GB Blockstream, a prominent player who is a major contributor to the development of Bitcoin, has announced Confidential Assets (CA). CA builds on Confidential Transactions (CT) and makes it possible to add an asset tag to the output of a transaction, so that a good can be represented.

CT ensures that the amount of bitcoins sent in a transaction remains shielded from everyone but those involved, while it remains cryptographically verifiable that the transaction is correct. This gives more privacy and also benefits fungibility.

Building on this technique with CA makes it possible to transfer ownership of an asset in a transaction, without publicly disclosing information about the transaction. It can also be verified cryptographically that a good is not simply created, destroyed or modified.

CT and CA are not yet available on Bitcoin itself, as the protocol is not yet ready for this. Blockstream will probably start using CA in the sidechain they use: Liquid . Confidential transactions technology is a promising and necessary development for Bitcoin in terms of privacy and fungibility.

Read more about Confidential Assets here.