Confidential transactions
Also · CT · Pedersen commitment · Range proof
Confidential transactions hide the amounts of a transaction while letting the network verify that nothing was created. Liquid uses them and also hides the asset type.
On Bitcoin, every amount is public. Confidential transactions, described by Greg Maxwell in 2015, replace amounts with cryptographic commitments. A commitment hides the value but still adds up, so nodes can check that inputs equal outputs plus fees without knowing any of the numbers. Range proofs guarantee no output is negative, which would otherwise allow hidden inflation.
Bitcoin never adopted them, partly because of their size and because unconditional soundness matters more for a monetary base layer than privacy of amounts. Liquid did, and went further by also blinding which asset is moved. Participants can hand a blinding key to an auditor to reveal their own amounts. It is a different privacy approach from CoinJoin, built into the sidechain rather than layered on top.
In French · Transactions confidentielles
