Analysing Privacy

Let’s define that a Privacy Leak has occurred where a party, through the normal use of a CorDapp, obtains information in their Vault that they should not be privy to. For example, the unobscured details of another party’s trade where the party does not have a legal right to see that trade.

We can use an simple DvP (Delivery vs Payment) example to build up our tools around privacy, starting with the State Machine views for a Cash state and a Bond state.


We can map out a possible State Evolution using the State Evolution view, in this case we follow a CashState as it is used to pay for three Bond transactions, the bond transactions are unconnected, we are using the same BondState for convenience, but they are discrete evolutions. (click the image to expand):


(For explanation of State Machine and State Evolution views, see ‘CMN Views’ section)

Fundamentally, privacy is about when a party sees something they shouldn’t. A party can only see something if it exists already, hence the approach to analysing Privacy is backward looking from a point in time on the ledger.

Some points to note:

  • The analysis is from the point of view of a single, observing Party (but one diagram can show several parties’ analysis)
  • The entry point for the analysis is a particular point in a State’s evolution, usually the last covered by the diagram.
  • The analysis uses backwards pointing chains laid over the State Evolution diagram to show the data which a party gains access to.
  • Sometimes this access will be appropriate, however sometime it will be inappropriate, in which case it is marked as a ‘Privacy Leak’
  • It is often not possible to show a closed graph of state evolutions, or to show the full Corda Ledger, so there needs to be a way to show the edges of the graph that is being considered.
  • The objective of the CorDapp design is to avoid Privacy Leaks

Taking the example above, we can start to build up the analysis by considering PartyD


The analysis starts from the last point in a State’s evolution for the part of the State’s evolution which is in scope for the diagram.

  1. Privacy End
The next step for the CashState is to be redeemed, which ends it’s evolution. There are no more States after this one so there are no privacy considerations beyond this State, hence we mark it as a ‘Privacy End’.
  1. Privacy Leak
When Transactions are verified Corda, will resolve all the transactions which previously evolved the input States. We show this resolution by linking back from an input State to the Transaction which produced it. In this case, Transaction 3 input CashState links back to Transaction 2 which produced the CashState as its output. Hence, PartyD will get sent a copy of Transaction 2. This is not okay, Transaction 2 was a trade between PartyB and PartyC, Party D was not involved and should not have visibility. We therefore show this as a ‘Privacy Leak’.
  1. Privacy Chain In
As noted above, we can’t show a closed graph of full State evolutions for all the States shown in the Diagram, it would quickly become too complicated or artificially constrain the complexity of the design. Hence, we need a way to say ‘other stuff happened before this point’. We do this using a ‘Privacy Chain In’ marker. The assumption for a ‘Privacy Chain In’ is that the Party is allowed to have visibility of the prior chain, if not it is a Privacy Leak, see point 4 next.
  1. Privacy Leak
As part of the resolution of Transaction 3 PartyD gets a copy of Transaction 2. Corda will then resolve the preceding transactions to Transaction 2. This includes prior transactions in the BondState evolution. However, PartyD wasn’t part of those transaction so shouldn’t get to see them. This represents another Privacy Leak.
  1. Privacy Leaks
By the same rational as in 2, PartyD also gains visibility of Transaction 1, which it shouldn’t, hence another Privacy Leak.
  1. Privacy Start
When the traceback of the privacy chain reaches the start of the State’s evolution the chain cannot go back any further, hence this is marked as ‘Privacy Start’

The diagram can show the privacy chains of multiple Parties using different colours, adding in all the Parties:

  1. Privacy Chain out
In the same way that we need to shows ‘other stuff that happened before this point’ we also need to show ‘other stuff that happens after this point’. We do this using a ‘Privacy Chain Out’ marker.