposed confidential transactions, acts as a stripped-down blockchain alternative that promotes maximum privacy and scalability, eliminating bloat in all other capacities. Unlike Bitcoin, whose transactions are stored forever, Grin’s implementation of MimbleWimble indicates that transactions are forgotten after they’ve been confirmed by miners.
The way transactions are confirmed is akin to the practice of an accountant calculating costs and revenue. Rather than miners broadcasting that a transaction took place- and the participants involved, they simply confirm that the sends and receives of peers in the network maintain zero sum. If I announce that I’ve sent 100 Grin, and you announce that you’ve received 100 Grin, the sum of activity is zero (-100 + 100) and thus kosher. That transaction is then forgotten forever. Beyond erasing transactions, privacy is maximized by routing transactions privately across peers before announcing publicly to the network. Nobody can see that I sent you 100 Grin, as it was essentially “tumbled” before it got to you.
Instead of addresses, payments are sent as file transfers to HTTP or IP locations. By spoofing IP addresses, users can further promote their privacy. What does this look like? No senders, no recipients, no transactions, no amounts. Grin is arguably the most private cryptocurrency to date.
While Grin features some novel innovations, the tokenomics suggest this project may be more for hobbyists and adopters, rather than speculators. The main drawback for traders is the emission schedule for Grin. On average, one Grin is mined every second. This reward will not be reduced or halved at any point in the future. As such, there is an infinite maximum supply. In its first days of mainnet, this also means that the inflation rate is massive. At time of writing, the current rate of inflation is approximately 8% daily. Of course, as the supply increase, the relative inflation will continue to decrease, but until months down the road, the supply will continue to increase at a massive rate.
On the other hand, altcoin purists will appreciate that Grin is an open source project with no leader, no pre-mine, and no ICO. Developers may receive donations from the community, but everything takes place on a voluntary basis. This may be seen as a hurdle to overcome for adoption, with no fund to promote adoption in terms of acceptance by different merchants and service providers or listing on exchanges.
Because of the implementation of MimbleWimble, Grin acts purely as a currency. There is no scripting language or development protocol that can be used to build contracts and dApps. Whether or not this changes in the future is yet to be seen.
It’s also important to recognize that Grin is not the first coin to implement MimbleWimble. Although Grin development began soon after the introduction of MimbleWimble, it’s mainnet was preceded by Beam, whose mainnet launched January 3rd. Beam’s orchestration differs somewhat, it does have a development team and governance model, and it did have a coin sale, but the core sentiments of both: privacy and scalability, remains unchanged.