To: bitcoin-dev@lists.linuxfoundation.org
References: <20160209131215.GE2329@banane.informatik.uni-ulm.de>
From: Jeremy Papp <pappjm@gmail.com>
Message-ID: <56BA6455.9030803@gmail.com>
Date: Tue, 9 Feb 2016 16:12:37 -0600
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Subject: Re: [bitcoin-dev] Question regarding Confidential Transactions
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My understanding of the paper is that the blinding factor would be 
included in the extra data which is incorporated into the ring 
signatures used in the range proof.

Although, since I think the range proof is optional for single output 
transactions (or at least, one output per transaction doesn't require a 
range proof since there's only one possible value that it can be to make 
the whole thing work, and that value must be in range, I'm not entirely 
sure how you'd transmit it then, though in any case, since using it will 
pretty much require segwit, adding extraneous data isn't much of a 
problem.  In both cases, I imagine the blinding factor would be 
protected from outside examination via some form of shared secret 
generation... Although that would require the sender to know the 
recipient's unhashed public key; I don't know of any shared secret 
schemes that will work on hashed keys.

Jeremy Papp

On 2/9/2016 7:12 AM, Henning Kopp via bitcoin-dev wrote:
> Hi all,
>
> I am trying to fully grasp confidential transactions.
>
> When a sender creates a confidential transaction and picks the blinding
> values correctly, anyone can check that the transaction is valid. It
> remains publically verifiable.
> But how can the receiver of the transaction check which amount was
> sent to him?
> I think he needs to learn the blinding factor to reveal the commit
> somehow off-chain. Am I correct with this assumption?
> If yes, how does this work?
>
> All the best
> Henning
>