Over the past few months, there has been a lot of talk about scaling Bitcoin. As most cryptocurrency enthusiasts have noticed, scaling the Bitcoin network has proven to be quite a challenge. Mimblewimble is one of the potential solutions to this problem, and it was introduced a few months ago. It is time to take a closer look at what Mimblewimble entails exactly, and how it will address Bitcoin scalability issues moving forward.
Understanding The Mimblewimble Concept
In brief, Mimblewimble is a solution to create a blockchain-based ledger that is rather different from Bitcoin as we know it today. To be more specific, Mimblewimble can be implemented as a sidechain, or even introduced in Bitcoin itself through a soft fork. However, this latter option has some limitations to take into account, which we will get to in a bit.
A transaction in the Mimblewimble blockchain would consist of inputs, outputs, or excess (the difference between outputs and inputs, plus a signature). This is slightly different from Bitcoin transactions, where old outputs sign new outputs. Moreover, Bitcoin outputs contain script pubkeys, which are independent of each other. Mimblewimble transactions are inherently scriptless.
Validating transactions will make or break the Mimblewimble project. On paper, the concept looks solid, as the total input amount is equal to the total output amount of all transactions. Moreover, the owner of the input needs to sign off on a transfer, similar to how all Bitcoin transactions are signed. Additionally, Mimblewimble TX IDs committed to a block cannot be reversed, that is unless enough work is put into the process of rewriting the block and all of its descendants.
This is where things become very different from Bitcoin rather quickly. Unlike the popular cryptocurrency, where the exact history of all transfers is publicly verifiable, that will not necessarily be the case for Mimblewimble. Do not confuse this concept by thinking users can “hide” transactions on the blockchain, though. A portion of every transaction, such as the excesses, may not necessarily be visible to everyone.
Moreover, the Mimblewimble blockchain would effectively allow for cutting out middle transactions. As a result, a lot of historical data as compressed, resulting in faster blockchain syncing and less hard drive space requirements. Compared to Bitcoin’s blockchain, containing several dozen gigabytes of data, a more compressed solution may be favorable. The developers refer to this scenario as “scaling with how much the system is being used, rather than how long it has been going”. An intriguing concept, that much is certain.
Despite some of the advantages offered by Mimblewimble, there are still a few challenges to overcome The biggest hurdle is how this solution is not compatible with bitcoin’s scripting language. Integrating Mimblewimble in Bitcoin right now would remove all of these new features. Moreover, the current version of this project does not allow for micropayments or smart contracts. It is more likely Mimblewimble will be implemented in an altcoin, although one never knows which solutions developers may come up with.
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