What is Private Transaction?
A private transaction is a blockchain transaction where some or all details — sender, recipient, amount, or data — are concealed from public view while still being verifiable through cryptographic proofs.
WHY IT MATTERS
Public blockchains are transparent by default — every transaction is visible to everyone. Private transactions add confidentiality while maintaining the blockchain's verification properties, using techniques like zero-knowledge proofs.
Privacy levels vary: Tornado Cash mixed transaction trails, Zcash shielded pools hide all details, and Aztec enables private DeFi transactions. Each uses different cryptographic approaches with different tradeoffs.
The regulatory tension is real: privacy is a legitimate need (salary payments, business transactions), but regulators worry about money laundering. Solutions like compliance-compatible privacy (proving source of funds without revealing identity) are emerging.