The AMA (Ask Me Anything) held weekly by the BW.com official telegram (following as BW) invited Alex from Beam this week. In over 60 minutes, Alex answered all the questions which raised in the BW official Twitter account in terms of the recent progress of their project. He also shared his opinion on the Mimblewimble Protocol and the privacy coin market.
Section 1: Introduction
BW Global CEO Cathy: Alex, can you give us a brief introduction about yourself?
Beam CEO Alex(The following is abbreviated as A):
Sure! I am 43 years old and I live in Israel. I started my career as software developer in late nineties, working in several startups and larger companies. In 2005, I co-founded a startup called Nareos that operated in P2P file-sharing networks space. I started my career as software developer in late nineties, working in several startups and larger companies. In 2005, I co-founded a startup called Nareos that operated in P2P file-sharing networks space. Before joining Beam, I spent 2 years in a VC fund here in Israel, investing in late-stage technology companies.I am excited about the crypto space and I think our industry has a huge potential.
Section 2: Questions from Twitter and Communities
Beam has been out for a while, as a star token in 2018, what kind of project is Beam actually?
A：Beam is a scalable confidential cryptocurrency based on a novel protocol called Mimblewimble. Confidential means that, unlike in other crypto currencies, whatever you do on the blockchain is not visible to anyone. For example, when you make a transaction in Bitcoin, the sender address, the receiver address and the amount are visible to everyone. There are techniques that can deanonymize you (find your real identity), understand how much money you have and who you are trading with. So, there is no financial privacy on Bitcoin, Ethereum and most other coins.
Beam returns financial privacy. Scalable means that Beam has a compact blockchain. The first generation of confidential currencies (Monero, Zcash) are built on Bitcoin architecture and use various sophisticated methods to hide information on the blockchain, making the blockchain really big. Having a compact blockchain is important for true decentralization — if the blockchain is small, everyone can run a full node. Mimblewimble protocol is the first protocol that combines great privacy and small blockchain. It was published in 2016 by an anonymous author. Mimblewimble is a magic spell from Harry Potter saga. In Mimblewimble, there are no addresses, the blockchain does not hold information about sender, receiver and amount, and the blockchain doesn’t even store the transaction history.
As a privacy coin, Beam adopts semi-corporate operation as different from others. How to understand semi-corporate operation?
Alex: That’s a good one, we get this a lot.
Beam started as a for-profit company. We raised funds from professional investors, built a professional team and released our blockchain in just 9 months.
While we started as a company, from the very beginning we said that we plan to also set up a non-profit Foundation that will take over the governance from the company and make the project more decentralized.
Right now we are actively working on setting up the Foundation, and it will start operating soon. In time, the goal is that the community will take more active part in governance so that after several years the project can become fully decentralized.
The Beam team is active in the Asian market in 2019. What is the reason behind this?
A：Regarding the Asian market,Asia is a very important area for us and for crypto in general. And we have good friends, investors, advisors and ambassadors in China, Japan, Korea, Vietnam and India. We also have team members in Thailand. So, it is very natural that we want to spend time and effort on talking to our Asia community and make it stronger. We are in good relationship with the Grin team and we often discuss technology and other aspects with them.
What is special about Beam compared to other privacy coins, such as Monroe/Grin?
A: There are two different comparisons here. Monero was the first privacy coin to launch — it appeared in 2014.
Monero is based on the Bitcoin architecture and uses Ring Confidential Transactions and one-time addresses to obfuscate information about the sender, receiver and amounts. The disadvantage of Monero is scalability — its blockchain is 5 times bigger per transaction than Bitcoin’s. Meaning, that if Monero had similar usage as Bitcoin, its blockchain now would be over 1TB in size — that means you would need special hardware to run a Monero node. Monero was the first privacy coin to appear and therefore it has a very strong community and very significant market cap, but we are confident that Beam technology is actually better. Regarding Grin, I already wrote a bit above. Grin was the first project that started developing a coin based on Mimblewimble protocol. Important differences between Grin and Beam are:
1.Beam has limited supply of coins (262,800,000), while Grin has constant emission forever.
2.Grin is being developed by a decentralized community, while Beam is run by a Company (and soon by a Foundation). The result is that Beam development moves much faster than Grin’s.
Another difference from both Monero and Grin is that at Beam, we put a lot of attention on usability. Our wallets are beautiful and very easy to use, and we spend a lot of time and effort polishing them.
Beam also has a very strong roadmap and a grand vison.
Our goal is to create a full confidential DeFi system, that will support confidential assets and smart contracts, and that also has opt-in compliance. Opt-in compliance means that users who want to report their transactions to authorities or auditors can do that, but the decision is always with the user.
Before the transfer, the two parties need to negotiate in advance. Will this be very troublesome for users?
A: Now we are talking technology a bit :)
Indeed, the difference of Mimblewimble is that the two wallets need to talk in order to build a transaction.
That means that they need to connect somehow.
For example, in Grin, the two wallets can either connect by IP (that means I have to disclose my IP to the other party and thus expose a lot of my identity), or by sending files to each other (meaning that the sender creates a file, sends to the receiver, the receiver wallet creates another file and sends back to sender, and then the sender sends the final file back).
