The past few weeks have seen the launch of two new privacy coins: Grin and Beam. Grin, the most hyped of the two projects, went live with the mining of its genesis block on January 15. Beam beat Grin into existence by a few weeks, with its January 3 launch neatly coinciding with the 10th Anniversary of the mining of Bitcoin\u2019s genesis block. Both utilize MimbleWimble privacy technology, and both have caused some considerable excitement within cryptocurrency communities. However, both have already experienced their first negative headlines. For Beam, the negative headlines have been associated with technical issues. On January 9 \u2013 just four days after launch \u2013 Beam\u2019s official Twitter account warned users of a \u201ccritical vulnerability\u201d in \u201call previously released wallets.\u201d On January 21, a second unrelated issue caused the Beam blockchain to cease working. An official post-mortem blog post describes the issue as being caused by \u201ctwo cloned wallets (most likely created by copying the same wallet.db file) both the same cloned UTXO to the blockchain, in incorrect cut-through processing and ultimately to an invalid block.\u201d https:\/\/twitter.com\/beamprivacy\/status\/1083099224835792898 https:\/\/twitter.com\/beamprivacy\/status\/1087294277531635713 While Grin has yet to run into any similar technical difficulties, it attracted its own share of negative attention as the price crashed soon after launch. AMB Crypto reported on a 97% plummet from a high of $261.65 to $4.60 within 24 hours of the mining of Grin\u2019s genesis block, which CoinDesk quoted Primitive Ventures\u2019 Dovey Wan as calling \u201cthe most expensive genesis block one in history.\u201d But none of this was entirely unexpected and it has apparently done little to dampen excitement around the two new coins. Beam\u2019s launch was preceded by an official blog post warning that the project\u2019s \u201cinnovative nature\u201d meant its early implementation was likely to \u201ccontain bugs, defects, or errors that materially and adversely could affect the use, functionality, or performance of Beam.\u201d Similarly, Wan voiced caution against early mining of Grin, telling CoinDesk that \u201cGrin won\u2019t be profitable, especially early on.\u201d Both projects have been in development for some time and a lot of anticipation had built up ahead of their launch. So what is MimbleWimble and why are these new coins causing such excitement? \u201cPrivacy and Scalability Without Sacrificing Anything\u201d One of the best-known crypto figures to have voiced excitement at the launch of Beam and Grin is Litecoin founder Charlie Lee, who told the Magical Crypto Friends YouTube channel that these coins were able to provide \u201cprivacy and scalability without sacrificing anything.\u201d Lee compared the coins and their underlying MimbleWimble technology with Zcash, which achieves privacy through adding data to the blockchain, thus making it less scalable. In contrast, Lee characterized Beam and Grin as achieving privacy because they \u201cthrow away stuff.\u201d https:\/\/youtu.be\/oZpdHrVi9N4?t2716 Crypto Briefing describes Grin as \u201ca scalable privacy coin that has no addresses, no amounts, and is therefore less storage intensive than other privacy coins and digital currencies.\u201d MimbleWimble\u2019s data requirements are just 10% that of Bitcoin, making it \u201cmore scalable, less centralized, and significantly faster.\u201d Each transaction made using Bitcoin (and many other established blockchains) works by bundling as many of hundreds of inputs and outputs in order to maintain an accurate record of which coins have spent and which coins remain in users wallets. MimbleWimble allows Beam and Grin to drastically reduce this by creating a unique multi-signature key for each transaction. Equations then remove coins from the sender\u2019s wallet and add them to the receiver\u2019s wallet without publicly broadcasting the transaction to the entire blockchain network. A \u2018blinding factor\u2019 is used on all transactions, adding noise data to the publicly viewable portion of each transaction, and making it impossible to see what has been sent and who was involved in the transaction. As well as ensuring privacy for all transactions and increasing scalability, MimbleWimble also ensures greater network security and decentralization. An issue currently