Using the latest cryptography, Blockstream has created Confidential Transactions designed to improve Bitcoin’s user security by keeping the amounts sent visible only to participants in the transaction, or other specified parties.
Many have tried to improve on Bitcoin transactional security, with Darkcoin/Dash being the most notable example through their own altcoin. With the innovations inside chain technology, Blockstream has created Confidential Transactions (CT). Using the latest cryptography, Confidential Transactions is designed to improve Bitcoin’s user security by keeping the amounts sent visible only to participants in the transaction, or other specified parties.
With Bitcoin, you get a globally verified transaction that removes counterparty risk from transactions, but these transactions are fairly public for this process to take place. Not all financial transactions are meant to be for the public, so the Confidential Transactions program looks to fill that niche in the market.
If larger transactions aren’t done confidentially, thieves, agencies, and scammers can target known high-value addresses for more information. Free speech and fungibility issues, where a bitcoin’s history may make it more or less desirable, can compromise a user’s Bitcoin value, depending on the transaction.
How Confidential Transactions Work