How @Dusk enables confidential transactions without hiding data from regulators.

Dusk uses a clever cryptographic approach that allows transactions to remain private on the public blockchain while still being auditable by authorized regulators. At its core, the network employs zero-knowledge proofs, specifically a variant called Phoenix, which lets users prove their transactions are valid without revealing amounts, sender, or receiver information to the general public.

The key innovation is selective disclosure. Transaction data is encrypted in a way that only specific parties with the right cryptographic keys can decrypt it. Regular network participants see only cryptographic proofs that everything is legitimate, while regulators or compliance officers can be granted special viewing keys that unlock transaction details when needed for auditing or investigation purposes.

This dual-layer system works through a combination of homomorphic commitments and range proofs that validate transactions mathematically without exposing the underlying data. When a regulator needs to examine a transaction, they use their viewing key to decrypt the relevant information, but this access doesn't compromise the privacy of other uninvolved parties. The blockchain essentially maintains two versions of truth: an encrypted version for public verification and a detectable version for authorized oversight, ensuring both privacy for users and compliance for institutions operating within regulatory frameworks. $DUSK #dusk