Account-Based Privacy: The Unprecedented Combination

What Problem Does This Solve?

The Challenge:

Blockchain needs:
  ✓ Account simplicity
  ✓ Privacy guarantees
  ✓ Smart contract support
  ✓ Instant transactions
  
But historically:
  ❌ Accounts = No privacy
  ❌ Privacy = Output-based only
  ❌ Can't have both... or can we?

DERO's Solution:

• ✅ Account-based model (simple, fast)
• ✅ Homomorphic encryption (privacy)
• ✅ Private smart contracts (unique to DERO)
• ✅ Best of both worlds

The Account Model Advantage

How DERO's Accounts Work

Account Structure:

• Balance is a single value that can be directly updated
• Direct query - no need to sum outputs
• Simple add/subtract operations
• Natural fit for smart contracts
• Lower complexity than output-based systems

Why Account + Privacy Is Hard

The Challenge DERO Solved

The Impossible Problem:

Why This Was Thought Impossible:

For accounts with privacy:
  1. Balance must be encrypted
  2. Operations must work on encrypted values
  3. Network must verify without decrypting
  4. Updates must be instant
  5. Must support smart contracts

The problem:
  ❌ How to add E(old) + E(new)?
  ❌ How to verify E(balance) >= E(amount)?
  ❌ How to update encrypted state?
  ❌ How to do this efficiently?

Most blockchains: CANNOT solve this

Three Key Advantages

1. Instant Transaction Confirmation

DERO's Flow: Submit to Sigma-block (~1 sec) to Account update to Main block (~16 sec) = ~16 seconds total

Advantage: Fast confirmation with account model + privacy ✅

2. Simple Balance Checking

DERO's Flow: Query encrypted balance to Decrypt with private key = Seconds

Advantage: Instant balance checks without full sync ✅

3. Smart Contract Compatibility

DERO Account Model: Natural state storage, direct balance updates, encrypted state works

Advantage: Rich smart contracts WITH privacy ✅

Technical Implementation

How DERO Manages Encrypted Accounts

Account Structure:

• Address: dero1qy...
• Encrypted balances stored in Graviton DB
• Key: Address, Value: E(amount)
• Supports multiple assets: DERO, tokens, etc.

Balance Updates:

From Source Code (blockchain/transaction_execute.go):

// Balance update process
func UpdateBalance(address, amount):
    old_encrypted := LoadBalance(address)  // E(old)
    new_encrypted := HomomorphicAdd(old_encrypted, amount)  // E(old + amount)
    StoreBalance(address, new_encrypted)  // Save E(new)
    
// Network never decrypts old, amount, or new!

Instant Finality: Sigma-Blocks

How DERO Achieves Fast Confirmation

Sigma-Block Architecture:

Timeline:

Why This Works:

• Single account validation (simple)
• Easy parallelization
• Fast confirmation
• Privacy maintained throughout

DERO combines: Speed of accounts + Privacy of encryption ✅

Wallet Synchronization

Lightweight Clients Possible

DERO Account-Based: Query encrypted balance to Decrypt with private key = Seconds (optional history sync)

Advantage: Lightweight wallets with full privacy ✅

Privacy Guarantees

What Account Model Doesn't Compromise

Result: Complete privacy guarantees, plus smart contract privacy!

Why DERO's Approach Works

The Account Model Advantage

DERO proved: You CAN have account simplicity AND privacy!

What Makes DERO Unique

Key Takeaways

What Account-Based Privacy Provides

What It Enables

• ✅ Private Smart Contracts - Unique to DERO
• ✅ Instant Balance Queries - No blockchain scanning
• ✅ Lightweight Wallets - Seconds, not hours
• ✅ Fast Confirmations - ~16 seconds
• ✅ Account Simplicity - Lower complexity
• ✅ Proven in Production - Working system, not theoretical

Related Pages

Privacy Suite:

• Ring Signatures - Transaction anonymity
• Homomorphic Encryption - Balance privacy
• Transaction Privacy - Complete privacy model

Technical:

• DERO Wallets - Stealth address generation
• Wallet RPC API - Integrated addresses

Understanding DERO:

• DERO Tokens - Account-based asset model
• Privacy Features - Full privacy suite overview