Unchained - Grin: A More Private, Lighter Bitcoin - Ep.114

Episode Date: April 9, 2019

Daniel Lehnberg and Michael Cordner, core team members of Grin, discuss the first implementation of the MimbleWimble protocol, named after a tongue-tying curse in Harry Potter. We discuss the many ways in which Grin is similar to Bitcoin: its origin story, its goal to be "digital cash," as Satoshi's paper was subtitled, and even its emission schedule. We discuss how Grin is private, how it is lighter weight than the Bitcoin blockchain, and the philosophy behind Grin, which stands in stark contrast to the many ICOs. For the full show notes, go to http://www.forbes.com/sites/laurashin/2019/04/09/a-nimbler-more-private-version-of-bitcoin/ Thank you to our sponsor! CipherTrace: http://ciphertrace.com/unchained Episode links: Grin: https://grin-tech.org Grin newsletter: https://grinnews.substack.com Daniel Lehnberg: https://twitter.com/lehnberg?lang=en Michael Cordner: https://twitter.com/yeastplume?lang=en MimbleWimble white paper: https://scalingbitcoin.org/papers/mimblewimble.txt Grin Intros: https://github.com/mimblewimble/grin/blob/master/doc/intro.md https://github.com/mimblewimble/grin/blob/master/doc/grin4bitcoiners.md Circle Research report on MimbleWimble technology: https://research.circle.com/crypto-reports/mimblewimble Grin's monetary policy — visually, easier to see how its similar in effect to Bitcoin's: https://github.com/mimblewimble/docs/wiki/Monetary-Policy https://www.tokendaily.co/blog/on-grin-mimblewimble-and-monetary-policy Questions about whether Grin got the incentives right: https://twitter.com/nlw/status/1091319888562532355 https://twitter.com/TusharJain_/status/1091316903346429952 Tracking YeastPlume’s funding: https://grin-tech.org/yeastplume Ignotus Peverell post noting his disappointment in funding for YeastPlume: https://www.grin-forum.org/t/solved-early-disappointments/3682 Interview with Ignotus Peverell: https://breakermag.com/grin-founder-ignotus-peverell-on-life-after-launch-and-the-path-forward/ Conversation with Grin developers: https://medium.com/@BHEXOfficial/bhex-original-ignotus-grin-as-bitcoins-younger-more-nimble-brother-612efadd0478 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. Bit of news. Unchained is now on YouTube. You can find the most recent episodes there every week on the Unchained podcast channel, and we'll soon be getting the full archive up. Also, if you're not yet subscribed to my weekly newsletter, go now to Unchained Podcast.com to sign up. Within months, cryptocurrency anti-money laundering regulations go global. you ready? Avoid stiff penalties or blacklisting by deploying effective anti-money laundering tools for exchanges and crypto businesses, the same tools used by regulators. CyperTrace is securing the crypto economy. My guest today are Daniel Lundberg and Michael Kordner, core team members of Grin. Welcome, Daniel and Michael. Hi, Laura. Hi, how are you? Daniel, why don't we start with you? Tell the story of Mimble Wimble, the technology that spawned Grin. For listeners who don't know the tale, like Bitcoin's origin story, it has a mystery at its core that makes the technology even more intriguing. Sure. So Mimble Wimble is a privacy-enhancing and scalable protocol for a blockchain.

Its name comes from the tongue-tying curse in Harry Potter that prevents afflicted from spilling secrets. It was originally proposed in 2016 by a pseudonymous person called Tom Elvis Jeddussor, which is the French equivalent of Lord Voldemort from the Harry Potter series. And it was shared as a text file on the Bitcoin Wizard's IRC room through Torlink. The link to the paper was dropped there and then this person disappeared and we haven't heard from them again. And Michael, why don't you tell how that led to the development of Grin? Sure. Well, I mean, as Daniel just said, that paper was dropped.

And then a few months later, in around, say it was around December of 2016, someone again appeared on the same channel by the name of Ignotus Peverell, who was another character in the Harry Potter series, who was, I think he stole the invisibility cult from death. I think that's the reference there. And he said he had put together a new implementation of the Mibble Whipple Protocol. And it was called Grin. And he had the source kind of uploaded and ready to go. And then the project kind of took off from there.

Wow. Whoever would have thought, well, I'm sure J.K. Rowling never would have thought that her creation would be used in this manner. But I do think the names and the technology do go well together. So why don't you guys describe what Grin is or is trying to be? Okay, sure. Well, I mean, Grin's main goal is to be better money. And it's what it is, it also builds itself kind of on our homepage as a lightweight implementation of the Mimbo-Wimbo Protocol.

So even though, I mean, Grin is an entire blockchain in itself. And on top of just the core kind of Mimbo-Bor protocol, there are all sorts of decisions and things that have to go into the building of a working blockchain. But it aims to be very, very, very kind of light and as kind of non-prescriptive as possible as to how it deals with, as to what it is, basically. So one of the big important points of the Mimba Wimba Protocol is that it allows you to verify transactions being valid without having to store the entire history of the blockchain, unlike previous methods and protocols of blockchain.

It builds on previous research. A lot of it's made by Gregory Maxwell in confidential transactions, one-way aggregated signatures, coin join, and a new thing called cut-through. And it basically allows you to store much less data on the chain and in general, much less information. So in Mimble-Wimble, there are no amounts. You don't need to have addresses stored on the chain. And instead, what you keep on-chain is a very minimal set of data,

which is basically a set of inputs and a set of outputs that are cryptographically blinded, you could say, and don't really mean a lot to anyone aside from the people who are actually involved in the transaction. This allows for much easier sinking, faster sinking, and less size of the blockchain itself as well, which is why you're getting these scalable properties. Yeah, when I was learning about this, there was something really sort of mind-blowing. It's just like if you really understand Bitcoin, then, yeah, you're like, oh, this is kind of a better way to do it. you know, just with that level of efficiency or kind of the lightweightness of the blockchain, it just, it just feels like this was built by somebody who deeply understands Bitcoin and kind of

what the problems are with it. So what about the technology captured your imagination? Why, out of all the different crypto projects, did you decide to work on this one? Okay, well, I first came across the project. It was a few months after it had been put out there. And I was kind of, the technologies that kind of go into, and I block chain development and cryptography, applied cryptography, rather. It's kind of a lot of stuff that really kind of, that I like doing just kind of from a technical perspective,

kind of I enjoy coding on it. I enjoy working on it. And obviously, cryptocurrencies are interesting. And I was kind of looking around for one of them to join, but I didn't really see anything out there that was kind of, I thought would be worth joining at the time, not because the projects themselves are worth joining or joining, or rather because maybe they're too far along,

and there's not much I can add to it. Like, I couldn't see myself adding anything to Bitcoin itself at this stage. Other projects out there may be kind of, you know, a clone of Bitcoin with a change here and there, but nothing really substantial. But when I came across, you know, Grin and Nimba Wimbled, it's kind of clear to me that this is something really, really new and something that really had a lot of potential. So that's kind of why I decided to join it and start getting involved in it. And on my end, I've been following the crypto space since,

