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Zero-knowledge Proof Transactions Meaning

Zero-knowledge proof transactions employ zero-knowledge proofs to conceal the participants and amounts involved in a transaction while still allowing the network to verify that the transaction is valid and does not double-spend.

Such transactions enable privacy features like shielded transfers in Zcash or confidential transfers in Ethereum-based rollups.

While privacy is enhanced, regulators and exchanges face challenges in verifying compliance, prompting ongoing debates about balancing privacy and regulatory requirements.

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