Mimblewimble is a cryptocurrency system that aims to solve some of the privacy and scalability issues with Bitcoin. Bitcoin's blockchain stores all transactions in a public database, which must be downloaded and replayed by anyone wishing to verify the system's status. This creates privacy concerns, as the transaction graph can be analyzed by third-party companies. Several solutions have been proposed, including encrypting amounts and using CoinJoin to combine transactions. However, these solutions create more data and have other drawbacks.

Mimblewimble uses Confidential Transactions to hide amounts and One-way Aggregate Signatures (OWAS) to blur the transaction graph. To achieve this, Bitcoin Script must be removed, and the confidential transactions of Dr. Maxwell modified to allow combined transactions without interaction. The Mimblewimble system relies on Pedersen commitments, which encode amounts using a random blinding key. The commitments are accompanied by a range proof, which ensures that the amount is within a specified range. To validate a transaction, the verifier adds all output commitments, along with the transaction fee, and subtracts all input commitments. If the result is zero, the transaction is valid.

The r-values, or random blinding keys, act as secret keys, and their sum is required to create a transaction. By making the r-values known only to the recipient, Mimblewimble creates an authentication system. The system also combines transactions across blocks, allowing outputs to be created and destroyed as if they never existed. This reduces the amount of data required to verify the blockchain, making it more scalable. Mimblewimble also eliminates the need for pairing-based cryptography, which is potentially slower and more difficult to trust.

Mimblewimble's name comes from the Harry Potter universe and refers to a spell that prevents a person from speaking about a specific topic. Mimblewimble aims to prevent the blockchain from talking about users' information, improving privacy and security. The Mimblewimble proposal has received significant attention in the cryptocurrency community and has been implemented in several cryptocurrencies, including Grin, Beam and now Litecoin

MWEB (Mimblewimble Extension Blocks), which was first introduced in November 2019 as a Litecoin Improvement Proposal, is a fungibility-improving technology that enhances confidentiality between the senders and receivers in a transaction. Essentially, MWEB can be seen as a literal extension from Litecoin’s main chain, or a parallel highway, via which you can send coins to the extension block and back to the main chain. MWEB will provide users the option of sending “confidential” Litecoin transactions, in which the amount being sent is only known between the sender and receiver, as well as the benefit of having private address balances and increasing Litecoin’s transaction throughput.

At the core, MWEB is composed of two main sets of technologies, Mimblewimble and Extension blocks. Mimblewimble, which was named after the tongue-tying curse in Harry Potter, was a proposal set forth by “Tom Elvis Judesor“ in 2016, an anonymous Bitcoin contributor who figured out an efficient way of creating a more scalable version of Confidential Transactions with a few added features. On the other hand, Extension Blocks was a proposal set forth in 2017 by Bitcoin Developer Johnson Lau, becoming especially popular throughout the block size wars as a potential method for increasing the Bitcoin block size.

The addition of MWEB to Litecoin can be compared to Venmo’s payments application which provides the ability for users to transact publicly (everyone can see how much money you’re sending) or private (information only disclosed between sender and receiver), and being able to choose your preferred method as long as the wallet of your choice has MWEB integrated. One of the limitations of being an opt-in solution is that MWEB does not provide 100% privacy, but can be good enough for those simply focusing on using Litecoin as a means of payment for ordinary goods and services.

Due to Litecoin’s vast integration on exchanges, wallets and being available almost everywhere Bitcoin is, MWEB’s activation places Litecoin in a unique position. Essentially, Litecoin is now the the most widely accessible cryptocurrency with improved fungibility and confidentiality features. It is now the easiest cryptocurrency to obtain for one simply not wanting to broadcast to the world how much money they’re sending.

Due to Litecoin’s vast integration on exchanges, wallets and being available almost everywhere Bitcoin is, MWEB’s activation places Litecoin in a unique position. Essentially, Litecoin is now the the most widely accessible cryptocurrency with improved fungibility and confidentiality features. It is now the easiest cryptocurrency to obtain for one simply not wanting to broadcast to the world how much money they’re sending.