Well, I heard about Bitcoin maybe in 2011, dismissed it, bought the first Bitcoin in 2013, but was always on the sidelines and kind of monitoring and paying attention, reading, catching up on projects, made it through 2017 and all the craziness there. And there weren't really any projects that were appealing or speaking to me. Instead, I was kind of happy being on the sidelines. And then about a year ago, I found out about this project and about Mimba, and I basically fell down the rabbit hole and just couldn't stop researching it.

And I found this, you know, there were some presentations about the Mimba Women Protocol and that led me to grin. And I started lurking and reading up on the project itself and seeing these developers and development community that was very open, was very focused on building and had no intentions of, you know, making money from it or profiteering from it and were purely in it for the technology.

And early 2018, that felt borderline crazy and also like a complete breath of fresh air. That was really appealing to me and really encouraged me to get involved in the project. And at the same time as well, I was doing some research for my day job back then about Bitcoin transactions and the regulatory requirements around that and accepting and receiving Bitcoin deposits and withdrawals. It was pretty much at the same time. It had like a profound impact on why I chose to go into Gryn was that you would see these guidances from regulators telling companies that in order for you to accept payments from customers, you need to go through, you need to have the deposits as they come in, go through an analysis tool. So like a third party KYC analysis tool like some of the well-known actors in the space. And based on the score, you can then choose to accept the deposit or otherwise you have to refund it and return it back from where it came from.

And this was just mind-blowing for me because essentially what this means is that you establish some kind of, it's almost like a credit score, but it's about a score of how good your money is. and that made me think a lot about fungibility and why it's very important to have fungibility on the base layer of the protocol in order for companies to be able to transact in a way that doesn't create a huge amount of friction. Yeah, in a way it's like, of course, you know, obviously we do know that when there are crimes that happen with money, then often the people who transact with each other are potentially both engaging in something illicit. And yet, on the other hand, you could also be the recipient of funds that were involved in illicit transaction and have no idea. So, but I actually,

I wanted to go back and ask you to expand a little bit more in the philosophy of Grin when you were talking about how it was a breath of fresh air and, and stuff like that, because I do agree that there is something pretty different and striking really about Grin's approach. And I, Yeah, I want to kind of pull out more of what differentiates Grin from some of the other recent projects. Sure. So Grin's mainnet was launched on January 15 this year. And before that, it'd been in development for about two and a half years. And from the get-go, it's been done as a completely open-source project driven by the community,

funded by the community as well. any development funding we see that has been based on donations. There's been no ICO, there's no pre-mine, there's no dev tax, there's no anything essentially that allocates funds through the protocol layer to the development team. Instead, it was fairly launched, meaning that anybody who wanted could mine it. It's a proof-of-work mined coin. and it's open for anybody to use and there is no incentives or no special circumstances that benefit early adopters or early contributors more than anybody else.

Yeah, we're going to talk more about that because I think I do see how it's inspiring and yet I also think it has led to some hurdles, I guess I would say, that you guys have faced. But another thing I wanted to expound upon a little bit was the comparison of Grin to Bitcoin. And we talked about kind of some of the similarities and also some of the differences. But one thing also that's kind of different is that they seem to have different goals. Bitcoin is now being thought of as a store of value while Grin is aiming to become a medium of exchange. Why did the project decide upon that goal? Okay, well, I think a lot of this refers back to our emission schedule.

Now, when we start comparing grid and Mimba Wimbo, we have to be a little bit mindful of, sorry, when we're comparing Grin and Bitcoin, we need to be a little bit mindful that, you know, Bitcoin was launched 10 years ago and was a completely new technology at the time. So some of its original, kind of its original purposes may not have been what it turned out to be. So, I mean, the paper itself stated that Bitcoin was supposed to be digital cash since it became clear that the emissions or the very limited emission schedule of it, you know, led to a good amount of deflation. The story since been changed to say, no, well, now it's a, now it's a store of value. in our case in grinned we very much would like you know as a as bitcoin was originally meant to do but we would like grin to be used as a medium of exchange as opposed to a historic value

which is why we've decided on a kind of a very simple emission schedule as in one one grin per second 60 grins per block basically forever instead of having a very limited schedule so this is something i wanted to ask about because so obviously the the emissions schedules seem different on the surface because Bitcoin has the 21 million Bitcoin cap, which incentivizes people to get a piece early, like a Bitcoin or a fraction of a Bitcoin and hold on to that. And that would then drive up the value of all the Bitcoins. So Grin's approach is different because there is no cap, but there's this consistent inflation in perpetuity of one grin per second. But the thing is that they have the same outcome.

like over time, Grin's emission rate will have the same effect of the block reward havings in Bitcoin. And what I mean by that is in Bitcoin, the inflation was high in the early years. There were 50 new bitcoins every 10 minutes. And that's when the circulating supply was low. Then it dropped to 25. And then it's now 12.5. Soon it'll be 6.25. And then even though in Grin, there are no halvings, the emission rate by staying constant starts out as a high price.

percentage of circulating supply and then eventually just becomes a smaller and smaller percentage over decades, which basically results in it eventually being somewhat negligible. So in that sense, that's how I'm confused. Like, how can Grin go after this medium of exchange goal and try to get people to use it? And I even saw in your documentation that you believe that this monetary policy will discourage hoarding. But I don't understand how that will happen if the effect. of the monetary policies seems to me, at least, to be the same. Maybe there's just something I don't

understand. No, no, I think you're right. And I think that's a fair point. I mean, it's not so much that, you know, there's a halving or there's a limited number. It's that the inflation rate is predictable. And so we know how many grins there are in circulation now. We can point to 30 years from now and we know how many they're going to be in that. So that's really what we think the important thing is here. as far as it, you're right, the inflation rate approach is zero, basically. So you get to a point where you might as well not be mitting any more grins because, you know, there's basically, you know, no appreciable inflation going on after a while. But to be honest, honest, this, I'm going to kind of go around saying that the choices that

grin is making in this regard are very conservative. And, you know, this is absolutely, as far as I know, the first major coin to do this, as in to not to have a having and not to have a limited emission schedule. So I don't think we could have gone out there and instead, you know, created an inflation schedule. I mean, kind of at this point in cryptocurrency development, even what we're doing now is a very, very radical approach. And we hear all sorts about it everywhere we go.

