Understanding Privacy-Preserving Techniques in Digital Cryptocurrencies

Asset security and transaction efficiency have always been concerned, so that digital cryptocurrencies based on blockchain are increasingly favored. In the transaction, it is necessary to effectively protect private information such as identity and transaction content through technical means. This survey investigates privacy-preserving techniques commonly used in cryptocurrencies, and comparatively analyzes the advantages and disadvantages of different methods. The work mainly covers three technical dimensions. First, this paper investigates and summarizes privacy issues in cryptocurrencies. Second, we investigate mainstream privacy preserving techniques, such as Mixer, Homomorphic Encryption, and State Channel. Specially, we focus on the development of Zero-Knowledge Proof schemes and analyze current defects. Finally, the future direction of blockchain privacy protection technology is prospected.