Definition ∞ Encrypted State refers to data or system information that is stored or processed in an obfuscated format, rendering it unintelligible without the appropriate decryption key. This state is maintained to protect sensitive information from unauthorized access, ensuring confidentiality and data security. The transition to and from an encrypted state requires robust cryptographic operations. It is a crucial aspect of privacy-preserving technologies and secure data handling.
Context ∞ Within blockchain and digital asset discussions, encrypted state is particularly relevant for privacy solutions and confidential computing initiatives. Projects are developing methods to allow computations on encrypted data without decryption, such as fully homomorphic encryption, to enhance user privacy on public ledgers. The primary challenge involves balancing the need for data confidentiality with the transparency and verifiability inherent in blockchain systems.
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