Blockchain and Cryptocurrency Pro - How the Mimblewimble Blockchain Protocol Works

The mimblewimble blockchain protocol works in a very unique way. The transaction structure of the mimblewimble blockchain protocol is gotten from what is known as confidential transactions which is a method that is also used by other privacy cryptocurrencies. This method is very different from the usual model of other blockchain transactions and it allows for a more compact distributed ledger, making is lighter. Mimblewimble doesn’t make use of addresses and as such, all the transactions data on the mimblewimble network appear to be a collection of random data and cannot be identified by a third parties outside the network and only visible to the transaction participants.

It all starts from a private transaction. “User A” wants to send an amount of coins to “User D”, it will first of all get encrypted by blinding factors which is basically random values that the “User A” chooses and “User D” has to choose from. The transaction becomes valid when “User D” selects a similar value. The reason why “User A” or the sender chooses the blinding factors is so that it becomes more like a proof of ownership for “User D” or the receiver and it authorizes the receiver to make use of the coins received.

To further explain how the Mimblewimble blockchain work, let’s take for instance, “User A” receives 20 tokens on Mimblewimble from “User B” and 20 coins from “User C”. “User A” sends all the 40 coins received from “User B” and “User C” respectively to “User D”. On Mimblewimble blockchain, the transactions will be verified, however, the details of the transactions will not be fully private. The only thing that will be made public to the last receiver is the amount of coins amount of coins he/she received. This means that “User D” will only know that “User A” sent 40 coins and will not know the other transaction details of “User A” from “User B” and “User C”. This is what makes Mimblewimble blockchain fully private.

In the Mimblewimble blockchain, instead of a combination of many block like in most blockchains, it is one large block that can be verified and confirmed by the network, however, there is no way for any third party to find out the details for the transactions in the block and is impossible to know which inputs corresponds with which outputs. A cut-through is a feature that is utilized so as to remove redundant transactions in other to decrease the block data. This is very important in making it faster to synchronize and verify. From my earlier instance above, Mimblewimble blockchain, doesn’t record each of the inputs and outputs of all the “Users” involved in the transaction, instead, it only records a single input-output pair.