Both ways are very problematic. So, in Beam, we created a special anonymous and encrypted messaging system for wallets. We call it SBBS (Secure Bulletin Board System)
You can think of it as Telegram for wallets. For each transaction, a wallet creates a new nickname (we call it address to make it similar to other cryptocurrencies, but it is actually just an SBBS nickname).That nickname is sent to the sender, and the sender uses SBBS to contact the receiver. They start talking and build the transaction together.
The user does not really feel or see it — the experience is the same as in sending coins in any other protocols.
Just made this screenshot from my mobile Beam wallet — the red arrow (at least I wanted to draw an arrow) points to the address.
So, the user just copies the address, and sends to the counterparty, similar to Bitcoin, but in reality, much more complex process happens.
The only limitation that Beam has is that in order for the transaction to happen, both wallets must be online during the 12 hours after the transaction is initiated.We are working to remove this requirement as well and allow truly one-sided transactions, but this will take some time.
What are the practical application fields of Beam at present?
A: The general use case for Beam today is similar to the use case of Bitcoin and other cryptocurrencies — it is both Store of Value and Means of Exchange. Confidentiality is a desirable property of money.
Confidential Store of Value is important to make sure that no government or bad guys can get information about the user’s crypto HODLings and thus cannot try to expropriate the funds.
Confidential payments are also important for any kind of activity. Again, you don’t want everyone to know who you are paying for and how much.
This is true for private individuals and no less important for businesses.
So, Confidential Means of Exchange is important for any kind of financial activity, but arguably even more so for acquiring confidentiality-related services, such as VPN access and anonymous web hosting.
Beam includes a secure BBS system (separate from the Beam blockchain) that allows the sender and receiver to safely exchange their Pedersen commitments. However, is the BBS system centralized? Can the BBS system guarantee user privacy and transaction security?
A: I like the tech questions :)
In Blockchain, it is all about decentralization. If you have a centralized component in your system it is really bad. That means someone can attack it or shut it down.
SBBS is fully decentralized — it is implemented as a distributed hash table run by the Beam nodes.
The communication is encrypted, and the nodes do not actually know who is talking to who.
The system works like a bulletin board — the sender “posts” a message on the board and a receiver looks at the board and picks the messages that belongs to him.
So, the system is very private and also secure — the communication is encrypted.The SBBS address is used as the public key.
Beam will cut production in 2020, will it lead to sharp fluctuations in prices in the secondary market?
A: Well, I am not a prophet. And even if I were, we usually do not really comment on prices. To tell the truth, I don’t know how it will influence the price.
In theory, smaller supply should increase the price.
What do you think about the entire privacy coin market?
A:I think it is undervalued. I think that if we REALLY believe that crypto will replace gold and then money itself, it is very clear that privacy is super important. So, there will be more demand for privacy coins, confidential assets, confidential smart contracts and confidential DeFi. And Beam is moving exactly in this direction. I also see that there are more and more developments in the privacy space and more projects are jumping in.
So, I am very bullish about the privacy space in general and privacy coins as well.
Any big move will Beam have next year?
A: Yes, a lot. 1. Confidential assets and bridges to other blockchains; 2. Hard fork to do the last change to mining algo; 3. Initial work on smart contracts; 4. Halving; 5. Foundation taking over the governance.
What would you like to say to Beam holders on BW?
A:I would like to say this: 1. Our team is working hard to deliver good software and promote Beam. 2. We are not giving empty promises and we are trying to be as transparent as we can.3. Do your own research :)
When will ASIC miners be launched to develop Beam?
A: We will be doing our second hard fork in the 2020. After that, we will not be changing the mining algorithm, so ASICs developers can start building their machines. So, probably ASICs can be launched in late 2020.
Why does Beam team choose privacy as an entry point to start this project while there are many privacy coin projects out there and some regulated countries like US, Korea don’t like Privacy coin at all (easy using for money laundering, terrorism)?
A: There aren’t many privacy coins really. Monero, Zcash, Zcoin, Dash (not really private). Mimblewimble is the first protocol with great privacy and great scalability, so we went for it. Governments don’t like privacy coins because they want to control all aspects of our life. Regarding illegal uses, do you know what kind of coin is used for most of the crime today? Of course, US dollars and other cash money, so I disagree when people accuse private crypto.
Could you describe the process that an international company would go through to use Beam as a means to transfer money internationally?
A: Very simple — install a wallet and send money internationally.
As i know, on Beam, Scriptless Scripts is used instead of Smart Contract. What is differences between it and Smart Contract? Can it response to basic requirements like SC and does it have outstanding points?
A:Scriptless Scripts is a combination of on-chain and off-chain calculations that allow different kinds of programs. Our smart contract solution will be mostly build on Scriptless Scripts.
Question 16 @davidhoang112:
A number of major exchanges have unlisted anonymous coins. Does this affect the development of Beam project?
A:Not really. Actually, very few exchanges delisted privacy coins (Japan and two exchanges in Korea). Actually, privacy coins do not have any contradiction with the FATF travel rule. We are watching the space, but we are not very concerned at the moment.
Question 17 @teodzz:
Why choose project name Beam? Does it make sense or a story follows it?
Why did Beam decide to use a separate main net and not an erc20? 3 Security is very important for e-wallets. I think Beam wallet is no exception. What security technology does Beam wallet use?
A:Beam has many meanings. It was also a word play on Grin — both Beam and Grin are different kinds of a smile. Mimblewimble cannot be done on ERC20. There is no privacy on ERC20.
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