Privacy of transactions is a much-desired property of blockchains.
However, due to its very nature, especially in public blockchains, everything is transparent, thus inhibiting its usage in various industries where privacy is of paramount importance, such as finance, health, and many others.
How Modern Cryptography Protects Your Transaction Data (Part 2)
There are different proposals made to address the privacy issue and some progress has already been made.
Several techniques, such as Indistinguishability Obfuscation (IO), usage of homomorphic encryption, ZKPs, and ring signatures.
All these techniques have their merits and demerits and are discussed in .
Privacy Privacy of transactions is a much-desired property of blockchains. However, due to its very nature, especially in public blockchains, everything is transparent, thus inhibiting its usage in various industries where privacy is of paramount importance, such as finance, health, and many others. There are different proposals made to address the privacy issue and some progress has already been made. Several techniques, such as Indistinguishability Obfuscation (IO), usage of homomorphic encryption, ZKPs, and ring signatures. All these techniques have their merits and demerits and are discussed in .
Why This Matters for Blockchain Technology
Understanding Privacy is not just an academic exercise — it has real-world implications for how blockchain systems are designed, deployed, and secured. Whether you are a developer building decentralized applications, a business leader evaluating blockchain adoption, or a curious learner exploring the technology, this knowledge provides a critical foundation.
Key Points to Remember
- Privacy Privacy of transactions is a much-desired property of blockchains.
- However, due to its very nature, especially in public blockchains, everything is transparent, thus inhibiting its usage in various industries where privacy is of paramount importance, such as finance, health, and many others.
- There are different proposals made to address the privacy issue and some progress has already been made.
- Several techniques, such as Indistinguishability Obfuscation (IO), usage of homomorphic encryption, ZKPs, and ring signatures.
Conclusion
Privacy represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.