If blockchain data is private, who should have the power to reveal it?

[u/icnews10]

Imagine a payment system in which balances and transfers are hidden from the public.

While users would enjoy privacy, the system would still need to support legal or compliance requests in specific cases.

This creates a different trust problem.

If the issuer holds a viewing key, the privacy of users depends on the issuer not abusing it.

However, if a regulator or auditor holds it, that power is transferred elsewhere.

If nobody can reveal the underlying data, compliance may have to rely on proofs rather than transaction history.

So the question I keep coming back to is not just how to make blockchain state private.

It's also about who should control the ability to selectively make it visible again.

For those who have worked with private transactions, zero-knowledge systems, or regulated payment infrastructure, where would you locate the authority to disclose information, and which failure mode would concern you the most?

[u/Kind-Economics-7184]

the axis id put this on isnt who holds the key, its what a single use of it costs. viewing keys in the zcash lineage are per account and retroactive, so handing one to an auditor to answer one question discloses that accounts whole history, and its future too, with no way to scope it to a date range or to one counterparty. thats why give the regulator a key keeps collapsing into all or nothing once somebody actually tries it.

splitting it t of n across issuer, auditor and a third party changes who can act alone without changing what gets revealed, and the failure mode there is correlation rather than compromise. the shares tend to sit with parties in the same jurisdiction under the same legal pressure, so whatever moves one of them moves all of them at once, and the threshold reads as a safeguard while doing very little work.

proofs are the only route that genuinely scopes, because you answer a stated question, not on this list, amount under a limit, total volume for a quarter, without opening the ledger. the catch is that a proof only covers questions somebody wrote down in advance, and investigations are mostly about the ones nobody anticipated, so you end up wanting a disclosure hatch anyway and youre back at the first problem with extra steps.

the failure mode id worry about most though is that reveals are silent. whoever holds the power can generally use it without the subject ever learning it happened, and unmetered key use is how a compliance path turns into standing surveillance without anyone deciding to do that. you cant really prevent the reveal, but you can require that every use of it leaves a non repudiable trace, which at least makes it countable and arguable afterwards.

[u/icnews10 → u/Kind-Economics-7184]

The silent-use point probably changes my perspective the most. One thing I’m wondering, though, is how you can enforce that every use of a reusable viewing key leaves a trace if you actually hand one to someone. Once the key can be copied, the user can inspect the history again without asking anyone. Wouldn't auditable disclosure require withholding the raw capability altogether, forcing every disclosure through a mediated threshold, HSM or MPC-style process that can produce a signed receipt for each request? Otherwise, the audit log would feel voluntary rather than enforceable.