Thread by @liberlion17

1/10 An analogy to understand #privacy in blockchain.

Your safe box (the wallet) contains inside the checks that you can issue to operate in the network. Only you can sign the checks (the private address of your wallet contained in the seed).

2/10 Then, the tx of those checks already operated are public, and show the funds transferred, destination and origin addresses, day and time, (this is traceability), but as they are bearer checks it is not known who transacted.

3/10 It is possible to know from which safes they were issued and which safe endorsed them, but without knowing their holders, on-chain. But if you post on Twitter that you are the owner of that safe (off-chain information) everyone can track the tx (on-chain information).

4/10 This traceability is in #Bitcoin, or in #Cardano, as in other networks.

5/10 What Cardano #Midnight will do with the cryptography of the Zero-Knowledge protocol, is to obfuscate the tx in the same network (on-chain information) and if you have published your safe on Twitter (off-chain information) it will be very difficult almost impossible to…

6/10 …trace all your tx.

Monero works like that, but with another obfuscation protocol. ZCash on the other hand operates with the Zero Knowledge protocol. Both Blockchains are known as 'privacy coins'.

7/10 You should not confuse the cryptography contained in the Blockchain protocol with the privacy (not traceability) of the tx on the blockchain.

8/10 Cardano and BTC have the SHA256 protocol, which serves to asymmetrically encrypt the addresses so that only the holder of the private key can send funds .

9/10 Asymmetric cryptography means that you cannot decrypt the private key from the public key, but you can the other way around.

Orbis protocol, which for now is discontinued by their team, was designed like this, you can see my article, to understand Zero-Knowledge protocol.

10/10 My article: adapulse.io/orbis-a-cardan…