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Daniel Larimer has said, "account balances can be made confidential but not source/sender." (Source: EOS Telegram group)

How do confidential account balances work? How, if at all, does that technique extend to contracts that store data other than balances?

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  • I assume he was referring to confidential transactions as proposed by Gregory Maxwell. the basic idea is that you only validate that inputs == outputs without actually being let known about the exact amounts exchanged
    – confused00
    Commented Jul 23, 2018 at 19:47

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In the current implementation of EOSIO software, the account balances can not be made confidential. Each user's balance is stored in a table alongside their username. In addition to this, any transaction performed by a user would show the from and to fields, so that you could follow who sent tokens to another account.

Workaround

A semi-workaround to this would be to deposit your funds from account A to an exchange, and then withdraw the funds to account B from the exchange. This has two potential flaws:

  1. People could trace the size of your transfers (notice that Alice transferred 1532.0132 EOS to an exchange, and Bob withdrew 1532.0132 EOS from the exchange).
  2. The exchanges are centralized entities that can have their data leaked, breached, or subpoenaed.
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