Yeah, I was about to say, and it's great that you pointed out, Laura. And it really is a conservative approach. and personally I would have loved to have more inflation because these were the questions I was asking myself as well when I got involved but the amount of I think like the comments, the commentary on the sidelines and from people kind of approaching the project

I think the narrative has a big role to play here and when Grin's emission schedule is quote unquote unlimited it has a lot of effect on people's minds and how they approach the coin. We've seen that just in the comments. I'm not sure that's going to last and it's going to maintain itself, but it very much, I think, has this effect of thinking that, all right, Grin is not going to be worth much more.

Everybody's kind of saying, oh, it's doomed, you know, the value is going to go down so much, which is great, in my opinion, if you're trying to build electronic cash-like functionality, because then people are not going to think twice about spending it, which is really what's important in order to drive adoption. I would have loved to see, like, over time, you know, much more aggressive inflation. But I think, as Michael was pointing at, this was already a very radical step, apparently, in the space. And I think at least we're going in the right direction.

And to be fair, also to point out, I don't think it would have been possible to have this. if it wasn't for the success of Bitcoin, right? In a way, we're standing on the shoulders of Bitcoin, having proven the concept of a cryptocurrency to some degree, and I don't think it would have been possible with unlimited emission back in 2009. But because of Bitcoin, we can now take it one step further and say, right, this is an unlimited emission, is still very conservative. One other thing that I was wondering, though, is if you, so essentially, you know, as I

pointed out the inflation rate, the way or the emission, you know, at least, yeah, you can push this narrative that it's going to be different from Bitcoin. But, you know, like I said, in effect, it is pretty much the same. But the other thing is, so with Grin, unlike with Bitcoin, well, no, actually, in this regard, I guess they're sort of similar because somebody needs a Bitcoin address. But anyway, so to send somebody grin, you know, they have to agree to accept it. But, but like who's going to want to accept a new currency if the narrative is that it's going to quickly depreciate. So in that regard, like how do you plan, you know, if your goal is to get medium of exchange, then how are you going to do that? And is there some plan to get stores

to accept Grin or like, how, you know, how are you going to, yeah, make this medium of exchange goal happen? Sure. I think I think it's very early days in the project's life cycle at this stage where Grins is only a few months old. So this is something that is going to have to take some time to grow and mature as the ecosystem involves. There are, right now, I would say, the main use cases are buying Grins and putting them in a wallet, right? Or you mine grins and you have a mining pool and you cash out from the mining pool

and either to an exchange or you put it back into your wallet. I think that those use cases are going to be dominating for a while now. Over time, though, because there are more grins minted every day, every second there's a new grin put out in circulation. There's going to be a lot of users holding a lot of grin, and some businesses are going to find that attractive in terms of speaking to like an audience where they can sell products to specifically catering to us because they accept grim. That's one way of starting to get some early adoption. Another way that will happen over time once there's a big enough user base, or even the other way around it could also be, is for businesses and individuals who have needs to transact privately, right? And this will drive adoption. And it doesn't, in my opinion, it doesn't matter much whether there's a depreciating pressure on the green assets themselves if you're able to transact with them and then,

easily cash in or out to another currency, like Bitcoin, for example. Yeah, so I guess we'll see because obviously Bitcoin has the most traction out of any coin. And so maybe, so that could simply be the main selling point is, you know, in order to use this for a transaction, is transactions is that it's like Bitcoin, but private. Absolutely. Yeah. Sorry, I was just just pointing out. there, you can say it's like Bitcoin and private. But I mean, we do have some, you know, technologies coming up, like for instance, the ability to do atomic swaps with Bitcoin, which we have. So there is also the use case of using kind of mimble-wimble, or using, sorry, the Grin

blockchain as kind of a way to further privatize Bitcoin transactions as in someone does a transaction in Bitcoin, then does an atomic swap with Grin and then a swap back. And then there's, you know, a greater level of privacy there. Yeah, so let's actually talk more about the privacy feature of Grin. What are the different ways that the protocol enables privacy? Okay, sure. There's a few different things. First off, amounts on the blockchain are completely obfuscated.

Transaction structure by the time it gets to the blockchain is obfuscated or compressed. Basically, when I look at, you can, I mean, you can try this now. if you look at an aggrant blockchain explorer and you look at the data that's in the in each block, there's basically there's nothing there identifying. It basically looks like random data. And that's down to kind of the mathematical trickery that happens with Mimble Wimble. So instead of, you know, having one transaction, you know, one signature per output, you kind of have everything kind of put together amalgamated into kind of one very compact block, so to speak.

And why don't you talk also a little bit about like coin join, confidential transactions, the Dandelion Protocol, some of the other features? Yeah, sure. So, I mean, the Dandelion Protocol itself, I mean, that's not specific to Mimble, Wimble in particular. That's something that's kind of on top. And that's, what that does is it's meant to hide the transaction graph. So if I'm, say, you know, a three-letter agency and I have, I'm able to monitor, you know,

a good portion of the network. I can see, you know, where transactions went, or if a transaction was suddenly broadcast to all its peers, I should be, I could potentially get a good idea of, you know, what machine that transaction came from. So Dandelion attempts to, to obfuscate that a bit.

So instead of, you know, when a node receives a transaction, it doesn't broadcast to all its peers, but it will send it off to another node, which will send it off to another node at random. And that's called the STEM phase, which is why it's called Dandelion.

