Beam CEO AMA on 8btc: Looking at Lightning, Aim to Make Beam into Top 5 Cryptocurrency
The first two Mimblewimble implementations – Beam and Grin have been receiving significant attention. As the most talked about privacy-oriented cryptocurrencies these days, the latecomers Beam and Grin are seen by some as the biggest competitor to Monero, the best-known privacy coin with the largest market cap.
MimbleWimble, Beam and Grin, what is the buzz all about? How does it differentiate from established privacy-centric coins like Monero and Zcash? Who will be the king of privacy coins? And what’s their position in the Asia market?
To get these straight, ChainNode (formerly 8btc Forum), the earliest and largest bitcoin community in China, invited Alexander Zaidelson, CEO of Beam to hold an online AMA (Ask Me Anything) with the Chinese crypto community on March 5. The CEO of the hot coin tells us what is Beam’s edge over Grin, what exchange will list Beam, whether Beam will adopt the popular lightning network technology…
Beam was founded in early 2018 when the team understood the potential of MimbleWimble for creating the next-gen cryptocurrency. For this goal, a team gathered together and work started in March 2018.
Beam vs other privacy coins – Monero, Zcash and Grin
Q1: Can Beam outperform other privacy coins such as Monero, Zcash and Grin? What’s Beam’s advantage over them?
Alex: Beam has superior technology over Monero and Zcash – Mimblewimble has much better scalability.
Compared to Grin, while Beam uses the same technology basis, we believe we have a better implementation that includes enhanced privacy (decoys in Dandelion), better usability (SBBS, one-sided transactions), and more scalability.
Q2: When it comes to Mimblewimble, we tend to make comparisons. The current technologies used by the mainstream privacy coins include: Monero (XMR) use ring signature, hidden address and Ring Confidential Transaction; DASH use a mix of currencies; Zcash (ZEC) use zero-knowledge encryption technology such as zk-snarks; Verge use Tor, 12P; Please comment on these privacy techs, and what are the advantages of Mimblewimble compared with them?
Alex: Mimblewimble has strong advantage over Monero and Zcash in terms of scalability. While Monero’s blockchain is 5 times bigger than BTC per transaction and Zcash is 9 times bigger, Beam blockchain is 3-5 times smaller than BTC.
That is because both Monero and Zcash are using the basic Bitcoin architecture and employ very sophisticated technology to hide information on the blockchain, making the blockchain much heavier (think of it, if Monero was the same usage as Bitcoin, its blockchain would be 1TB, and Zcash close to 2TB).
It also should be noted that in Zcash over 95% of transactions are not even private.
Dash does not have real privacy – all the information is visible to the supernodes that can be controlled by nefarious parties.
In addition, we are building a strong compliance feature set around Beam which neither Zcash, nor Monero nor Dash are doing.
Q3: The recent collaboration between Litecoin and Beam made it clear that Mimblewimble was so good, which make people think that it will be well to directly apply this technology to other established currencies, and there is no need to “reinvent the wheel”, what do you think?
Alex: Mimblewimble can be applied to existing coins such as Litecoin as a side chain or as extension blocks. This will create a system that is parallel to the main currency, and all the entry and exit points will still be visible. While it does mean improved privacy, it is still not full privacy. It will be really hard to switch an existing blockchain to Mimblewimble in full.
Q4: The crypto community has been comparing Beam with Grin for a long time. So far, the heat of Grin seems to be a little bit higher. Are you confident about your success in this competition? Where does confidence come from?
The confidence comes from our great vision and our great engineering capabilities. We have proven that we can deliver working products in very short time frames, and we will continue to do so.
And as we continue executing on our vision, I believe more and more people will realize the advantages of Beam.
Competition is a great thing, as I mentioned above, having more than one project in this space is very beneficial and generates great dialogue and exchange of ideas, as well as a motivation to move forward.
Q5: I read a report claiming the only difference between Beam and Grin is that Beam has a professional team at work. So how did the Beam team avoid creating a centralized network?
Alex: Grin also has a super professional and capable team at work, most of them are just not getting paid for it.
