Both Grin and Beam were built on top of the Mimblewimble privacy protocol. This is essentially a set of techniques and functions which underpin both coins.
It imbues both coins with anonymity at several different levels. Through their use of Mimblewimble, both coins have:
CoinJoins: partially hides users and transactions. All the transactions on each block are bundled up into one big transaction. This makes it difficult to connect individual users to individual transactions.
Confidential Transactions: conceals individual coins. This hides the footprints of individual coins, concealing transaction amounts and the “identity” of individual coins on the network. Without being able to identify individual coins, it’s difficult to identify individual users.
Dandelion: prevents real world location tracking. It’s possible to deduce the real world location of blockchain users by watching network activity. Dandelion prevents it.
Both Grin and Beam were built on top of an identical Mimblewimble foundation.
But from there, they each went their own way, adding modifications and pursuing different goals.
The differences between Grin and Beam
The developers of Grin and Beam envisioned different purposes for each coin which in turn gave each a different origin story.
Although both coins are designed to facilitate the private transfer of monetary value, they have different visions of what practical privacy means in the real world.
In the Grin network, privacy is mandatory, always on and cannot be switched off.
All transactions are private, all users are hidden and the entire network is geared towards the normalization of complete anonymity.
Beam is designed for selective privacy. The goal is to create a system that can simultaneously offer users anonymity when needed, while also allowing the optional tracking of transactions and users where needed.
The goal is to create a more regulator-friendly privacy coin that can offer additional privacy without stepping on the toes of lawmakers.
2. Origin and community
One of the main differences is in the origin of each coin, and the communities that grew around them.
Grin was built in the perceived image of the Mimblewimble creator, an anonymous cryptographer who went by the pseudonym of Tom Elvis Jedusor. The name is a reference to a character from Harry Potter.
While some prominent figures, such as Andrew Poelstra, have publicly joined up with Grin, its development is driven largely by anonymous volunteers, many of whom also sport Harry Potter-inspired pseudonyms.
It’s reminiscent of the development of bitcoin, under the pseudonymous Satoshi Nakamoto, which has attracted a lot of supporters.
Beam is the name of a cryptocurrency, as well as the Israeli-based startup which brought it to life with the help of investment from a range of venture capital firms.
The plan is for the Beam company to eventually see control of the network to the general public.
3. Functional differences
The different visions and different communities that grew around each coin informed the functional differences between them.
Grin is always 100% private. This is both an ideological and a practical choice, because there’s a degree of “herd immunity” in anonymity. If one user’s identity is compromised, they might be used to find others identities. If you can start identifying some users, you can look for clues to start untangling Grin’s privacy features.
Beam is private by default, but makes it optional. It does this by allowing users to optionally attach additional data to transactions such as amounts and wallet addresses. Beam sees optional privacy as a more regulatory-friendly and practical real world variation on anonymity.
Grin is still notoriously difficult to use compared to most cryptocurrencies. This is because the Mimblewimble protocol forces users to run a full node if they want to use Grin. But limited developer resources mean there are still no simple wallets, and a fair degree of technical expertise is needed to use it.
Beam was faced with the same limitations of Mimblewimble, in that users need to run a full node. But Beam put additional resources to the development of a user-friendly wallet, clear instructions and general non-essential user-friendliness upgrades. This has given it a much more accommodating user experience.
Miners get a flat 50 GRIN per block forever. There is no supply limit. This system will proportionally reduce Grin’s inflation over time. Immediately after launch, Grin’s inflation rate was extremely high (several hundred percent), but in a few years, it will be down to a couple of percent (and then even less). This may be a viable way of maintaining network health in the very long run (over decades), at the cost of more downward price pressure in the earlier years.
Miners get 100 BEAM per block in the first year, halving each year. There is a 282.8 million BEAM supply limit. This schedule is designed to build value more aggressively than Grin’s, with a finite supply limit and sharply reducing inflation rate. This may be a viable way of bolstering coin value and interest in earlier years and building a user base – although in the very long run it might result in unpredictable outcomes.
Consensus and mining
Grin’s Cuckoo Cycle is designed to temporarily resist the entry of high-powered mining machines (ASICs). The point is to ensure Grin is mineable with video cards, and therefore more accessible, rather than being locked up by the big-money professional mining firms. However, the hype around Grin means it got locked up by big GPU mining firms anyway.
Equihash is a widely used mining algorithm that was formulated to offer a degree of temporary ASIC resistance. Like Grin, the point was to ensure the coin remains accessible and widely distributed before big-money mining firms get in on it. However, by the time Beam launched, Equihash ASIC miners had already been in use for a while.
To use a wallet for both Grin or Beam, you will need to download and sync a full node. On Beam this is easy and largely automatic, but on Grin this is a difficult and largely manual process.
Grin: Download the needed Grin core version and wallet from GitHub, and operate it with a Linux virtual machine.
Beam: Download the official Beam wallet from the Beam website and follow the prompts to install it and get synced.
Pros and cons of Grin and Beam
Grin is driven by a team that’s self-evidently in it for more than just the money. Its 100% private solution makes it one of the most private and anonymous cryptocurrencies in existence.
Beam was built with the advantages of an experienced, public and well-funded team, and offers user experience perks that Grin doesn’t. Its optional privacy functionality could see it achieve uptake where Grin doesn’t.
There’s a very real risk of regulatory action impacting Grin’s uptake. For example, as a total privacy coin Grin currently cannot be sold on Japanese exchanges anymore. This sentiment could spread, and some authorities in the USA and Europe have signalled a willingness to bar privacy coins if they can.
There’s an enormous difference between mostly- and totally-anonymous coins and more uncompromising privacy fans will likely veer towards Grin. The central development team may also deter purists. And while it’s more likely to get through, there’s still no guarantee that regulators will give Beam’s optional privacy mode a pass.
Grin vs Beam: The bottom line
Grin and Beam both started off from identical Mimblewimble foundations, but ended up going in very different directions.
But both are still dedicated to the same purpose, as a valuable tool to help retain privacy and freedom in a world of data harvesting and digital scrutiny. This is an increasingly pressing issue in today’s world, but it’s also a very complex one.
That’s why both Grin and Beam can be so similar, yet so different – while both filling a valuable niche. It’s good to have a diverse set of options in unpredictable circumstances.
No one knows what the future holds, but it’s nice that both Grin and Beam are along for the ride.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
Andrew Munro is the cryptocurrency editor at Finder. He was initially writing about insurance, when he accidentally fell in love with digital currency and distributed ledger technology (aka “the blockchain”). Andrew has a Bachelor of Arts from the University of New South Wales, and has written guides about everything from industrial pigments to cosmetic surgery.
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