So one, one node to another note to another node and then randomly at some point one of the nodes will say right and we'll have the fluff phase where all of the, you know, that particular node will broadcast a transaction to all its known peers.

So by doing that, you've kind of you've obfuscated the path. If you get a transaction, you're a node and you get a transaction. It's not necessarily obvious where it came from and that's what Dandelion is supposed to do. Other features. coin join is kind of built into it.

There's not like, you know, the coin join in Bitcoin is a bit different, but we kind of use the term a little bit, just kind of more for clarity of explanation. What happens is because in a mimble-wimble transaction, it's not about signing individual outputs. It's kind of, it's about putting all of the inputs and outputs in a single transaction together and making sure they sum up to zero.

Right. So when you, if you can do that, you have a notion of something else that's called Cutthrough, which we talked about, where we kind of touched on a bit earlier. So if all your inputs and outputs in a transaction equals zero, well, surely you can start cutting out some of these outputs,

kind of on either side of the equation. So I could potentially do a transaction that involves certain inputs, and then without any confirmation, do another one and another one. And I can cut out the transactions that happens in the middle. And that's the notion of cut through.

And again, that goes towards adding some privacy. And that's like if I send you a payment and let's say it's for 10 grin and then part of the inputs that were used. Well, actually, so how would this work? So, okay, so let's say that I send you 10 grin and then you turn around and you send 10 grin to Daniel. then essentially what will happen is the cut through will make it look like I just sent 10 to Daniel directly. Is that right? Yeah, it will cut up the middle ones, as you say. And again, when you say look like it's, there's nothing that appears in the chain that identifies you or ties you to a particular address.

So it just gives you an extra layer of kind of obfuscation. Yeah, and we should say that there are no addresses even. and the only thing that are on the chain are these outputs and inputs. Some linkability is possible to do there, you know, because, you know, one output in one transaction is then being used as an input in a future transaction. But it makes it much harder to build up a valid transaction graph, and especially like monitoring the network if you're an analysis firm. But it's not perfect. And we have still a long way to go. And we're kind of constantly looking to make improvements and don't feel like we're finished

in terms of obfuscating data and making the chain more private. Yeah, it's probably a cat and mouse type of thing. Yeah. And I think already we're like we're well on our way, given what we're doing already as described and the fact that it's enabled by default for everybody on the chain, right? So a big part of privacy is hiding in crowds and amongst your peers. And because this is enabled by default on the protocol, anybody that's using Grin is essentially making it harder for privacy to be leaked.

We're going to talk more about this concept of having no addresses in Grin in a moment. But first, a quick word from our fabulous sponsors. Face it, regulations can stall or kill a fast-moving crypto business. New FafT and EU cryptocurrency AML laws are coming soon. You could be hit with stiff fines or blacklisted, no matter where your servers are in the world. Prepare now. Deploy the same powerful CipherTRACE tools used by regulators. Protect your assets.

Streamline your compliance programs. And keep your exchange or crypto business out of the regulators' crosshairs. Learn how effective anti-money laundering tools help keep your crypto business safe and trusted. Learn more at ciphertrace.com. unchained. Cipher Traces securing the crypto economy. Back to my conversation about Grin with Daniel and Michael. So as you mentioned, there are no addresses in Grin. This is yet another reason I was so fascinating by this technology. So how do people send each other money then? How do I send Grin to somebody if I don't have an address or addresses that I call my own? Okay. So you're right. There are no

addresses in Grin. What all you have basically is is a wallet, which is essentially. you know, a private key or a system for generating private keys that give you permission to spend outputs that are on the chain. So in order to build a transaction, there's an interactive element in the protocol, as in I have to send some data over to the person I'm transacting with who has to do something to it and then send it back and then post it to the chain. So it's, from a cryptographic standpoint, it's known as an interactive protocol, as in two parties have to transact with or interact with each other rather in order to create the transaction. And the key kind of part of that then means that this has to happen through some communications

channel, but it could be any communications channel that the sender and the receiver chooses to use. It could be a private chat. It could be, you know, written message. It could be any form of communication that allows the sender to interact with the receiver once and then the receiver to send information back to the sender. And that's it. And then that can be finalized and broadcast to the chain. Yeah, this was another thing that I thought was so interesting. Like, there's something about this architecture that reminds me a little bit of email in the sense that the protocol makes the transaction possible. But then there are many ways you could execute it. So like with email, you know, you could use your own email server or you could

use Gmail. And so for Grin, what are the different ways in which people can execute Grin transactions? The ScoreBet app here with Trusted Stats and Real Time Sports News. Yeah, hey, who should I take in the Boston game? Well, statistically speaking. Nah, no more statistically speaking. I want hot takes. I want knee-jerk reactions. That's not really what I do. Is that because you don't have any knees? Or? The scorebet. The scorebet. Trusted sports content, seamless sports bet. Download today. 19 plus, Ontario only.

If you have questions or concerns about your gambling or the gambling of someone close to you, please go to conicsonterio.ca. Local news is in decline across Canada, and this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void, and it gets harder to separate truth from fiction. That's why CBC News is putting more journalists in more places across Canada, reporting on the ground from where you live, telling the stories that matter to all of us,

because local news is big news. Choose news, not noise. CBC News. With Amex Platinum, almost every purchase made with your card can be covered with points, including new tastes, new fits, and virtually everything in between.

That's the powerful backing of Amex. Conditions apply. Okay, well, just a little bit of technical explanation. The absolute simplest way to send someone a transaction in the core, just kind of on the Mimbo Wimble protocol itself, is you send them a transaction or a partial transaction. And this would contain some private keys that are needed in order to spend the output,

and the other person puts that together with theirs and creates a transaction. So that's the simplest way to do it. But that obviously involves the sender revealing private keys, which causes also some other problems, so we don't do that. So in Grinn itself, we have something on top of that for doing a transaction exchange, and it uses snore signatures, and it requires one back and forth. So from the, say, this, the sender to the receiver and back in order for either party to build up a snore signature. So we can put together kind of the final signature without any one party having to reveal the keys to anybody else.