But there are more differences, as I state above – Beam has better and more scalable implementations of certain parts of Mimblewimble and better usability through full UI wallets and mobile wallets. We believe though Grin will eventually catch up on that.
I believe one of the main difference is our encompassing vision of creating a currency that is usable both anonymously and in a compliant way.
Regarding centralized network – the technology itself is decentralized, there is no central sever or service through which the flows are going.
And one more note on centralization vs. decentralization. I think people are sometimes confused here. Beam is a company and has a CEO, a CTO and other exacutives, and a certain decision making process. So usually whatever is decided by this group of executives is executed.
While Grin is community based and does not have a CEO or a CTO, it also has a very clear leadership team that is actually making decisions on a regular basis, and whatever is decided by this group is usually executed. So Grin (and other community projects’) decision making is usually also pretty centralized.
Beam in future: looking at Lightning, serve as confidential store of value and means of exchange
Q6: What’s the vision of Beam?
Alex: Our vision is to create an ecosystem for confidential transfer of value with optional compliance, true digital cash.
Same as in cash transactions, people can choose whether to leave paper trail for each transaction or not.
This way, we will create a currency that both individuals AND businesses can use.
On top of this, we are developing additional Confidential Assets. People will be able to trade tokenized securities, stablecoins, digital collectibles or anything else on the Beam network, with all the benefits of confidentiality, scalability and optional reporting.
Q7: Privacy coins have been hot lately, but is there a unique application scenario for it? How big is the market?
Alex: I think ALL financial activity must be private, but allow for optional compliance. Digital Cash, same as regular cash, must be confidential, but allow businesses to report. Traditional coins like Bitcoin cannot really be used in day-to-day business because everyone (customers, suppliers, competitors) will see the business’ transactions. Existing privacy coins, even if we set aside their scalability issues, are also not usable. A business will not be able to use Monero and then show it to the auditor or tax authority.
Beam offers a real solution here. So the market is really huge.
Q8: According to what you’ve said before, Beam plans to list on 20 exchanges at least this year. How’s it going?
Alex: We cannot publicly comment on progress with exchanges. We will be announcing new exchanges as they are added.
Q9: What do you think is the biggest practical application of Beam?
Alex: Eventually I would like to see Beam as both confidential store of value and means of exchange.
I want to see businesses accepting Beam as payment for things big and small. My claim is that only a currency that is CONFIDENTIAL but also offers a way to be COMPLIANT can really be used by businesses. Indeed, on one hand no business wants to disclose its transactions to everyone. On the other hand, businesses have to report their revenue and expenses to the authorities. Beam is the only digital currency project that can offer that.
Q10: Why did you choose MimbleWimble as the underlying technology for Beam?
Alex: In my view, Mimblewimble is the next generation of blockchain technology. Mimblewimble took the original Bitcoin architecture that was used by most existing cryptos, including privacy coins such as Monero and Zcash, and turned it upside down. In Mimblewimble, there are no addresses and no transaction trace is stored on the blockchain at all, making it impossible to snoop on people’s finances. Besides great privacy, Mimblewimble also offers great scalability – the blockchain size is much smaller than say in Bitcoin (3-5 times smaller), while in Monero it is 5 times bigger than Bitcoin, and in Zcash about 10 times bigger.
In addition to that, the conversational nature of Mimblewimble (i.e. the need for both sides to talk to create a transaction) allows for very interesting things, such as asking the other party to provide certain documents before closing the transaction.
When we discovered and started learning about Mimblewimble, it soon became clear that there is an opportunity to build a great coin and a great ecosystem on top of it, so we just decided to go ahead and do it. It was not that we chose Mimblewimble. It’s more like Mimblewimble chose us – it was the trigger for Beam to appear.
Q11: Scalability is an issue lots of blockchains are confronting, what does Beam deal with in this regard?