faced by the largest blockchains is that running a full node detailing all network transactions requires the storage of a huge amount of data. Data from Statistica shows that a full record of Bitcoin transactions currently totals just shy of 200GB, while the increased data usage of smart contracts and DApps means a full Ethereum node exceeds 1TB. The more full nodes there are, the more decentralized the network becomes. And while Ethereum plans to incentivize running of nodes with a switch to a Proof-of-Stake (PoS) consensus mechanism in the future, MimbleWimble offers a huge scalability advantage over both Bitcoin and Ethereum in the here-and-now. The Philosopher\u2019s .txt File MimbleWimble\u2019s unusual name is taken from a tongue-tying curse that features in the Harry Potter series. It was first proposed by a user in a Bitcoin Developers\u2019 chatroom using the handle Tom Elvis Judor, based on the name of Harry Potter\u2019s archnemesis Voldemort from the French version of the books. Judor shared a MimbleWimble whitepaper in July 2016, and this is the basis for the protocol which Grin and Beam have now cast into reality. Just as with Judor and Satoshi Nakamoto before him, the identity of Grin\u2019s creator is shrouded in secrecy. In contrast, Beam\u2019s official website lists a rundown of its team members, including CEO Alexander Zaidelson. Zaidelson\u2019s resume includes stints with tech firms such as big data analytics firm WeFi and two years working in Israel\u2019s Venture Capital sector. Satoshi aside, anonymous founders are often a red flag in the crypto space, but most actually see this as one of Grin\u2019s strengths. Grin\u2019s development has been community-driven, with many of its early supporters and developers adopting appropriately Harry Potter-themed pseudonyms. The project\u2019s commitment to decentralization and lack of central leadership has made it enticing at a time of personality-driven conflicts within the crypto space, such as the battle between the Roger Ver and Craig Wright-led factions on either side of the Bitcoin Cash hard fork. Beam\u2019s approach is much more business-like, from the transparency of its team to the economics that underpin it. While both projects eschewed the typical cash cows of an ICO or pre-mine before activating their main nets, 20% of Beam mined within the first five years will be transferred to a Treasury. This amount will then be shared out among Beam\u2019s core team, investors, and a non-profit foundation. Another fundamental difference is that the potential supply of Grin is infinite, while Beam will be capped at 262.8 million coins. As with Bitcoin, Beam\u2019s mining reward will decrease over time until the supply is exhausted; the project\u2019s website states this will happen in 133 years from now.\u00a0 Beam is therefore designed to be deflationary, while Grin is designed to be inflationary. This significant distinction represents a fundamental philosophical difference between the two projects. Beam\u2019s website emphasizes that \u201cthe performance will not be high enough for BEAM to be used as \u201cmeans of exchange,\u201d and that it will instead function primarily as a \u201cstore of value.\u201d In contrast, Grin aims to use the MimbleWimble technology to create a Bitcoin-like crypto that can actually function as a means of exchange. While Bitcoin was envisioned in the original whitepaper as a usable currency, a combination of volatile short-term prices, long-term price appreciation, and slow transaction times have all combined to make it functionally useless as a means of exchange. Combining the scalability benefits of MimbleWimble with an uncapped supply, Grin is aiming to overcome these limitations and promote its use as a currency. Muggles, Miners, & Venture Capitalists The philosophical differences between Beam and Grin are also apparent from sections of each coin\u2019s website detailing the projects\u2019 funding. While Beam lists numerous VC firms on its \u2018Investors\u2019 page, Grin\u2019s website solicits donations and details past community fundraising efforts. Despite this, Grin seems to have made more headway than Beam with VC firms since the project launch. CoinDesk quotes an anonymous partner of a crypto investment firm as enthusing: \u201cThis is the thing that comes closest to bitcoin\u2026 In a lot of investors\u2019 minds it kind of pattern-matches to \u2018bitcoin 2.0.