So the short, so, you know, from a practical standpoint, what comes out of that, That is the shortest way to form our transaction is from sender to receiver and back to sender. And already, kind of within the core software that we have, there's a few ways of doing that. So obviously, the kind of most maybe intuitive way of doing this would be via HTTP. So somebody runs a listener on their wallet and that's listening for senders to send money to the wallet directly. So that's an HTTP listener. The sender will send an ACP request and then the response will contain the rest. to the info to create the signature,

and then the sender can create the final transaction and post that to the chain. We also have a method of doing that via email, so you can send a file to somebody. So in your wallet, you generate your send file. You send that to the recipient, and at their leisure, they receive it, import it, so to speak, into the wallet,

and send the result back to the sender to finalize it and put it onto the chain. And again, you know, the actual number of ways you can do this from a technology standpoint are infinite. There's an experimental key base adaptist. Key base users can send to other key base users on the system. So, yeah, I mean, we'll probably talk a bit more about later of what we're doing to facilitate these kinds of transactions because our approaches, like I said, Greene is trying to be

non-prescriptive. So instead of saying, you know, providing one way of doing these, the transaction, we want to kind of provide the tools to enable the community to come up with, you know, the best or most appropriate ways to perform this transaction. And isn't there a way to do it with paper as well? You could. You could write everything down on a piece of paper and send it to somebody and they can type it all back in.

But yeah, absolutely. You can meet someone with a dark alley and a water paper and say, you know, here's your grins. And my, you know, part of a team that I'm involved with, we've also developed the system called Grimbox, which allows you to, it's essentially like an inbox for your grins. It's funny that you use the email analogy before, Laura. So everybody gets an address, but the address is not stored on chain or anything. It's derived from your private seed. And then you can exchange messages through a relay of servers that are federated, just like email,

and all these messages are end-to-end encrypted, so that only the send, and the receiver can actually be privy to the information of the slates. But it's essentially an example of how we envisage layer two solutions to deliver different solutions of the problem of exchanging message information and building these transactions rather than on the core protocol layer saying, right, this is the one way to best do this. Instead, it's encouraged that many different approaches are experimented with and kind of the one that works best is going to be the one that gets a lot of usage. And then one other thing that I was just thinking about was with Bitcoin, a lot of people have said that you could do kind of like fundraising for disaster recovery and stuff like that. You know, people could publicize their Bitcoin address and people can just push that out.

But is that like earlier, Michael, when you were talking about how you could use HTTP that's always just listening? Is that a way that that kind of crowdfunding could happen as well using Grin? Yeah, absolutely. As a matter of fact, we do have an example of that going for our own fundraising efforts. I believe there's an HTTP address that anyone can send Grins to with their wallets. And then for this round-trip communication that needs to occur to make a transatlanticry. transaction happen. Obviously, we know that ransomware has been a huge trend with Bitcoin where, you know, they hijack your computer or whatever and demand you pay them in Bitcoin. Does the setup of Grin make that any either easier or harder or I'm not sure how that would affect that trend?

That's a good question. That's not really something I've thought about. I mean, the people who use Bitcoin as ransomware are, you know, are not necessarily the cleverest people in the world because using Bitcoin leaves a massive trail behind as to where you are. I'd say the minute someone tries to actually spend that Bitcoin, there'll be people all over them. So, yeah, I'm not really sure. In a sense, you know, if they say here, it's my HTTP listener. I mean, they could be doing this through Tor as well. So, yeah, it could be quite difficult to track them as well.

So, yeah, it's interesting. It's not really something I've thought about too much. Okay. I guess if they take control of your computer, and then, yeah, initiate the transaction and you want to get the computer back, you would need to complete it, but then maybe it's actually worse because then since it's private, the ransomware people will like Grin better than Bitcoin actually. Yeah, I also didn't know the answer to that when I asked it, but just thinking it through

right now. Yeah, I mean, there are many use cases for private transactions that are maybe negative. but there was also many positive use cases for private transactions and a need for private transactions in general. And it seems like the example that you raised, if we've established that ransomware is possible today, and it's widely used and it works well with Bitcoin, I don't think it makes a big difference to the spread of ransomware with the technology like green. Maybe they switch to it, maybe not, but it seems like they've been able to do their, carry out their business regardless today quite well. Yeah, and I know it's so early in the life of Grin, but do you have any sense yet of whether criminals are interested in this form of money? Because for people who've listened to my previous episodes with Fluffy Pony of Monero and Zucco of Zcash, I did ask them a little bit about how they felt about the fact that,

but their cryptocurrencies did make crimes easier? I don't know. I mean, it's kind of like with the, does the fed, you know, criminals use cash as well. And I'm not sure, you know, what the Fed thinks about that. I'm sure the Fed is much more, you know, focused on kind of the wider economy than specific individual use cases for how cash is being used. I like to think of Grin as quite agnostic in that sense, and the protocol itself is not opinionated about use cases.

It shouldn't be. Just like cash doesn't really care how it's being used, it's just functional. And then there might be some individuals or organizations that are using cash in a way that breaks the law. And I definitely think governments and regulators should care about that, but it's not up to the transaction method itself to do that. Yeah. So let's also now apply the same thinking to the just, you know, the general uses for the technology. So we've been talking about how, you know, this protocol or Grin requires this like round-trip communication to make a transaction.

happen. And in the Bitcoin world or in the crypto world in general, a lot of people have talked about how legacy systems are pull technology, meaning, you know, you have to hand over your information and then the store or whatever that wants the payment from you has to contact your bank and request that money. And that pull technology is sort of prone to fraud. And then people have been talking about how Bitcoin is a push technology where you control the money and like cash, you decide when the money gets sent out from your address. And that, of course, then puts the burden on users to not lose their private keys. So in this case where Mimble Wimble is like different, how would you, how do you think it will affect behaviors around money and what kinds

of financial problems do you think could happen or, you know, sort of like the push pull thing? or do you think that it sort of resolves all kinds of issues with that? I think it actually improves a bit on the model with Bitcoin from a practical perspective of accepting payments from users. Again, kind of thinking in the context from like a business, one of the problems or challenges, I should say, with accepting Bitcoin is that users are proud to do a lot of errors and mistakes. And by having this interactive protocol where,

basically in order for you to receive a green transaction, you have to actively get involved in order to process it, which means that it's not possible for somebody to just send money to an address of yours in the blind, like a HTTP address or something. You actually have to actively respond and send information back to the sender, which means that it's very easy to reject transactions, which allows transaction flows to be more robust in a way. So you don't have this issue of some user sending address to an address they shouldn't be doing,

and now you have to figure out what happened and return the funds back to them, or if some unauthorized person is sending you cash, which might sound a bit strange, but a lot of businesses actually are very careful about making sure that they only receive payments that they're supposed to receive, otherwise their bookkeeping doesn't add up. With Grin, it becomes easier to do so because you can basically run checks and validate, and indeed you're supposed to receive this payment and otherwise reject it. All right. So let's talk a little bit more about some of the other features of Grin.