Alex: As I stated above, Mimblewimble offers great scalability in terms of blockchain size right out of the box. In Mimblewimble, the blockchain does not store the transaction history, just the current state of all the UTXOs and a set of transaction kernels that actually prove the history is valid, thus reaching blockchain size of 3-5 times smaller per transaction than Bitcoin. There is a good discussion on blockchain sizes in the article here: https://medium.com/beam-mw/whats-the-difference-between-monero-zcash-and-beam-953eafd89354
In terms of Transactions per Second, Beam’s first layer is not too fast. Currently Beam can process around 17 transactions per second. For better speed, we will need 2nd layer solutions. We are looking at Lightning as one of the options. The technology seems fascinating.
Q12: What wallets support Beam? Which wallet do you recommend?
Alex: Beam has its own beautiful wallet that can be downloaded from our website. We have also released a testnet version of our Android wallet, and we will be releasing the mainnet version in the coming weeks.
Q13: Will Beam plan to use Lightning Network technology? Do you think LN have bottlenecks?
Alex: We are looking at Lightning very seriously. I think this technology is very interesting. We have published a Lightning Position Paper recently and are considering next steps: https://medium.com/beam-mw/mimblewimble-lightning-network-e1627538aca2
I think Lightning’s main challenge is routing and true decentralization – building a “funded” route from one node to another may be challenging. One solution could be a “superhub and spoke” model where the superhubs are actually banks that provide liquidity, but that would mean certain centralization and potential for censorship.
Q14: What’s your expectation for the price of Beam?
Alex: Can’t really comment on that. We think however that if we execute well on our vision, Beam has all the reasons to be one of the top 5 cryptocurrencies.
Q15: What is the Beam team like now, how many developers, full-time or part-time, and what are the core developer strengths?)
Alex: Our team is about 30 people altogether, of whom 21 are full-time.
Core developer strengths are network and low-level programming, C++ and rigorous processes.
Q16: Beam has been launched mainnet on January 3, 2019. Can you share what you are doing now and what’s next for the technology planning?
Alex: We have published our roadmap (https://medium.com/beam-mw/mimblewimble-beam-roadmap-2019-b2c7f38fc106) and we are executing on it. We are improving the usability, scalability and strength of the protocol
Q17: It is known that Beam has received investment from 16 VCs, including Node Capital, Strategic Source Venture Capital and other Chinese funds. In the community operation, what is Beam’s plan?
Alex: We are now expanding our presence in China and in Asia in general. I understand that those markets are super important for the world of Crypto.
We had our first Beijing meetup last week, and we will have another one in about 10 days from now. We will be doing more community outreach and physical meetups in China.
Q18: Beam is based on Mimblewimble(MB), a cryptocurrency base protocol based on an elliptic curve. MB actually was born in 2016. What features of MB appeal to you?
Alex: As I mentioned above, the best features are:
- Built-in confidentiality
- Great scalability
- Conversational nature of the protocol
Q19: Both Beam and Zcash have founder rewards, where is the competitiveness? Now most people think Grin is better. What do you think about it?
Alex: Not sure how competitiveness is related to founders’ rewards. Founders rewards create funds that allow further development of the protocol which is very important.
I think Beam tech and vision are definitely not worse than Grin’s and we are working hard to make it even better. As I said, competition is great.
Issues Beam is confronting
Q20: Some people believe that Mimblewimble is not particularly strong in the privacy protection of transaction history, and some transaction history can still be recovered from the input and output pairing information across the block, which seems to be inferior to the ring signature of Monero or Zcash’s zk-snark?
Alex: I would like to see some academic proof of that statement. There is some research about traceability in Monero and in Zcash as well.
Here’s a nice article we published discussing and debunking some of the claims of linkability on Mimblewimble: https://medium.com/beam-mw/on-linkability-of-mimblewimble-da9ba71e83b4
So my short answer is no, Mimblewimble is not inferior to Zcash or Monero in terms of privacy.
Q21: Mimblewimble abandons the idea of transfer addresses, which is used by most cryptocurrencies. Each transaction is built by two parties interacting over a secure channel, meaning both must be online at the same time, this does not seem so friendly, what do you think?
Alex: Indeed, both parties are required to participate. In Beam, they don’t have to be online in the same time. We have added a system called SBBS (Secure Bulletin Board System) which allows wallets to communicate indirectly by posting messages on SBBS, without the need to be online in the same time.
