There are several different methods that could be implemented to make transactions fully-private using the Ghostwallet: By ZombieDAO privacy wallet. These methods may vary depending on the specific design and architecture of the wallet, but some possible approaches are outlined below.
- Midnight: Possiblity of storing encrypted keys for spending/staking Cardano assets inside a private data structure on the Midnight ledger.
- Zero-knowledge proofs: One potential method for achieving full transaction privacy is to use zero-knowledge proofs. In this approach, the wallet would use cryptographic techniques to prove that a transaction is valid without revealing any information about the transaction itself. This could be implemented using technologies such as zk-SNARKs or zk-STARKs, which allow for efficient and scalable verification of the proof without revealing any sensitive information.
- Bulletproofs: A type of zero-knowledge proof that has been specifically designed to improve the efficiency and scalability of zero-knowledge proof schemes. Bulletproofs use shorter, more efficient proof constructions than traditional zero-knowledge proofs, which allows for faster and more efficient verification of the proof without sacrificing security. This makes bulletproofs well-suited for use in privacy-focused blockchains, where scalability and efficiency are important considerations.
- Private transaction protocols: Another approach to fully-private transactions is to use private transaction protocols. These protocols, such as the Mimblewimble protocol or the Confidential Transactions (CT) protocol, allow for the creation of transactions that hide the amount and participants involved in the transaction. This is achieved through the use of cryptographic commitments and zero-knowledge proofs, which ensure that the transaction is valid without revealing any sensitive information.
- Stealth addresses: A third method for achieving full transaction privacy is to use stealth addresses. In this approach, the wallet would generate a unique, one-time address for each transaction. This address would be used to receive the funds from the transaction, but would not be linked to the user's real address or identity. This would prevent third parties from tracking the user's transactions or linking them to the user's real identity.
- Onion routing: Another potential approach to full transaction privacy is to use onion routing. In this method, the wallet would use a network of nodes to encrypt and route transactions in a way that hides their origin and destination. This would make it difficult for third parties to track the transactions and link them to the user's identity.
- Ring signatures: A cryptographic technique that allows a group of users to sign a message in such a way that it is impossible to determine which user's signature is on the message. This allows for greater privacy and anonymity in transactions, as it hides the sender's identity.
- Privacy mixing: A method that works by aggregating multiple transactions into a single transaction, making it difficult for third parties to track and link the individual transactions to their respective sender and recipient.
- ENCOINS: A privacy-focused cryptocurrency that will be built on the Cardano blockchain that will allow you to mint NFTs using a set amount of ADA locked into it. That amount is encrypted within the metadata of the NFT and can only be unlocked using a key or password that is passed out-of-band.