Hi, I'm Jesse—I cover XRP, QNT, Utility Tokens & more. Over 17,000 hrs of experience in Web3, blockchain, & tokenization. I'm not a financial advisor. #NFA
This is SO cool !!
I just used up for voting amendment XLS-96 Confidential Transfer / privacy on the XRP Ledger dev net enabled by homomorphism and ZK proofs.
What's going on here and how do nodes know payments are correct while not able to see the amounts ?
1) I issued a confidential MPT on the XRP Ledger dev net. I shielded my balance.
Privacy for the amounts of my XRPL issued asset balance and transfers (the addresses stay public).
No one can see the amounts, it's all shielded, except the issuer and the auditor who can always decrypt them (or you, like in the video on my esp32).
2) The XRP Ledger uses 2 boxes 📦 for this all under the hood, an Inbox-box and a Spending-box. I don't go into detail why thats needed but it's important we have it.
3) How do Validators and nodes know the transfers are correct if they can't see the amounts?
Now the true magic is enabled by homomorphism. It allows to do operations arithmetic on encrypted data as if it were plaintext, without the need to decrypt it.
Like adding and subtracting amounts to your balance.
ZK proofs fill the gap that nodes need. We need a comparison of the balance that after you have done your payment you have >= 0 balance. If you would have negative balance it means you trying to spend more than you have something we need to prevent.
For this a ZK proof is used to quickly allow people to check, ahh all good, no idea how much Vet owns but whatever he is spending here it's definitely within his balance and it's not below 0.
Those 2 techniques soon on a public decentralized blockchain XRP Ledger. Should give you goose bumps what this means for possible use cases.
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