Beam: The Only Way To Ensure Anonymity & Confidentiality In Your Transactions.

cxxxv (15)in #crypto • 6 years ago (edited)

Preface

Since the Advent of Bitcoin in 2008, there has been thousands of projects released in the field of cryptocurrencies and blockchain based systems.

To ensure the transactions' privacy, many cryptocurrencies like Bitcoin uses nodes and miners to avoid the use of a centralized system in which transaction details can be accessed by anyone.

Despite these precautions, many cryptocurrencies fails because there are still leaks of information about transactions like amount transacted, date, time, past transactions and other information leading to the identity of the participants in the transaction.

It is a basic need for people to want to store their money and perform their transactions in a secure manner without worrying about intrusion into their privacy that lead to the development of an anonymous store-of-value coin called Beam

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What Is Beam?

Beam is a new private cryptocurrency geared towards ensuring utmost confidentiality during transaction. No knowledge of the interaction between the transaction's participants is stored on the blockchain.

Beam can be used in the day-to-day transactions of an individual, small businesses, and big companies.

Beam utilizes the following means to safeguard privacy of transactions.

• Users decides the distribution of information.

• The transactions are expected to confidential, therefore users are not penalized for hiding transaction details.

• Mimblewindle is used to ensure superior scalability to produce a system that is both fast and efficient.

What Can Beam do?

• Ensures users transactions are both secure and fast.

• Ensures both sender's and receiver's addresses are stored on the blockchain.

• Ensures users decides what is available and to which parties.

• Ensures values involved in the transaction are kept private.

• Ensures all transaction types are possible on the blockchain in a safe and secure manner.

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The Security Problem

Bitcoin like most cryptocurrencies store all financial information on a public database called the blockchain where if relentless enough, a person could access confidential information about both present and past transactions.

Just storing all these details about these transactions on the blockchain makes it bulky. When you add security measures to protect these information, the blockchain becomes slow and ineffective. This problem will keep increasing as more and more transactions are made on the blockchain everyday with new users adopting the usage of cryptocurrencies daily.

The Beam Solution

Beam uses Mimblewindle to ensure private transactions that does not involves centralized system like the blockchain.

By using relay nodes to make combined transactions without interaction thereby ensuring the safety of users information. This is truly an exemplary system.

Mimblewindle: How Does It Work?

Mimblewindle is a protocol published by an anonymous author in 2016. And it really solves all the problems involving the insecure and bulky centralized blockchain problem.

Confidential Transactions

These are implemented by using a cryptographic commitment scheme with "hiding and binding" as it's core properties. There is a secret key that only the participants of the transaction know which reveals proves the commitment made in the transaction is binding, and the secret key is unknown until the time comes.

Transactions Cut - Through

A block consists of a list of transactions, each with its lists of inputs and outputs. On the other hand, a block can also be seen as one large transaction, allowing the merging of all intermediate outputs both with a single block as well as across multiple blocks. By extending this process to the entire chain, a system which only store current transactions states instead of the entire transaction history is established.

Ownership of transaction states can only be verified with value and the unique blinding factor, there is no need to store addresses on the blockchain. Only the commitment is stored on the blockchain, this ensures that any attack aimed at retrieving private information is futile as the information doesn't exist on the blockchain.

More information about Mimblewindle protocol are reviewed in the Mimblewindle Paper and the Beam Position Paper.

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Beam Use-Case

Case 1

Sam runs a market online selling virtual items. He accepts cryptocurrencies as payment for purchases. He struggles with the need to keep his transactions with his customers private especially from his competitors who could use it against him.

He complained to a friend who introduced him to Beam and now Sam can rest easy knowing all his transactions are now 100% secure

Case 2

Max just bought a company called Hades inc. He discovered the company uses cryptocurrencies in almost all it's transactions. After reviewing, he discovered all the previous transactions details are all on the blockchain available for anybody to access.

After a thorough research to find the solution to this privacy problem, he found a forum online that introduced him to Beam. And with Beam, Max new company has become well known for their superior security for private transactions.

Summary

Using Mimblewindle, Beam has perfected a way to ensure transactions between two or more parties are inaccessible to non participants. The removal of value and addresses in transactions details has lead to a system that is as fast as it is efficient.