\u201d The same article includes a raft of similarly enthusiastic soundbites from other VC firms and mining operations, with an extract taken from Primitive Venture\u2019s Proof of Work newsletter neatly surmising the unusual levels of attention Grin\u2019s attracted: \u201cThere is (by our conservative estimates) 100 million dollars of mostly VC money invested into special-purpose investment vehicles to mine Grin. This does a lot of weird things: it turns a bunch of people who would have been buyers of grin into sellers of it, it changes the composition of the early holder roster, and it means the chain will launch with an extremely high degree of security via high PoW hashrate.\u201d The unbridled enthusiasm surrounding a potential \u2018bitcoin 2.0\u2019 has led to it becoming \u2013 in the words of mining entrepreneur Josh Metnick, quoted in the CoinDesk article \u2013 \u201calready overmined.\u201d Primitive also explicitly told CoinDesk that it was expected to be inflationary for the first few years, and thus unprofitable to mine. How Revolutionary are the new MimbleWimble privacy coins? MimbleWimble isn\u2019t the only technology that sets Grin and Beam apart from other existing cryptocurrencies. Back in November, a Bitcoin Magazine article compared the two and their claims to offer total privacy of transactions. The writer, Aaron van Wirdum, suggested that someone interested in discovering the identities of participants in the network could potentially operate \u2018a spy node.\u2019 This would involve noting transaction details over time and gradually building up a picture of where coins were located in the obscured networks. However, Wirdum mentioned that an additional layer of privacy could be by incorporating a technique known as \u2018Dandelion.\u2019 Dandelion works by sending transactions on a random path through the network, \u2018diffusing\u2019 the transaction data across the network in a manner analogous to dandelion seeds being diffused in the wind. Both Beam and Grin have incorporated this and other techniques aimed at ensuring the network privacy. Another criticism of their \u2018revolutionary\u2019 status is that they are not the only projects to be incorporating MimbleWimble to enhance privacy. As Ricardo \u2018Fluffy Pony\u2019 Spagni pointed out on Twitter, Tari Labs is currently implementing MimbleWimble as part of a sidechain for Monero. https:\/\/twitter.com\/fluffypony\/status\/1084524086741602304 Spagni appeared alongside Charlie Lee on the episode of Magical Crypto Friends discussing Grin and Beam. Spagni laughed off the idea that, as a leading proponent of Monero, he might be \u201cscared\u201d by the hype surrounding these new privacy coins. He instead directed viewers to an even-handed and fairly comprehensive report on Grin and Beam completed by Tari Labs prior to both coins\u2019 launch and expressed interest in seeing how the projects developed. Lee was then asked for his opinion on potentially implementing MimbleWimble on a privacy-focused sidechain for Bitcoin or Litecoin. Lee was dismissive of the idea\u2019s usefulness, saying that any sidechain solution is inherently inferior to a stand-alone coin secured by mining. While Spagni\u2019s only reaction to Lee\u2019s statement on the video is a wry smile, he recently retweeted this comedic take on Beam\u2019s early difficulties. https:\/\/twitter.com\/crypto_bobby\/status\/1087338824911544321 Bitcoin 2.0\u2026? Proclamations of either Grin or Beam being a \u2018Bitcoin 2.0\u2019 are sure to spark FOMO and derision in equal measure. Lee drew laughter from all involved when he described Grin as \u201cthe new Bitcoin, right?\u201d on Magical Crypto Friends. But with its emphasis on decentralization and community-driven development, its easy to see why Grin\u2019s development has been compared to the original cryptocurrency. But with the main net less than a week old, there\u2019s a long way to go before it can begin to live up to such wild expectations. And with a purposefully deflationary supply, it\u2019s been specifically designed to prevent the type of rampant speculation that fueled Bitcoin\u2019s surge toward $20,000. With their incorporation of next-generation crypto technology, Grin and Beam are the most talked-about new coins in quite some time. Whether they\u2019ll still be big news ten years from now is a question with a lot of money riding on it.