Computational and Transactional Privacy — A Deep Dive/Commentary

Transactional privacy is the process and act of obfuscating transactional data on-chain between users through the use of encryption and other techniques.

Because publicly visible blockchains have all data perfectly visible and tractable (not to mention immutable) users have been put into situations where new decentralized technology is transparent to the point that legacy financial systems have significantly more privacy for users then their decentralized alternatives (grant it, such privacy is made possible through trust and liability being placed squarely at the feet of said centralized financial institutions).


Their is a whole host of users that are going to be in for an unpleasant surprise when regulators reach out to them due to lack of transactional privacy.

How do you tax a transaction where the underlying entities and transaction amounts are perfectly unknown?

Privacy is freedom from monetary, data, and physical censorship.

Ultimately, privacy is a human right.

For those that are creating the next generation of privacy preserving technologies the answer is simple: build it, and let the users decide if it is important enough that they will begin to use the technology instead of alternatives.

Transactional privacy as it pertains to monetary transactions is in my opinion just important as freedom of speech as the freedom to spend your money how you want is in and of itself a form of free speech.

Computational Privacy

Computational privacy is focused on computations on encrypted and private data that result in some form of valuable output.

What’s more is that until enterprises are able to safely share data sets and have smart contracts compute across encrypted data (i.e. computational privacy) there is value that will never be brought onto DLTs as a settlement layer.

Why should developers care about computational privacy? Because programmable privacy empowers developers to build apps the way they want to — granular control over what data is encrypted and unencrypted allows for more flexible design and implementation decisions.




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Carter Woetzel

Carter Woetzel

Author of “Building Confidence in Blockchain — Investing In Cryptocurrency and a Decentralized Future”