The other day when I was watching Moonlight, I kept thinking about one question: if @Dusk wants to do privacy finance, how exactly does Phoenix—the one truly responsible for privacy—work?
The most intuitive difference isn’t really “whether or not you can see the address,” but rather that the way the assets are accounted for changes.
In Moonlight, an account’s DUSK balance is recorded directly in the account balance—others can see that account’s balance and its transfer history. Phoenix, on the other hand, doesn’t account for assets this way. The assets become encrypted notes. When a user spends one of those notes, they need to use a zero-knowledge proof to convince the network that: this asset does belong to them, it hasn’t been spent twice, and the transaction amount satisfies the rules.
The key is right here.
The verifier needs to confirm “this transaction is fine,” but it doesn’t need to know “how much money you actually have.”
This is actually quite different from the way traditional blockchains think. Typical on-chain transactions make data public and then let all nodes check together. Phoenix is more like hiding the specific information and only giving the network the verification result.
The official Dusk documentation is also very clear on this: Phoenix’s shielded transactions do not disclose the transfer amount to ordinary observers, nor do they reveal the relationship between the sender and specific notes. However, recipients and users who hold the viewing key can still obtain the corresponding information.
I think this is where Phoenix is truly worth studying.
What it aims for isn’t “nobody can know anything,” but rather separating two things: proving that a transaction is valid, and exposing transaction details.
For ordinary transfers, this may just be an improvement in the privacy experience; but if it’s later used for institutional assets, securities, or other financial scenarios, the significance of this design will be completely different.
Because what finance truly needs has never been absolute transparency or absolute anonymity.
Instead, it’s: keep privacy where it shouldn’t be exposed, and be able to prove things when proof is required.
That’s also what I currently find most interesting about Phoenix.
#dusk $DUSK
The most intuitive difference isn’t really “whether or not you can see the address,” but rather that the way the assets are accounted for changes.
In Moonlight, an account’s DUSK balance is recorded directly in the account balance—others can see that account’s balance and its transfer history. Phoenix, on the other hand, doesn’t account for assets this way. The assets become encrypted notes. When a user spends one of those notes, they need to use a zero-knowledge proof to convince the network that: this asset does belong to them, it hasn’t been spent twice, and the transaction amount satisfies the rules.
The key is right here.
The verifier needs to confirm “this transaction is fine,” but it doesn’t need to know “how much money you actually have.”
This is actually quite different from the way traditional blockchains think. Typical on-chain transactions make data public and then let all nodes check together. Phoenix is more like hiding the specific information and only giving the network the verification result.
The official Dusk documentation is also very clear on this: Phoenix’s shielded transactions do not disclose the transfer amount to ordinary observers, nor do they reveal the relationship between the sender and specific notes. However, recipients and users who hold the viewing key can still obtain the corresponding information.
I think this is where Phoenix is truly worth studying.
What it aims for isn’t “nobody can know anything,” but rather separating two things: proving that a transaction is valid, and exposing transaction details.
For ordinary transfers, this may just be an improvement in the privacy experience; but if it’s later used for institutional assets, securities, or other financial scenarios, the significance of this design will be completely different.
Because what finance truly needs has never been absolute transparency or absolute anonymity.
Instead, it’s: keep privacy where it shouldn’t be exposed, and be able to prove things when proof is required.
That’s also what I currently find most interesting about Phoenix.
#dusk $DUSK