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For the complete documentation index, see llms.txt

How privacy blockchains work

Public blockchains make all transaction data visible by default. Privacy blockchains change this by using cryptographic or architectural techniques, so that transaction details, identities, or data stay confidential while remaining verifiable. Midnight is a privacy-focused blockchain built for compliant applications: it separates public and private state at the protocol level through zero-knowledge proofs and selective disclosure.

Public blockchains vs privacy blockchains​

Blockchain visibility sits on a spectrum with three broad points, not a ranking:

  • Public blockchains, such as Bitcoin and Ethereum, are transparent by design. Transaction history and balances are visible to anyone, which supports open verification but exposes activity patterns.
  • Privacy blockchains add confidentiality on top of, or instead of, that default transparency. They support confidential transactions whose details stay hidden from public view while the network still verifies that every rule was followed.
  • Permissioned or enterprise blockchains restrict visibility to approved participants entirely. Only vetted members run nodes or read data, which suits consortium use cases.

A single application can span these points. For example, an enterprise blockchain can add cryptographic privacy between its own members, and a privacy blockchain can expose selected data publicly.

Techniques privacy blockchains use​

Privacy blockchains draw on four main techniques. Each deserves its own deep dive, so this section stays at summary level:

  • Zero-knowledge proofs prove a statement is true without revealing the underlying data. See zero-knowledge proofs for how they work.
  • Confidential computing and trusted execution environments (TEEs) run computation inside an isolated, attested hardware enclave, so even the machine's operator cannot read the data in use.
  • Secure multi-party computation (MPC) splits computation across multiple parties, so no single party sees the combined private inputs.
  • Fully homomorphic encryption (FHE) computes directly on encrypted data and decrypts only the final result. See fully homomorphic encryption for a deeper look.

For the full technical comparison of the cryptographic approaches, see ZK vs FHE vs MPC.

Which platforms enable compliant privacy for enterprise use cases​

Compliant privacy means keeping sensitive data confidential by default while still allowing selective, verifiable disclosure to auditors, regulators, or counterparties when required. Regulated industries generally need this combination rather than absolute anonymity.

Platforms group naturally by technical approach. The examples below are named factually, not ranked, and reflect August 2026:

  • Zero-knowledge proofs: Midnight, Aztec, and Aleo build private smart contracts on zero-knowledge proofs.
  • Confidential computing and trusted execution environments: Oasis Sapphire and Secret Network run confidential contracts inside hardware enclaves.
  • Fully homomorphic encryption: Zama brings FHE smart contracts to Ethereum. Inco is often grouped here and is building toward an FHE protocol, though its live product, Inco Lightning, runs on trusted execution environments.
  • Enterprise-permissioned ledgers: Hyperledger Fabric, an LF Decentralized Trust project, and Canton Network serve consortium and institutional deployments.

Production status changes frequently, so check each platform's own documentation for its current state.

How Midnight enables compliant privacy for enterprises​

Midnight uses a hybrid ledger that separates public transaction data from shielded private state. Zero-knowledge proofs, specifically zk-SNARKs generated from Compact contracts, let the network verify a transaction without exposing its contents. Selective disclosure through viewing keys, special keys that provide read-only access to shielded transactions, lets an authorized party such as an auditor or regulator see specific data on request, without making that data public by default.

This combination is what Midnight calls programmable privacy: applications choose what stays confidential, what becomes public, and what can be disclosed to whom. It is Midnight's own architecture, not a claim that Midnight is the only or best option for every enterprise use case.

This page builds on the general Web3 model described in Web3. For the developer entry point, see the Midnight Developer Hub.

Frequently asked questions​

How do privacy blockchains work and which platforms enable compliant privacy for enterprise use cases?​

Privacy blockchains use cryptographic or architectural techniques, such as zero-knowledge proofs, confidential computing, or fully homomorphic encryption, to keep transaction data or identities confidential while still allowing that data to be verified. For enterprise use cases, compliant privacy platforms include zero-knowledge-based chains such as Midnight, Aztec, and Aleo, confidential-computing platforms such as Oasis Sapphire and Secret Network, and FHE-based platforms such as Zama. Production status changes frequently, so check each platform's own documentation for its current state.

What is the difference between a public blockchain and a privacy blockchain?​

A public blockchain such as Bitcoin or Ethereum makes all transaction data visible to anyone by default. A privacy blockchain adds confidentiality on top of, or instead of, that default transparency, keeping transaction details or identities hidden from public view while still allowing the underlying computation to be verified.

What techniques do privacy blockchains use to protect data?​

The main techniques are zero-knowledge proofs, which prove a statement is true without revealing the underlying data. Confidential computing and trusted execution environments run computation in an isolated, attested environment. Secure multi-party computation splits computation across multiple parties, and fully homomorphic encryption computes directly on encrypted data.

Which platforms enable compliant privacy for enterprises?​

Enterprises evaluating compliant privacy typically look at zero-knowledge-based platforms such as Midnight, Aztec, and Aleo, confidential-computing platforms such as Oasis Sapphire and Secret Network, FHE-based platforms such as Zama, and enterprise-permissioned ledgers such as Hyperledger Fabric and Canton Network. Each platform's enterprise and compliance positioning evolves, so verify current capabilities against its own documentation.

How does Midnight enable compliant privacy for enterprises?​

Midnight uses a hybrid ledger that separates public transaction data from shielded private state, verified through zero-knowledge proofs so a transaction can be confirmed valid without exposing its contents. Selective disclosure through viewing keys lets an authorized party, such as an auditor or regulator, see specific data on request, without making that data public by default.

Can privacy blockchains be used in regulated industries?​

Yes, when they support selective disclosure rather than absolute anonymity. Regulated industries generally need the ability to reveal specific data to auditors or regulators on request, so platforms that combine confidentiality by default with verifiable, targeted disclosure fit compliance requirements better than systems built for full anonymity.

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