Compared to other coins, some people may still see the need to come online to complete the transaction as inconvenience.
To address that, we have introduced a concept of “one-sided transaction” where one side can prepare a set of UTXOs in advance, and let the sender complete the transaction without the need for receiver to be online. More details here: https://github.com/BeamMW/beam/wiki/One-side-payments
Q22: What do you think of the view that cryptocurrencies fall into the “metaphysical” trap, which means relying on a monetary policy that is static or based on a mathematical formula that simply and artificially creates linear, nonlinear mild inflation and deflation cannot satisfy a complex and changing economic society, what do you think about it?
Alex: This is a very big philosophical and economical question. There are schools of economists that support different monetary policies, some advocating constant inflation, some advocating gold standard.
My approach is more practical – we believe that capped emission has proven itself with Bitcoin and other coins, and we decided to use that model. We are also creating a whole ecosystem around Beam, on which other financial instruments can be built, even including coins with different emission schedule.
Q23: Why is Beam not against ASIC miners? Many miners who missed out on BTC are hoping to “make up for lost youth” on Beam, but does that seem to mean a faster monopoly and perhaps more vulnerable to 51% attack? How does Beam prevent this?
Alex: We have chosen Equihash with is memory hard and gives less advantage to ASICs. We also announced that we will perform 2 hard forks this year, with the goal to delay ASIC production to 2020 when the network is more mature.
PoW systems all have certain risk of 51% attack, especially if the network is small and less valuable. I believe that Beam network value will be very significant by the time ASICs come on board. And, even if someone manages to get hold of 51% of the network, they will not have any incentive to ruin it by performing an attack – the mining rewards will be much more lucrative than that.
Q24: Hi，Alex，according to the statistics from miningpoolstats, Sparkpool has accounted for 49.4% hashpower of Beam, and yesterday it was even over 50% at one point, What do you think of such a hashpower centralization, is there an attack risk? In addition, there are a total of 8 mining pools supporting Beam in the whole network, while 15 mining pools supporting Grin C29 algorithm now. Do you have any measures to attract mining pools to mine Beam?
Alex: Miningpool stats apparently looks only at pools and not independent miners.
My current data shows that Sparkpool controls about 46% out of total POOL hashrate, but around 33% of TOTAL hashrate.
While there is a risk of attack if someone controls 51%, I don’t think it makes economic sense – it is much better to just earn mining rewards and make money on that.
Regarding adding more pools to our network, we very much want that. I believe that our activity in China and in Asia will attract more attention and bring more mining pools onboard.
Q25: Does Beam want to be a better bitcoin or a complement to bitcoin? Bitcoin can be defined as digital gold, and from the design of the economic model, there is no supply limit for Grin, it seems that it is for the purpose of being a digital currency with stable coin value. However, Beam has 262.8 million limited supply, and also has a constant halving mechanism like bitcoin. What is your plan about this?
Alex: Beam wants to answer both confidential store of value use case and the confidential means of exchange use case. I believe that as time goes, more and more people will realize the need for financial privacy, and Bitcoin community will have to do something about it. Without privacy it may be hard, in my view, to remain Digital Gold.
Indeed, limited supply model creates a better incentive to store value than to use as means of exchange.
Q26: Another issue of privacy coin is compliance. Although people expect absolute security and privacy in the crypto market, for business entities, they are bound to accept the government’s compliance review. Will this bring any trouble to privacy coin?
Alex: In Beam, compliance is optional. In my view, businesses will choose to be compliant, and private people will choose to remain confidential. Exactly the same as it is with Cash today.
In Beam, there will not be any “backdoor” or any way to reveal transactions of a person who did not choose to be compliant
Q27: There was an incident not long ago, after the transfer occurred, a buyer said that he did not receive the coin, because the transaction is too private, no one can confirm, do you have solutions for things like that?
Alex: Yes, we are adding “transaction proof” – a mechanism that will allow the sender to prove that the receiver got the coin and that the receiving wallet signed the transaction.
Wendy and Kyle contributed reporting.