Cryptocurrency Beam to Incorporate Mimblewimble LN
A lightning network is what is called a “Layer 2” payment protocol that works as a second layer on top of a blockchain. It allows for transactions to be made without being public on the blockchain; once the transactions are completed, the balance is saved onto the blockchain. While lightning networks are less secure than the actual blockchain, they are generally quicker and are viewed as a way to reduce strain on a blockchain, allowing it become more scalable. As such, small payments are often viewed as a good candidate to be processed on lightning networks.
Indeed, Beam is implementing the LN (lightning network) in order to facilitate quick transfers of value in order to increase the coin’s viability in commercial environments. Bitcoin transfers can take anywhere from ten minutes to one hour to even one day depending on the network activity and the transactions fees. Even at the shorter end of the spectrum, without an LN, it functions much slower than most credit card processors or, of course, transfers of physical cash.
Bean addresses this very idea in its paper:
“… there are many use cases that we want to use digital cash for, where there is only minimal tolerance for wait times. It may be ok to wait for a couple of minutes when you are paying for beers at a local bar and you are not in a hurry to leave. But think of just quickly grabbing a drink from a vending machine while you are trying to catch your train or paying at a busy checkout with a long queue of other nervous customers behind you. For Beam to take over these use cases as well, we clearly need to achieve ‘Visa leve’ speed of payments, if not even beat it.”
In this paragraph, Beam articulates one of the biggest challenges facing the cryptocurrency space. While currencies built on distributed ledger technology have many advantages to existing payment methods — decentralization, security, immutability — speed is not yet one of them. However, with time, projects like Beam and the LN they employ, Mimblewimble — which is named for one of the spells in the Harry Potter series, and developed by an anonymous cryptographer going by the French name of Harry Potter’s nemesis — may change that.