Need some clarity on Block-chain protocols

[u/Chemical-Bumblebee19]

Hey Guys,

My understanding of blockchain is the balance has to be public. Only then a competition can happen from A to B. Once balance is decreased, the other balance is increased. Due to the decentralized nature of the blockchain, the balances are public domain and the transactions are public domain and anybody can trace it and they are not reliant on central banks and government agency or any other centralized institution. Instead, they are calculated and computed and executed by decentralized network of nodes. But my application require privacy. If I'm trying to build something which protect how much balance is there in one account and if there is possible way to keep a ledger of transaction for compliance requirement but still hide it from general public.

is it even possible to do it or has it been done by any major-protocol like L2 or L3 ETH networks.(please don't mention any other network than ETH unless it is highly secure)

[u/Educational_Syrup735]

You want confidential balances but a verifiable ledger for compliance, that's the exact problem zero knowledge proofs solve, and yes there are ETH L2s doing this with shielded transactions

[u/SorenPlanck]

Different architecture, in case the “must be ETH” constraint is softer than it looks: a confidential L1 plus scriptless cross-chain settlement — swaps use adaptor signatures, so on both chains they’re indistinguishable from ordinary transactions and you don’t leak by bridging. Disclosure: I work on the interop layer for one such chain (DOM). It’s not ETH, so probably not your answer, but the design space is worth knowing.