Privacy Preserving Protocol

Definition ∞ A Privacy Preserving Protocol is a set of rules and procedures within a blockchain or decentralized system designed to protect the confidentiality of user transactions, identities, or data. These protocols employ advanced cryptographic techniques, such as zero-knowledge proofs or confidential transactions, to enable verifiable interactions without revealing sensitive information. They address the inherent transparency of public ledgers. They enhance data confidentiality.
Context ∞ The development and adoption of privacy-preserving protocols are a significant area of focus in the ongoing quest for enhanced user privacy within the blockchain ecosystem. A key debate involves balancing privacy features with regulatory compliance requirements, particularly concerning anti-money laundering regulations. These protocols are critical for fostering broader institutional and individual adoption of digital assets.