So Grin does not have something called scripting, which Bitcoin has. So what are some examples of things you can do with scripts in Bitcoin but not in Grin? But then I, you know, Michael, I think also did mention now you guys still have features like Atomic Swaps. And I think there are a few others. what are some of the other features that you were still able to retain anyway? Right. So, I mean, AtomicS fault is one example. There's something that's been kicking around in Mimba Wimble circles with the notion of script-discreet.

And what that means is, it means kind of cryptographic tricks that you can do to enable kind of script-like functionality without actually having to go through, you know, without actually having to include a script. So one example of that. And again, this is all kind of theoretical stuff that we kind of have in a list for research a lot of it. Stuff like Lightning, we think we'd be able to enable that at some point after some research using kind of scriptless script tricks. There's the atomic swaps that we mentioned. There's, you know, time locked, relative time locked transactions, vaults, which, you know, at more kind of user level security. So like a lot of things like meaning like meaning if I want to do a transaction for a large amount or something, then there's a delay built in so that people can't rob me. Yeah, absolutely. Yeah. And if someone tries to then there's a case where nobody gets the money. So there's there's less incentive for people to even try in the first place. And so what are scriptless scripts? So first of what can you describe what scripting is and then what scriptless scripts are? I think in terms of saying what scriptless scripts are, it's not a, it's not a scriptless scripts. It's not a, it's not. It's,

if there's a, you know, it's a script-discreet, is it particular anything? It's more of a, more of a trick that's done to enable something you could do with the script. So, for instance, at a kind of mathematical level, there would be some trickery

about, you know, adding one to something or using the number one in kind of creative ways. So you couldn't point to, you know, a set of things and say, these are script-a-scripts. It's very much about, you know, tricks to enable to enable scripting like behavior. And scripting is a way of making Bitcoin programmable?

Yeah, it's basically some very basic smart contract functionality. Yeah. And in Bitcoin, like I mean, I don't think it's used all that extensively of the kind of standard exchange script. Stuff like you'd see, you know, Ethereum, you know, the biggest use case per Ethereum is to have, you know, smart contract enablement or the ability to develop smart contracts. Unfortunately, that doesn't fit in with the Mimba Luma Protocol because it's such a kind of compact form of a blockchain, that there's no room for it anywhere.

Yeah. And so, and the notion and concept of scriptless scripts is attributed to Andrew Polstra, who was doing nimble-wimble research early on. And it just basically allows you to implement some simple smart contract functionality that is off-chain in a way. And you don't need to, basically, it's, you don't only check signatures or present and correct and it's derived through using snore signatures. And what are schnoor signatures?

A snore signature is basically, it's a multi-user signature. So I can sign something or so I can create a signature for something. And someone else can create a signature for the same thing. And we can combine the two signatures together. You can basically add them together to get kind of one signature that's taken from all the kind of partial signatures. involved. So it's how we do the, um, their basic transaction in, in grid at the moment is instead of everyone revealing private keys, I just sign a part signature with my private keys. And the other person

signs part of their partial signature with their private keys. And then when you put that all together, um, you can, you can add the public keys and then the public keys will be able to verify the signature. So my, the added private keys equals the, the added public keys and it all works as if it was just one person created the signature. And if you do scriptless scripts, you're basically, or adaptive signatures, as they call, you're basically in a way hacking this by putting some, you know, these signatures, the private information could be, could be random, but you could also make, you know, putting some deliberate information that then can be used in your kind of off-chain smart contract in your course. Let's talk about your launch. What were some of the different features of your launch

and why did you choose those features? Okay, so I think the notion of like a fair launch in the sense that there wasn't any pre-mine or dev tax or any kind of design around incentivizing or rewarding development team, I think that was taken quite early in the project. I think a lot of it has to do with just keeping things simple and straightforward and also making things fair and transparent.

And it wasn't, it's just, you know, in a way, I think, you know, the more I've kind of been involved in the project, the more I think about it, it's what really makes sense. If you're looking at the big picture and thinking about what the end goal is, if the end goal is to, you know, get funded and have a little small development team working on a project, you probably would do it in a different way. But if you're trying to build almost something that could be a public good and you want to see like big picture long game thinking and want to enable like a healthy and thriving ecosystem surrounding your project, you need to allow equal access to getting involved and make it as easy as possible. And because there's no incentives for me to kind of, I'm not getting rewarded if more people are joining the project or not. and as a relatively, I guess I'm a relatively early user. But if somebody chooses to get involved in Green today, they have the same conditions as I do. And it makes it very easy to contribute

because you're not feeling that when you're contributing, that somebody else is profiting as a result of that. And it also allows us as a group and as a community to be very open and honest about the project itself. We're not necessarily selling anything because we have nothing to sell and we have no upside from it either. And I think that that is great in the sense that it keeps us very honest. And it allows also a community to build around the project.

Well, so then how do you feel about the fact that in the end, the early miners were these like special purpose investment vehicles devoted to mining grin. And they were funded by, I guess people were saying $100 million in VC money. Sure. I mean, that may be the case. I haven't seen the $100 million attributed to it. When I've been speaking to some groups and individuals, it seems like a lot of the investment of vehicles didn't participate in mining immediately. I don't know if they're doing it now. There's a lot of mining happening in China, but generally speaking, equal opportunity doesn't mean equal outcome. You know, if there were, we welcome everybody.

to use grin, to mine grin, and to participate in the project. Now, if there were groups that felt that the project was really exciting, and they really wanted to mine grin, and they wanted to devote a lot of resources into doing that, then they're free to do that. And I guess that's just good in general. We're an open project, and again, we don't really think about these things too much. I don't really see it as an issue necessarily.

