Beam is a privacy-focused blockchain that implements the Mimblewimble protocol to produce a condensed blockchain and enable confidential transactions. Beam believes that its default privacy features and improved scalability give it an edge over otherwise comparable privacy-focused cryptocurrencies, like Monero and Zcash. The project featured no pre-mine or token sale, with the project’s capped 262 million supply of Beam only available through block rewards split among miners and the project’s treasury. Beam’s CEO, Alexander Zaidelson, has previous experience as principal of CIRTech Fund, among other tech ventures. Beam announced its mainnet release on January 3rd of 2019.
Beam utilizes the Mimblewimble protocol to enable a less data-intensive blockchain and to obfuscate transaction details typically made public in systems like Bitcoin.
Privacy on Beam is safeguarded in several respects. Transactions are encrypted using Mimblewimble’s Confidential Transactions technique, which hides transaction amounts. Crucially, the technique permits transactions to be secured and validated without storing addresses on the Beam blockchain—a user just holds keys to the ‘unspent transaction outputs’ (UTXO) he or she owns. This enables Beam to improve privacy both by making transactions private by default (thus reducing the risk that identity revealing information can be deduced through other actors’ non-private transactions) and by obviating the need to store complete addresses on a publically accessible blockchain, as part of the transaction history verification processes (thus eliminating actors ability to deduce identity through an analysis of blockchain records). The protocol further protects privacy by implementing Dandelion, a networking protocol designed to prevent observers of network traffic from inferring useful information, and by implementing Bulletproofs, a form of zero-knowledge range proof attached to every transaction and checked during validation to ensure transactions contain no negative values (which can create issues with monetary supply.) Bulletproofs have the added benefit of improved efficiency over the original Confidential Transactions protocol, meaning that proof sizes are substantially smaller, further limiting the growth of Beam’s ledger.
Beam is a ‘compact blockchain’, meaning that less information needs to be stored on-chain for purposes of validation than comparable blockchains—the project estimates the Beam blockchain will be 30% of Bitcoin’s size, below 70GB, when it reaches Bitcoin’s current scale. Beam can scale so in part because it only needs to store commitments, not addresses, on its blockchain, and in part, because it implements Mimblewimble’s transaction cut-through techniques, which allows nodes to validate transactions without needing to store intermediate transactions. Besides being private and scalable, the Beam blockchain is also auditable, though this feature is strictly optional and cannot be enabled retrospectively.
Beam is a PoW blockchain and uses a variant of the Equihash mining algorithm. Equihash is a memory-hard algorithm meaning that it requires a large amount of memory, as opposed to processing power, making it more efficient and less suitable to ASIC mining according to the Beam development team. The project successfully conducted a hard fork in August 2019, updating its mining algorithm in an attempt to further improve its efficiency and circumvent attempts to mine Beam with ASICs. Beam acknowledges that its choice of PoW will result in low transaction throughput, and is actively researching Lightning integration as a solution. In 2019, the project launched an atomic swap based marketplace in beta that allows for private trading with Bitcoin, Litecoin, and QTUM, as well as hardware wallet support.
The project is in the process of transferring governance to the Beam Foundation which will supposedly be managed by an independent board with the goals of improving the Beam protocol, promoting research, increasing awareness, and developing Beam’s privacy agenda, all of which will be achieved through its 20% allocation of treasury block rewards. In addition, Beam intends to decentralize its governance process by engaging its community.
In 2020, the project is focusing on several key areas, namely;
- The iteration of its privacy functionality - confidential tokens, enhancements to the anonymity of its UTXO set, network privacy improvements with the integration of Tor, I2P, and Mixnet
- Infrastructure - the launch of a web wallet and advancing hardware wallet support
- Interoperability - peg with Ethereum to enable the cross-chain flow of ERC20 tokens
- DeFi - using scriptless scripts to enhance Beam’s extensibility with a view to build more complex applications, specifically focused on the DeFi sector
Beam’s token, BEAM, is intended to function as a monetary asset, specifically by offering holders a unit of account, store of value, and means of exchange. BEAM has a disinflationary monetary design through its capped supply and block emission rate that halves every four years. , After 13 years (starting in 2019), 90% of all Beam will be emitted. Beam’s coin emission is split between miners and the project’s treasury, with block rewards apportioned in a 4:1 ratio between miners and the treasury in years one through five of the mainnet launch. The treasury will be used to repay Beam investors (35% of treasury allocations), compensate the Core Team (45% of treasury allocations), and support the Beam Foundation (20% of treasury allocations).