Mimble Wimble and Extension Blocks are two interesting Bitcoin proposals that were heavily discussed by Core developers, but haven’t been used for their intended purpose. First presented as a soft fork scaling solution by Johnson Lau in August 2013, Extension Blocks are essentially sidechains that get secured by the same miners and validated by the same nodes. They enable easy transfers from one chain to the other, effectively increase the available the block size without compromising the incentive structure, but come at the expense of adding more complexity and becoming an extra burden for the validators’ hardware.
On the other hand, Mimble Wimble is the new kid on the privacy block. The protocol, which was first introduced by pseudonymous creator Tom Elvis Jedusor on a Bitcoin research IRC channel during the summer of 2016, offers scalable confidential transactions. The proposal was formalized and developed by Blockstream researcher Andrew Poelstra, who proceeded to present his findings at Scaling Bitcoin 2016 in Milan.
In a nutshell, every new MimbleWimble block performs a big CoinJoin where all transactions are equal. Later on, the transaction data structure gets pruned to only leave information about the first and the last transaction from that block. It’s a major improvement that can effectively turn gigabytes of transaction data into only a few kilobytes, while protecting the privacy of the parties involved. In comparison, Confidential Transactions are about 10 times bigger than the average Bitcoin transaction.
With help from Grin++ developer David Burkett, Charlie Lee decided to marry the two Bitcoin proposals into a soft fork for Litecoin. The result adds both scalability and privacy to the Litecoin chain – with the great advantage that everything is compatible with Bitcoin, and this bold experimentation may also serve as an example that the bigger network can follow.
Fungibility is the only quality of sound money that Bitcoin lacks. Since everything is public and the origins of all coins are visible, discrimination between UTXOs is part of the game theory. In order for this discrimination and censorship to get eliminated, we need to make it technically impossible to happen. And for that, Bitcoin requires base layer privacy.
In this interview with Charlie Lee, you will hear us talk about some of the most significant design choices of the Mimble Wimble Extension Block (MWEB) implementation. It’s an all-encompassing dialogue that dares to question the fabric of our transparent on-chain transactions while also presenting something that might just get added to Bitcoin in a few years. It’s the perfect example of BTC proposals being tested on a more centralized and change-friendly chain (as was the case with SegWit and the Lightning Network), and something that has the potential to make Bitcoin more fungible.
Listen to Charlie Lee on Apple Podcasts, Spotify, and more!
If you choose to listen to the episode on any of the big tech platform, please don’t forget to subscribe and leave feedback. The metrics aren’t only a mean to express vanity, but also a way for people to discover the content more easily. I generally think that Bitcoin privacy is the most important pursuit that we have in the space, so I’d be happy if more people learned about the various efforts to make it happen.
On the other hand, there is also a registration-free option which allows you to download the episode for offline listening on your old Zune or iPod Nano. Open this link and you’ll get to a native player that won’t discriminate you for using the Tor browser for extra privacy.
If you’d like to also watch me and Charlie discuss, then open the YouTube video below.
This Episode Is Sponsored By Vaultoro And Wasabi Wallet
Joshua from Vaultoro is a big fan of the show and I’m happy that he sees potential in my work and supports it without caring about numbers and growth statistics. So I must thank him for his generosity and invite you to check out Vaultoro – the exchange where you can trade with honest money (bitcoin, gold, and silver).
None of this is financial advice from me, but I’m pretty sure that the shiny rock is a better store of value than any fiat currency or “stablecoin”, so maybe it would be wise to use this commodity to preserve your purchasing power during bear markets and get back into bitcoin as soon as you’re convinced that the downwards movement are over. You can also have the gold bars delivered to your house… because you know, if it’s not in your safe then it’s stored somewhere in Switzerland where you can’t touch it whenever you please. For more information, check out Vaultoro’s website.
Also, Joshua from Vaultoro is sponsoring a Lightning Network faucet – he hopes that Bitcoin’s second layer will one day become potent and popular enough to replace the smart contract and tokenization features of Ethereum. And he also supported Giacomo Zucco’s layer 3 RGB Spectrum experimentation from 2019.
If you would like to increase your network-level and transaction privacy, you should download Wasabi Wallet on your computer. It routes your connection through the Tor network to hide your IP, it downloads block filters so you validate your own transactions locally without appealing to a trusted third party, and it also connects to your own full node to boost your financial sovereignty. Extra features include advanced hardware wallet integrations, easy UTXO management (press CTRL+C+D in Wasabi 2.0), address reuse prevention, and even a lurker wife mode.
Wasabi is best known for its link-breaking CoinJoins, which are giving a hard time even to the EuroPol. Use the wallet to increase your financial sovereignty, but don’t do any illegal stuff – use your financial sovereignty with responsibility (also read the Wasabi terms of service).