And how did notions of fairness play a role in your decision to have those two different consensus algorithms with one of them becoming more dominant over time? Right. So it's just some background first. And before I'm going to answer that, Green is proof of work mind, as we said. And there are two proofs of work. They're all from the same family of proof of works called the Kuku cycle family, which was created by John Trump, which is also part of the court.

core team of Grin. And we have, we launched with two different algorithms, two variations of the Kuku cycle family. The first one is specifically tuned for ASIC manufacturing and making it as easy as possible to develop ASICs for it. And ASICs are like specialized chips that can be built specifically to mine grin. Exactly. Specifically to do anything, but then you could have ones that are grin. Exactly. So GPU is a type of ASIC, but it's a very generalized type of ASICs. But you can also make a specialized ASIC that only does one thing really, really well and efficiently. For example, mining this Kukatu ASIC-tuned algorithm.

So that's one of the proof of works. The second proof of work is ASIC-resistant, meaning that it's designed to be more GPU-friendly and incentivized GPU mining rather than something to develop ASICs for. And when we launched, the reward for the ASIC-tuned proof-of-work was 10% and the reward for the ASIC-resistant proof-of-work was 90%, meaning that 90% on average of all rewards would go to the miners who are mining the GPU friendly proof of work.

And this over time, the balance here between 10% and 90% changes linearly up until the second, once Grin has a two-year anniversary, it will switch to being completely 100% on the ASIC-tuned proof of work. So what we're saying is that we bootstrapped the network giving a heavier weight towards the GPU-friendly algorithm, and then over time, there will only be rewards after two years for the ASIC-tuned algorithm. And the logic for that is that essentially,

when Grin was in development, we noticed that there was a lot of attention being put to the project, and there were already, we heard rumors of ASICs being manufactured and so on. And we were worried about the disinformation, of the network, in a way to bootstrap the network was basically to devise this dual proof of work system, which is only temporary in a way to increase the decentralization and also not incentivize one or two big ASIC manufacturers with a lot of resources to kind of jump the queue and have an ASIC mine already from day one and take control of all the hash power on the network. but instead to have a gradual increase of this ASIC friendly proof of work and as a result, build a healthy, hopefully, hopefully healthy ASIC ecosystem where you have many different ASIC manufacturers competing and offering products to the market. And let's also go back to some of the comments you guys made earlier about how Grin does not have a dev tax, meaning that part of the black.

reward does not go to the developers. And so, for instance, especially, like I know you, Michael, who, you know, you go by the name yeast plume. You were trying to raise funds to pay for, you know, your time on developing grin from the community. And I saw that at first, at least, the campaign was not going very well. You weren't even trying to raise like a huge sum of money. And I think it was like, what was it, 55 pounds per year? Sorry, 55,000 pounds a year? No, it was a period. The rate actually that we're using now is about 9,000 euro.

So I say around 10,000 USD would kind of be our standard, what we standardized on is a month of developers time. Yeah. And I mean, that obviously includes taxes we have to pay. It's like the salary payment basis. that would get. Yeah. And at first, I think you were only raised like roughly a fifth or something and then it. Sorry, keep going. No, no, you're right about that, but that was, that was also the fourth time, the fourth campaign as well. So, I mean, I've been working full time on Grin since about,

uh, since February of last year. And since then, I've, I've done four funding campaigns and all of which were successful. Some of them, I mean, the first one was in the height of the, the Bitcoin bubble. So everyone was feeling wealthy. And I mean,

that campaign was funded in about, in about two days. The next one took a bit longer. The next one took a bit longer. The last one, which was done just around launch, it's stalled a little bit. But also,

there were, there are a lot of companies out there who've pledged to support great over the long term, as in, you know, put, you know, a mining pool might decide to give a donation of their proceeds into the Grin General Development Fund.

I think a lot of that was kind of being set up as well at the same time. So up until now, I mean, the community has been absolutely great. I mean, they've been very supportive and have, you know, have allowed me to be able to work on this full time. Oh, but actually, because that one fundraising attempt at least did not go very well, I know that Ignotis wrote a post expressing his or their disappointment with the lack of funding for your work. And they also talked about greed in the crypto community.

But I just wonder, you know, another, looked at another way it could also be seen as a problem of incentives. And like, do you feel like if you were to do it again, would you try to raise funds a different way that kind of harnesses incentives more? Okay. I mean, I don't think trying to, to, I don't think raising money is inherently evil or structuring yourself in such a way that, you know, injecting capital into your project however you want to do it is not necessarily a bad thing

as a matter of fact as we can see you know it's challenging to do things the way we're doing it but i mean this wouldn't necessarily be true for all projects that you know ever work on ever but in this case with rind i mean it's the first implementation of mimble wimble and and we think if you know if the project is run in such a way that it's it's obviously to benefit a small group of people, even if it's just, you know, for, you know, supposedly just to pay developers and nothing else, it still kind of diminishes from the notion of Grin belonging to everybody. If there's a dev tax and developers are only paid out of the dev tax, there's much less incentive for other developers to come along and join, you know, and make, you know,

contributions as you were to an open source project because, you know, they're all getting paid out of it. I'm not, why would I do this? So it's, it's, it's, it's, it's, It's challenging. It's not the only answer, but it's, I mean, it's the one that grin, it's kind of the path that grin has chosen, and, you know, we intend to stick to it. Yeah, and I mean, I've been kind of called a fanatic or incredibly naive when I say it, but, you know, the way I've been thinking about it, I don't really see another way of doing it that makes sense, essentially.

