Analysis of Data Confidentiality Strategies in Blockchain Systems

Abstract

Blockchain is a distributed ledger technology designed to ensure transparent and tamper-proof transaction recording without centralized control. Despite its benefits, this transparency can compromise the confidentiality of the data. This paper investigates eight privacy-preserving methods such as encryption, steganography, off-chain hashing, and zero-knowledge proofs. Each technique is explored through working implementations and real-world constraints, including gas cost and legal compliance. A hybrid architecture is proposed that blends on-chain verification with IPFS-based off-chain storage, enabling developers to build scalable and privacy-conscious decentralized applications.