Pedersen Commitments: What They Are and Why They Matter in Privacy Coins and Blockchain

When you send crypto, you usually reveal how much you’re sending. But what if you could prove a transaction is valid Pedersen commitments, a cryptographic method that hides amounts while allowing verification. This technique lets you prove you didn’t cheat — without showing the numbers. It’s not magic. It’s math. And it’s the quiet engine behind many privacy-focused blockchains.

Pedersen commitments rely on elliptic curve cryptography, a type of math used in Bitcoin and other blockchains to secure digital signatures. They work by blending two values: the amount you want to hide, and a random number called a blinding factor. The result? A scrambled output that looks like random noise. But here’s the trick: anyone can check that the scrambled output matches a known rule — meaning the amount is valid, even if they can’t see it. This is why projects like Monero, a privacy coin that hides sender, receiver, and amount by default and Zcash, a blockchain that lets users choose between public and shielded transactions use it. Without Pedersen commitments, these coins couldn’t hide transaction amounts and still satisfy network rules.

It’s not just about hiding money. Pedersen commitments help solve bigger problems like double-spending without revealing balances. They’re used in zero-knowledge proofs, a system that proves something is true without revealing the underlying data, which is why they show up in advanced DeFi protocols and scaling solutions. Even though most users never see them, they’re quietly making blockchains more flexible and private.

But here’s the catch: Pedersen commitments aren’t foolproof. They require trusted setup in some cases, and if the math is implemented wrong, the whole system can break. That’s why audits matter — and why you’ll find them in posts about secure DEXs, privacy coin risks, and blockchain architecture. You won’t see them in a simple wallet app, but if you’re digging into how exchanges like SMART VALOR handle compliance, or why privacy coins are getting delisted, this is the hidden layer behind the headlines.

Below, you’ll find real-world examples of how Pedersen commitments shape crypto — from the coins that use them to the exchanges that avoid them, and the hacks that expose what happens when privacy fails. This isn’t theory. It’s the code running under the surface of your favorite crypto projects.