Blockchain Privacy and Confidentiality and Transparency of Steem Blockchain

Blockchain Privacy and Confidentiality

Blockchain technology has spread in different fields of life. It's decentralized nature is captivating in different areas of daily life. It helps to revolutionize the world. It offers secure and transparent system. But except these benefits blockchain is also vulnerable to different privacy and confidentiality challenges. Due to its a lot of penetration in daily life these challenges poise losses and they need to be controlled.

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What Does It Mean for Blockchain to be Transparent?

A blockchain is a digital ledger of digital transactions. It works like the traditional transaction ledger but it is unique in its transparency. All the transactions in a ledger are open to the public. Moreover blockchain transactions are stored in different computers because of decentralized nature. And due to this transactions cannot be changed.

All the participants have equal access to information. It reduces the involvement of the third parties and increases the trust. Similarly Steem is also a blockchain based platform. It offers transparency in the transactions and all the transactions are publicly available. There is no need of the involvement of any third party while performing any transaction in the Steem blockchain as well.

Privacy Concerns in Blockchain

The openness in the blockchain technology also offers privacy related issues. These issues are given below:

Public Accessibility: In public blockchains such as Bitcoin or Ethereum, every transaction made and address involved are visible to everyone else. But addresses are not specifically meant to disclose one’s identity, yet it is possible in some instances for people to get a hold of who they belong to using various methods, thus endangering privacy.

Transaction Linkability: Although transactions on a blockchain are pseudonymous, patterns and relationships can be revealed through multiple transaction linkages. The moment an individual has been associated with an address, all the related transactions can be reviewed thereby leading to compromising privacy of individuals.

Data Permanence: Once data is written into a blockchain it becomes immutable i.e it cannot be deleted or changed. This permanence has the advantage of ensuring data integrity but also means that any sensitive information that may have been mistakenly disclosed cannot be erased.

Enhancing Privacy and Confidentiality

There are several techniques and solutions that have been developed to address these privacy issues. Some solutions are given below:

Zero-Knowledge Proofs: It permits one party to demonstrate to another that they know something without divulging any details about what it is they know according to Eric.W For instance , Zcash uses ZKPs for shielded transactions where transaction details are encrypted and only verifiable by transacting parties.

Confidential Transactions: In some privacy-centric cryptocurrencies like Monero, confidential transactions are characterized by hiding the transaction amounts to be transferred. This is done through cryptographic techniques such as stealth addresses and ring signatures,

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Private and Permissioned Blockchains: private blockchains are those whose access rights are restricted only to authorized participants; this implies that they have permissioned blockchains. To enable only certain individuals or limited groups of people view particular transactions or data, these blockchains are able to employ access controls and encryption mechanisms which enhances confidentiality.

Mixing and Tumbler Services: Difficulties in tracking where money comes from and where it goes in large numbers of transactions can result from mixing services. Even if they work well, these platforms are often connected with illegal actions and they also encounter regulation challenges.

Multi-Party Computation: Blockchain technology makes use of multi-party computation (MPC) protocol that allows collective computing over participants’ private inputs. Confidentiality can be increased within blockchain systems by performing computations on encrypted data using MPC algorithms in which parties combine their encrypted data before performing operations on them together.

The Role of Regulation

Technical solutions are not enough to improve the privacy and secrecy aspects, regulations also matter. Governments as well as regulatory bodies increasingly being aware of the balance between blockchain transparency and privacy. Laws like GDPR in Europe that stress on privacy rights and safeguarding personal data have made it necessary for blockchain developers to factor such principles when designing their products.

Conclusion

In the blockchain technology privacy and confidentiality are two very important things. As we know, blockchain provides security as well as trust. But the blockchain technology also exposes our data to others which may cause losses. There should be a balance between transparency and privacy. They should use advanced cryptographic techniques for the encryption and decryption so that the transparency does not allow it to reveal the sensitive information to others. The blockchain developers should use privacy protocols. They should also keep in mind the regulatory thoughts in order to ensure the privacy and confidentiality of the blockchain.

I personally do not prefer such privacy leakage transparency where the users can see the transaction details even the amount received and transferred. So these issues should be resolved in the blockchain technology.