The inspiration for the name comes from the meaning of the original greek word – riddle, puzzle, mystery – and describes Cloakcoin’s Enigma: private, secure, untraceable and decentralized transactions.
Enigma in cooperation with Cloakshield makes it impossible for any outside observers to trace payments done with CLOAKCOIN.
- Alice wishes to send a 100% private currency transaction.To do this she uses the wallet to enable Enigma alongside CloakShield to supply an extra layer of encryption which elects a series of decentralized ENIGMA nodes to add an additional, untraceable layer of privacy.
- Alice's Cloak wallet then automatically sends a request to the network for other Cloak wallets who have been elected to become ENIGMA mixer nodes to ofuscate her transaction. All of this is done privately and securely throughout with no identities or true IP addresses revealed.
- Bob has cloaking mode enabled in his wallet and the wallet generates a secure CloakShield encryption channel for communications with Alice's wallet. bob's wallet sends Alice a secure connection, containing encrypted inputs and outputs to commence the transaction.
- With this confirmed, Alice, with full privacy, creates an encrypted Enigma Transaction containing her true inputs and outputs and Bob's cloaking (ofuscated) inputs and outputs. Bob and Alice both sign the enigma transaction before it is submited to the network for inclusion into a PoS block.
- The transaction rewards Bob with his Enigma cloaking fee and outputs payment to Alice's intended recipient. All participants remain fully anonymous and the entire process takes place without need for interaction from any wallet holders - only using participants who have elected to do so in order to earn additional Enigma rewards.
Analyzing a ENIGMA transaction with the Blockexplorer the inputs are located on the left and outputs on the right, the number depends on how many cloakers were used. If 21 cloakers/mixers are used, there will be 21 matching outputs on the right and also 21 times as many inputs on the left. Only the sender and recipient know who the real sender is. So, in essence, 20 other people pretended to also send coins, but really sent them back to themselves.
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