Mastering Blockchain - Second Edition

Confidential transactions

Confidential transactions make use of Pedersen commitments in order to provide confidentiality. Commitment schemes allow a user to commit to some value while keeping it secret with the capability of revealing it later. Two properties that need to be satisfied in order to design a commitment scheme are binding and hiding.

Binding makes sure that the committer is unable to change the chosen value once committed, whereas the hiding property ensures that any adversary is unable to find the original value to which the committer made a commitment. Pedersen commitments also allow addition operations and preserve commutative property on the commitments, which makes it specifically useful for providing confidentiality in ...