Beam (BEAM) brings together DeFi, privacy, and PoW

Developers of some blockchain projects seek to combine privacy technologies, the robust Proof-of-Work consensus mechanism and DeFi functionality, allowing them to take full advantage of the market by adding smart contracts. This can be found in the Beam blockchain, which will be discussed in this article.

What is Beam?

Beam is a privacy-oriented blockchain protocol that combines several innovative transaction privacy technologies.

The protocol launched on January 3, 2019. Beam has no known investors or partners in what strongly resembles the world's first Bitcoin blockchain protocol.

How does Beam work?

The Beam blockchain is powered by the MimbleWimble protocol, which combines technologies to ensure transaction privacy. Another well-known blockchain, Grin, has the exact mechanism. Unlike several other privacy-oriented protocols, such as Monero or Zcash, Beam provides privacy at the protocol level due to MimbleWimble. In protocols like Monero and Zcash, privacy features are implemented on separate, less reliable layers.

Let's list the technologies that are included in the MimbleWimble protocol:

CoinJoin is a feature that mixes transactions to increase their privacy. Several transactions from different users are combined into one, and then the cryptocurrencies are distributed to multiple addresses, which prevents communication between the sender and the recipient of the transfer;
Confidential Transactions (CT) — a transaction encryption feature to enhance privacy, created by former Bitcoin developer Adam Back;
Range Proofs is a method of hiding the number of transactions. Range Proofs only reveal to outside observers the range but not the exact amount of the cryptocurrency transfer;
Cut-thoughs — end-to-end transactions, according to which not all transfers are recorded in the blockchain. It is also referred to as "off-chain payments".

Beam cryptocurrency

BEAM is the primary cryptocurrency of the Beam network, similar to BTC in the Bitcoin blockchain. BEAM cryptocurrency is used for confidential transfers and payment of network fees. Beam also has a BEAMX token used to manage the BeamX DAO.

Like Bitcoin, BEAM cryptocurrency issuance is limited: the maximum possible number of mined coins is 262,800,000 BEAM. 148.1 million have already been mined and are circulating on the market — about 77% of the total issuance. The tokens were issued without pre-mining (pre-mine) and initial sale (ICO).

The Beam protocol also includes a bitcoin-like halving mechanism for reducing rewards: initially, miners received 80 BEAM per block mined. In 2020, the reward was reduced to 40 BEAM, and in 2024, it will be reduced to 25 BEAM and then halved every four years, similar to Bitcoin.

Miners can mine BEAM cryptocurrency using only the processing power of graphics processing units (GPUs). The Beam network is based on the Proof-of-Work (PoW) consensus mechanism, which is resistant to mining on ASIC devices in demand in Bitcoin, Kaspa, Kadena and Grin networks.

BEAM has a capitalization of just $17.7 million, and the cryptocurrency is ranked 764th on CoinMarketCap's list. The BEAM cryptocurrency has never had an impressive capitalization: at its peak in April 2021, it was around $164 million, which is relatively low even by the standards of the crypto market.

This is because private cryptocurrencies, as practice has shown, are not in high demand. In addition, they are often removed from crypto exchanges at the request of regulators, and some exchanges themselves are reluctant to work with such assets for fear of getting "dirty cryptocurrencies" and subsequent legal proceedings.

BEAM cryptocurrency price at the time of writing is $0.12, more than 95% lower than the all-time high (ATH) reached in January 2019 at $3.18. BEAM is not traded on major crypto exchanges. Among the well-known exchanges where you can buy and sell BEAM cryptocurrency are Gate.io, CoinEx, BitForex and MEXC, which do not have an excellent reputation among users.

What are the prospects for Beam?

Considering the past 5 years trend, BEAM's prospects are not good. Despite the growth of most cryptocurrencies in 2021 due to bullish investor sentiment, BEAM cryptocurrency has never been able to update its all-time high or at least come close to it. In April 2021, its rate reached only $1.91, 66% lower than ATH.

Added to this is that, as we said, the demand for confidential cryptocurrencies remains not very high, but since November 2023, BEAM's price has increased about 4 times amid a local bull market. However, in terms of capitalization, BEAM is not even in the top 20 privacy-oriented cryptocurrencies, a list topped by:

Internet Computer (ICP),
Monero (XMR),
Oasis Network (ROSE),
Zcash (ZEC).

There is no reason for BEAM to even come close to the leading confidential cryptocurrencies. Even Worldcoin launched in 2023, has already entered the top five leaders of this category of cryptocurrencies. This does not mean that the rate and capitalization of BEAM will not grow, but we should hardly expect any impressive heights from this cryptocurrency.

Nevertheless, the Beam team continues to work on the project and periodically releases updates, which is undoubtedly a positive sign. For example, the developers have added confidential smart contracts to the protocol and created bridges for asset exchange between Beam and Ethereum networks. In addition, the Beam ecosystem includes DEX exchanges, confidential stablecoin and an NFT gallery.