The launch of a new cryptocurrency named Grin took place on January 15, 2019, in development for many months. Just another crypto currency? Yet the topic has sparked real interest in the cryptoasset ecosystem. So what are the innovative features that make this asset stand out among its many competitors? Will they be able to be realized?
MimbleWimble, like in Harry Potter?
The Mimblewimble protocol that lays the foundation for Grin was theorized by Tom Elvis Jedusor in July 2016, a pseudonym that is one of the developer team's many references to the Harry Potter universe. Anonymity and a good-natured side are therefore in order.
The protocol describes a simplified Bitcoin architecture, notably via the ablation of the script language and any intermediate transaction. So if Alice sends a unit to Bob and Bob sends Eric a unit today, the blockchain will simply keep the state of the last transaction in memory, forgetting about intermediate transactions. This saves space on the blockchain and ensures user privacy.
To perform a Mimblewimble transaction, the sender's wallet must communicate with the receiver's wallet. The latter sends the sender a receiving address, which is used to perform the transaction, but whose details will not be written in the block.
A last interesting feature is the fact that each block does not contain the details of each transaction, but only the list of entries and exits. For the block to be valid, the number of units in input must be equal to the number of units in output. Here again, the size of the blocks is reduced and confidentiality preserved, without reducing the level of security. As an example, the information available for Grin's block n°4080.
Such features resemble those offered by Monero or Zcash, but taking the aspect of protecting users' information even further.
Grin: Anonymity, no preliminaries, no fundraising
It's still premature to add Grin to our Coinhouse platform, but we'll keep an eye on its development. The Grin cryptocurrency is an implementation of the MimbleWimble protocol, with a few special features :
Grin's development team is ideologically opposed to the idea of fundraising to finance the development of this asset: no ICO on the horizon, only donations from the community will allow the project to fund itself, the protocol is open source, any willing developer is invited to participate in the project.
The Zcash project had caused controversy in 2016 allocating for a defined period 20% of the revenue from mining to a "Zcash foundation". Many projects have followed this example, with the aim of creating a war chest that would pay off big later, and artificially maintain the scarcity of their asset on the market. Another MimbleWinble implementation called "Beam" made this choice and quickly suffered the wrath of the community in return.
How does Grin mining work?
Grin mining is open to everyone and the team has chosen a "cuckoo cycles" protocol preventing the use of ASICs, specialized hardware with high performance, leaving a few months of margin for those, more numerous, who want to mine with graphics cards. No one has a particular advantage in this process and it will be a free competition. Asics projects are already in preparation and should appear in the next few months.
There is no limit to the number of Grin units, unlike Bitcoin and its 21 million units, and 60 Grin per block will be produced without time limit. While this may seem like an odd choice in the crypto community, keep in mind that linear currency inflation in value will naturally tend towards zero in percentage terms.
The team argues that every year, units of crypto assets are "lost" due to a handling error or the loss of private keys. It is thus approximately 31,54M units which will be produced each year on the Grin network. Here is an approximate curve of the Grin inflation rate for the next century:
An almost smooth launch
The first block was created on January 15, 2019 at 4pm without a hitch.
However, the number of miners who launched their machines on the new currency was lower than the developers had expected, which slowed down the creation of the first blocks for a few hours.
In Grin, each COINBASE (money creation transaction that remunerates the miner) is blocked for 1440 blocks, or about 24 hours. We had to wait until January 16th ~16h UTC for the first transactions to be possible and for a price to be set.
An asset that is still looking for its valuation
As the most reputable marketplaces are by nature cautious, Grin is for the moment only available for purchase on minor platforms with an unestablished reputation. It will take some time for Grin to prove its stability and robustness before being considered by other players.
This exercise is just to give us an idea but is in no way a precise metric. Buying Grin today is a risky bet, much more so than buying bitcoins, you obviously shouldn't put in more than you're willing to lose. The protocol can be unstable and it is wise to wait several months before touching it.
The protocol is still in its infancy and untested, the number of monetary units currently available is extremely small, but inflation will be very high during the first few years. These are all forces that will have an adverse effect on its value. The free market will eventually indicate a fair price. After ten years, Bitcoin still suffers from high volatility, although this is tending to decrease, and Grin like any other nascent asset has to pass this "price discovery" stage.
A "laboratory" for Bitcoin?
The Bitcoin community, usually rather hostile to "altcoins", seems to support the Grin project because of its ideological compatibility with the founding principles of Bitcoin.
Rather than a competitor, Grin is seen as a complementary network and an opportunity to test in real conditions certain ideas that could in the medium or long term be integrated into the Bitcoin network: a network that is more flexible and can evolve faster than Bitcoin, whose low valuation allows it to withstand mistakes and whose results can be assessed in the medium term.
Based on the MimbleWimble technology, which is particularly interesting for its privacy aspects and its efficiency in terms of size, respecting principles close to those of Bitcoin at the time of its creation, we consider Grin to be an asset to be followed, we will closely analyze the beginnings of this new protocol and will keep our readers informed of its evolution.
Thanks for reading.
