The valuation of the second-generation anonymous currency exceeds that of Ethereum. Come and find out!

First of all, we need to understand what anonymous coins are.

The history of anonymous currency development is not long, but it has gone through two generations of changes.

Outstanding representatives of the first generation : Monero, Zcash, Dash

Monero ( XMR) was launched in 2014 as a fork of Bytecoin, the first CryptoNote currency , but it doubled its target block time ( 60s) and slowed its issuance by 50%.

As the number one anonymous coin, Monero is unique in both acceptance and technology.

As the most popular currency in the dark web besides Bitcoin, Monero uses the anonymous technology of Ring Signature. The significance of Ring Signature technology is that it realizes the privacy of transactions, that is, the sender of the transaction cannot be traced through unrelated nodes in the blockchain system . In short, the signature private key and many public key information are combined to form a closed loop. When other nodes verify, they can only determine that the signature is one of many public keys, but have no way to locate which public key is the specific sender.

Interestingly, out of the seven members of Monero’s development team , five chose to remain anonymous, carrying out the spirit of Monero to the end.

Zcash was launched on exchanges in 2016 , but its anonymity technology has attracted great interest from the outside world since its development. The highest transaction price on the day of its launch was as high as 1Zcash = 3300BTC .

Unlike Monero, Zcash does not use the anonymity technology of ring signatures, but instead uses zero-knowledge proofs ( zk-SNARK) . This is a more secure and theoretically the best anonymity technology. "Zero-knowledge" proofs allow one party (the prover) to prove to another party (the verifier) ​​that a statement is true without revealing any information beyond the validity of the statement itself. For example, given the hash of a random number, the prover can convince the verifier that there is indeed a number with that hash value without revealing what it is.

This achieves the goal of being untraceable, safe and anonymous.

Dash was born in 2014 and was originally named Darkcoin . Compared with Monero and Zcash, it does not have full competitiveness, but Dash has been supported by many large institutions, so its popularity is even better than the first two currencies.

Dash uses the technology of coin-mixing anonymity to support the anonymity function. Coin-mixing principle (CoinJoin): Many people participate, and a transaction includes a large number of inputs and outputs. It is difficult to find the corresponding pairs of each person in the input and output, and the connection between input and output is actually severed. Multiple coin-mixing, with a small amount of coins each time, will have a better effect. Of course, the more complicated the coin-mixing process is and the more people participate, the slower the speed will be.

Second generation outstanding representatives: Grin, Beam

These two coins are very similar, and are both based on the MimbleWimble protocol , which is the latest anonymous technology. These two coins have been very popular recently, and have even been forced to be listed on exchanges (miners' transactions are unofficial) and mining pools due to excessive trading demand. Rumor has it that the initial valuation is even 15 times that of Ethereum. What is the charm of these two coins?

Let’s first understand the MimbleWimble protocol.

The MimbleWimble protocol (the word comes from "Harry Potter" and is a curse that can make people slur their speech or be unable to make sounds) was originally intended as a protocol to improve Bitcoin. It was proposed in May 2016 to save storage space for Bitcoin and provide stronger transaction privacy.

In a paper published on July 19, Tom Elvis Jedusor explains how bitcoin exchanges are being spied on and some companies have created services specifically to monitor bitcoin users’ transactions.

The MimbleWimble protocol, in essence, is a blockchain similar to Bitcoin that is said to offer a higher degree of security than the current Bitcoin protocol, such as increased stability, a different type of cryptographic confidentiality, and an ASIC-resistant mining algorithm to encourage decentralization of mining .

In the MimbleWimble protocol, there is no transaction address. For each transfer, the recipient must construct a new transaction witness. At the same time, the transaction amount is hidden, and the intermediate state of transactions can be merged. For example, A transfers money to B, and B transfers some money to C. Then there is no need to record both transactions. You only need to record how much money A transferred to C, merge the intermediate state of the transaction, and attach B's signature. This can ensure transaction security and prevent double spending, while reducing the size of the UTXO set and significantly reducing the space required for block storage.

Later, as the development progressed, the MimbleWimble protocol had a serious compatibility conflict with the Bitcoin script. As a result, another anonymous god, Ignotus Peverell (also the name of a character in Harry Potter) directly used the MimbleWimble protocol to develop an independent cryptocurrency project in November 2016, which is Grin.

Grin is written in Rust language, and most of its core functions have been implemented. It is currently in the testnet stage. The mainnet is expected to be launched on January 15 next year, without 1CO.

In April 2018, another project started development based on the MimbleWimble protocol, written from scratch in C++ , and launched Beam.

Let’s briefly talk about the similarities and differences between Grin and Beam.

Similarities:

• Both are developed based on the MimbleWimble protocol and are open source; • Neither has 1CO; • Both use the Dandelion relay protocol (a protocol that improves the privacy of transaction information transmission mechanisms) .

Differences

• The language used by Grin is Rust; Beam is C++. • Grin aims to be a simple and minimal reference implementation of the MimbleWimble protocol blockchain; Beam includes many modifications to the MimbleWimble protocol and wants to achieve more functions (such as wallets that can be audited by regulators) . • Grin uses Cuckoo Cycle PoW; Beam uses Equihash PoW. They both provide a certain degree of ASIC resistance ( Grin's PoW will also be divided into "ASIC-friendly" and "ASIC-resistant" algorithms to balance block rewards) . • Grin chooses an inflationary monetary policy, and the block reward will remain unchanged; Beam chooses a deflationary monetary policy, similar to Bitcoin's regular halving, and has a maximum supply.