Privacy-Enhancing Technology (PET)

A cryptographic method where one party (the prover) can prove to another (the verifier) that a statement is true without revealing any information beyond the validity of the statement itself. This is foundational for privacy-preserving transactions and scalability solutions.

• Example: A user proves they have sufficient funds for a transaction without revealing their account balance.
• Key Property: Completeness, Soundness, and Zero-Knowledge.

A form of encryption that allows computations to be performed on ciphertext, generating an encrypted result which, when decrypted, matches the result of operations performed on the plaintext. This enables secure data processing by third parties (like cloud servers) without exposing the raw data.

• Use Case: Private voting systems or confidential smart contract execution where data never needs to be decrypted for processing.

A cryptographic protocol that enables multiple parties to jointly compute a function over their private inputs while keeping those inputs confidential. No single party ever sees the complete data set.

• Blockchain Application: Distributed key generation for wallets, preventing any single entity from holding a complete private key, and private data auctions.
• Principle: Security is maintained as long as a threshold of participants is honest.

Techniques used to obfuscate transaction origins and destinations on a blockchain.

• Ring Signatures: Mix a user's signature with others, making it computationally infeasible to determine which member of the "ring" actually signed. Used in privacy coins like Monero.
• Stealth Addresses: Generate a unique, one-time public address for each transaction sent to a recipient, breaking the link on-chain between the sender and the recipient's main address.

A system for publicly sharing information about a dataset by describing patterns of groups within the dataset while withholding information about individuals. It adds carefully calibrated statistical noise to query results.

• Blockchain Relevance: Used in on-chain data analysis and oracle networks to aggregate and share data (e.g., transaction fee averages) without compromising user-level privacy.
• Guarantee: Provides a mathematically rigorous definition of privacy loss.

A secure, isolated area within a main processor that guarantees confidentiality and integrity for code and data loaded inside it. Even the operating system or hypervisor cannot see inside.

• How it works: Sensitive data is encrypted for use only within the TEE (e.g., Intel SGX, ARM TrustZone).
• Blockchain Use: Enables private smart contracts and confidential decentralized applications where computation occurs off-chain in a verifiably secure enclave.

A cryptographic method that allows one party (the prover) to prove to another (the verifier) that a statement is true without revealing any information beyond the validity of the statement itself. This is foundational for private transactions and computations.

• zk-SNARKs: Used by Zcash and Aztec for private payments.
• zk-STARKs: Used by Starknet for scalable, quantum-resistant privacy.
• Applications: Private token transfers, identity verification, and confidential smart contract execution.

A digital signature scheme where a signer is anonymized within a set of possible signers, called a "ring." An external verifier can confirm a signature came from the ring but cannot identify the exact member who signed.

• Core Mechanism: Mixes the real signer's key with decoy keys (past transaction outputs).
• Primary Example: Monero (XMR) uses ring signatures, along with stealth addresses and confidential transactions, to obfuscate sender, receiver, and amount.
• Property: Provides strong plausible deniability.

A one-time address generation technique that enhances receiver privacy. For each transaction, a unique, publicly unlinkable address is created on behalf of the recipient.

• How it works: The sender generates a one-time public key using the recipient's public view key and a random nonce. Only the recipient, with their private view key, can detect and spend from this address.
• Widespread Use: A core component of Monero's privacy stack.
• Benefit: Prevents blockchain analysis from clustering all payments sent to a single entity.

A form of encryption that allows computations to be performed directly on encrypted data, producing an encrypted result that, when decrypted, matches the result of operations on the plaintext.

• Key Property: Enables confidential computation. Data can be processed by a third party (e.g., a cloud server or blockchain) without ever being decrypted.
• Use Cases: Private voting, secure data analytics, and privacy-preserving machine learning on sensitive datasets.
• Challenge: Historically computationally intensive, but advancements (Partial Homomorphic Encryption) are making it more practical.

A secure, isolated area within a main processor that guarantees code and data loaded inside are protected with respect to confidentiality and integrity. The enclave's contents are invisible to the host operating system.

• How it provides privacy: Sensitive data is processed inside the TEE, and only the encrypted results are published to the blockchain.
• Examples: Intel SGX used by projects like Oasis Network and Secret Network for confidential smart contracts.
• Consideration: Relies on hardware security and manufacturer trust, introducing a different trust model than pure cryptography.

Protocols that break the linkability of transactions by pooling and mixing funds from multiple users before redistributing them.

• CoinJoin: A collaborative Bitcoin transaction where multiple users combine their inputs and outputs, making it difficult to determine which input paid which output. Used by Wasabi Wallet and Samourai Wallet.
• Mixers (Tumblers): Can be centralized (custodial risk) or decentralized (using smart contracts or ZKPs).
• Goal: Increase fungibility by making coins of equal value indistinguishable from one another.

Protocols that break the linkability of on-chain transactions by pooling and mixing funds from multiple users, obscuring the trail between sender and recipient addresses.

• How it Works: Users deposit funds into a shared pool and later withdraw to new addresses, making transaction graphs difficult to analyze.
• Example: CoinJoin is a cooperative, non-custodial Bitcoin transaction structure used by wallets like Wasabi and Samourai.
• Regulatory Note: These are sometimes classified as Virtual Asset Service Providers (VASPs) under travel rule regulations, leading to compliance challenges.

Secure, isolated areas within a main processor (hardware-based) that guarantee code and data loaded inside are protected with respect to confidentiality and integrity.

• Function: Acts as a black box for computation; data enters encrypted, is processed in isolation, and results are output encrypted.
• Web3 Use: Used in confidential computing oracles and certain privacy-focused blockchains (e.g., early Oasis Network, Secret Network) to keep smart contract state private.
• Trade-off: Relies on hardware manufacturer trust (e.g., Intel SGX, AMD SEV), introducing a potential trust assumption outside the blockchain.