In its commitment to user privacy, Coinomi is working to add support for shielded transactions in a future update. Here's how they work.

What Are Shielded Transactions?

Shielded transactions is a technology that protects the identity of senders, recipients, and transaction amounts by default. PIVX (Private Instant Verified Transaction) was one of the first Proof-of-Stake blockchains to integrate advanced privacy features, with shielded transactions at its heart.

In most blockchains, transactions are public and traceable. Anyone can see who sent funds, to whom, and how much. PIVX’s shielded transactions, for example, based on zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge), change this model.

Instead of broadcasting all transaction details, zk-SNARKs allow a user to prove a transaction is valid without revealing its contents. This ensures that the blockchain can verify funds are legitimate while keeping sensitive information hidden.

How They Work

  1. Funds enter the shielded pool.
    Users can move their PIV into a special shielded pool. Once there, the coins lose their transaction history and become unlinkable to previous owners.

  2. Private transfers.
    When sending funds from the shielded pool, the transaction is validated cryptographically with zk-SNARK proofs. The network confirms the sender has sufficient funds, but it cannot see the sender’s address, the recipient’s address, or the amount.

  3. Optional transparency.
    PIVX allows selective disclosure. A user can share “view keys” with auditors or regulators to reveal details of their shielded transactions if necessary.

  4. Funds exit the pool.
    Users can also convert shielded coins back to transparent PIV, if they need to interact with exchanges or systems that require visible transaction history.

Benefits of Shielded Transactions

  • Full Privacy. Identities and amounts are hidden, breaking the traceability chain common to most blockchains.

  • Fungibility. Since coins have no visible history once shielded, every unit of PIV is equal. This prevents “tainted” coins and protects against blacklisting.

  • Regulatory Flexibility. View keys allow optional compliance without sacrificing privacy for all users.

  • Proof-of-Stake Compatibility. PIVX pioneered integrating shielded transactions with staking, enabling private and sustainable consensus.

  • User Choice. Transparency remains available for users who want it, but shielded transfers are the core privacy option.

Why It Matters

As blockchain adoption grows, transaction transparency has become a double-edged sword. Businesses and individuals alike face risks from surveillance, data scraping, and financial profiling. PIVX’s shielded transactions address these risks head-on, delivering financial privacy without compromising security or scalability.

Conclusion

Shielded transactions on PIVX represent a milestone in privacy-preserving blockchain technology. By combining zk-SNARKs with Proof-of-Stake and optional transparency, PIVX empowers users with true financial freedom. In a world where privacy is increasingly scarce, PIVX ensures it remains a fundamental right.