I think this is, it's hard. We're not, we're very frugal, which I also think is a good thing. and, you know, raising money in a different way, while you solve the funding problem, perhaps, you also open up the door for a bunch of other problems. As Michael was saying, you know, other developers might be less incentivized to join if they're not getting paid. How do you allocate funds? How do you handle all this administration of, you know, it's one thing. We have some administration now for the modest funds that we receive in donation,

but it becomes a complete different game if you're having hundreds of thousands or, millions even of dollars that you're supposed to administer and do it in the right way. And how do you ensure that funds get allocated to the right place, that they're used efficiently, and that all of this ultimately is actually benefiting your long-term goal? It's not obvious, and I don't think actually it's been proven in the space that having more money yields to better results. I haven't actually seen a single example of that at this stage. Yeah, this is one of those things where when you look at it one way, you know, you can see kind of one side and look at another way you see the other side. I definitely

maybe because, you know, we've seen that socialism maybe hasn't worked out super well in a lot of places. And maybe it's because, you know, going up here in the U.S., you kind of see like, okay, here's how capitalism works. And you sort of think, okay, it works well. But at that same time, you can live in a capitalist society and sort of kind of be into minimalism and be like, well, I don't want to buy a ton of things all the time because that's not a very satisfying way to live. So, yeah, I just, I look at it and I kind of go back and forth. You know, I do. There is something, it's like I was, I don't want to talk about, I don't want to mention who this person was,

but I was talking with somebody about Zcash and about the, uh, the developer rewards that they have. And, you know, that person kind of had a view that was like negative on the creators earning money from it. And I was a little bit confused at first. I just thought, well, they created it. They should be rewarded. But, you know, I know what you're talking about. If you're trying to build something that's for the community, it's just that, like I said, when I see also that, then you struggle a little bit to raise funds for the development. It just makes me wonder, well, like, could it have been done better? But anyway, as for your points, I actually wanted to expound on that a little bit more.

You've decided not to do a foundation for the governance of Grin. Why not? And how do you guys plan to govern Grin? Right. And so one of the early contributions I did was to have a look at foundations and do some research around that and see what the use cases for foundations are and how they apply to Grin in the context and whether we should have one or not. And as I was going through it, I couldn't really find any compelling arguments to why you would need a foundation, especially if you're trying to be decentralized. I think the main point maybe was to protect the trademark, to have like an entity that registers a trademark and protects it. But we really didn't see any point in trying to enforce that even.

And otherwise, I don't really see the use case for it as an official. I'm doing these air quotes again, but like as an official foundation. it becomes this centralizing entity, which now needs administration and organization. They need a bureaucracy for it. And then this centralized foundation is going to be making decisions. Even if you only support or fund projects, et cetera, you're effectively, you're doing, you're taking these decisions. And it creates structure where I'm not sure it actually adds any benefit.

In the research, however, we did conclude. that foundations are great in the sense that if other people want to put together a foundation and say you have a passionate individual that really wants to further a green development and say, hey, I'm going to put together a Green Foundation now. I'm going to create the structure and I'm going to give it a grant and I hand out money to development projects that are targeting Green. That's great. We encourage it. We encourage many foundations to be founded on these principles. However, there won't be an official foundation. And rather instead, and how like Grin's governance has evolved,

has instead been from having just ignoters as the main founding individual or group entity, a bunch of robots, nobody really knows who ignotuses or are, but now also having a technocratic council that essentially was created for the main the main purpose was to manage the multisig keys where funds, donations are being kept. So essentially, the moment you start accepting donations and funds, you create a layer of hierarchy. I think it's in a way inevitable. You can't really do it in a different way aside if you start going into governance research, like distributed autonomous organizations and so on, which I think is very much unproven.

difficult. We want to stay focused on really, you know, working on grin and not try to overcomplicate things. So instead there's this subset of individuals, nine people, Michael and I are part of them, that are part of kind of initially was part of managing the keys. But the general way of how governance decisions are being made today is in a very transparent fashion where we have bi-weekly meetings. So every other week there's a development-related meeting, and the other week there's a governance-focused meeting. And anybody's free to add points to the agenda,

and these will be discussed in the meeting, which are happening on our Gitter chat. Everybody's free to join in, and the points are discussed and decisions are being made out in the open in a transparent fashion. And the philosophy, I think, in general, is to just keep things minimal, minimal and transparent and open as far as we can and for as long as we can. And if there's no reason to change it, we wouldn't want to do that.

All right. So let's close out with one last question. Since launch, which was not that long ago, what are some of the things you guys have been working on and what can we expect from Grin going forward? Sure. Well, as I've talked about a little bit earlier, what we're trying to do is, is support the community in building tools on top of Grin. So from my perspective, anyhow, I'm doing a lot of work on the wallet software itself. But rather than trying to create the nicest GUI wallet there is, I'm spending all of my time focused on putting out an API or a set of tools for other developers to pick up and build their fancy GUI wallets on top of.

So in one sense, it's very much support the community and, you know, let them come up with solutions to some of the problems we've talked to. about an experiment and see what happens from there. On top of that, I mean, we have some of the additions to the core protocol that we've talked about. And I kind of described this as very kind of careful and considered introduction of new technologies into Gryn because while we have a long list of things that we think we know how to do, we can't guarantee, you know, when we're going to kind of have all the research

worked out in order to be able to enable them. So we'll be kind of slowly and measuredly adding features to the core grid protocol as we go. One of the things I'm very much excited about is the recent work by Ignotus to see, explore the potential of I2P integration onto Grin and support a more anonymous peer-to-peer network. Yeah, yeah. I think you guys have a very, very, very interesting project. So we will have to check back in to see what happens. Well, thank you both so much for joining us today.

Where can people learn more about you and Grin? Thank you, Laura. If you want to learn more about Grin, a good place to start is on our website, grin-tech.org. There's also a Grin newsletter every week that I curate. And if you want to reach out to me, you can always do so via Keybase or Twitter at Lennberg. And Michael, do you have a Twitter handle? Yeah, absolutely.

It would be at Yeastblum is my Twitter handle. And again, if someone really wants to find me, it's very easy to do so either through the Gitter channel or the forum, anything grid related. I should be able to find me there anyhow. Yeah, and I should also add that, you know, if you have questions, you want to be. to find out more about Grin. Join the Gitter channel. The community is very welcoming and receptive for anyone and, you know, get involved. All right. Great. Well, thanks so much for coming on Unchained. Thank you, Laura. Thank you for having us. Thanks so much for joining us today. To learn more about Grin, Daniel, and Michael, check out the show notes inside your podcast player. If you are not yet

sign up from my email newsletter, go to Unchainedpodcast.com right now to get my thoughts on the top Crypto Stories of the week, plus a preview of exclusive podcast content. And be sure to check us out on YouTube. Unchained is produced by me, Laura Shin, with help from Rayling Gallupoli, Prax recording, Jenny Josephson, Daniel Ness, and Rich Straffolito. Thanks for listening.