Confidential Transactions

Confidential Transactions were originally a way to instate privacy and fungibility in Bitcoin transactions by encrypting the transaction details. Confidential Transactions operate via Pedersen Commitments, which enable verification of transaction validity without revealing underlying information about the amounts transacted. They were originally proposed by Blockstream developer Greg Maxwell for the Bitcoin network and have since found use in various privacy-oriented projects, including Monero, Grin, and Beam. There is an argument that privacy is a tradeoff to scalability, as the additional encryption step demands more significant computational transaction requirements.