Pro
On-Chain Privacy
Key Insights
- On-chain private transactions, where the sender and receiver are hidden, are primarily enabled through payment networks, application level mixers, and programmable privacy on Layer-2 scaling solutions.
- Monero and Zcash are two of the most widely used privacy-focused payment networks by transaction volume and offer tokens that are accepted as payment at thousands of off-chain merchants worldwide.
- Tornado Cash followed in the footsteps of early Bitcoin mixers by mixing pooled deposits to break the on-chain link between the source and destination addresses involved in a transaction.
- The Aztec Network and Polygon Nightfall developed dual rollup schemes to push interoperable privacy into Ethereum’s scaling infrastructure.
Blockchain networks are transparent by nature. All accounts and balances within these pseudonymous networks are available for anyone with an internet connection to see. Although this may be great for data analytics companies to track user transactions, most users could be opposed to flaunting their financial status.
Currently, there are three main technologies in the crypto space to enable user privacy:
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Ally is a Research Analyst on the Enterprise team at Messari. Prior to joining the team, Ally worked as a Structural Engineer at Magnusson Klemencic Associates. Ally graduated from the University of Illinois in 2018 with a master’s degree in Civil and Structural Engineering.
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