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description: Private Transaction Processing
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<!--- END of page meta data -->
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# Processing Private Transactions
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Processing private transactions involves the following:
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- **Precompiled Contract**: Smart contract compiled from the source language to EVM bytecode and stored by an
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Ethereum node for later execution.
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- **Privacy Marker Transaction**: Public Ethereum transaction with a payload of the transaction hash of the
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private transaction. The `to` attribute of the Privacy Marker Transaction is the address of the privacy precompile contract.
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The Privacy Marker Transaction is signed with the [Ethereum node private key](../Configuring-Pantheon/Node-Keys.md#node-private-key).
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Private transactions are processed as illustrated and described below.
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1. A private transaction is submitted using [eea_sendRawTransaction](../Reference/JSON-RPC-API-Methods.md#eea_sendrawtransaction).
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The signed transaction includes transaction attributes that are specific to private transactions:
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* `privateFor` specifies the list of recipients
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* `privateFrom` specifies the sender
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* `restriction` specifies the transaction is of type [_restricted_](Privacy-Overview.md#private-transactions)
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1. The JSON-RPC endpoint passes the private transaction to the Private Transaction Handler.
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1. The Private Transaction Handler sends the private transaction to Orion.
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1. Orion distributes the private transaction directly (that is, point-to-point) to the Orion nodes specified
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in the `privateFor` attribute. All Orion nodes specified in by `privateFor` and `privateFrom` store the transaction.
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The stored transaction is associated with the transaction hash and privacy group ID.
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1. Orion returns the transaction hash to the Private Transaction Handler.
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1. The Private Transaction Handler creates a [Privacy Marker Transaction](Privacy-Overview.md#privacy-concepts) for the private
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transaction. The Privacy Marker Transaction is propagated using devP2P in the same way as a public Ethereum transaction.
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1. The Privacy Marker Transaction is mined into a block and distributed to all Ethereum nodes in the network.
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1. The Mainnet Transaction Processor processes the Privacy Marker Transaction in the same way as any other public transaction.
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On nodes that contain the privacy precompile contract specified in the `to` attribute of the Privacy Marker Transaction,
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the Privacy Marker Transaction is passed to the privacy precompile contract.
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!!! note
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Nodes receiving the Privacy Marker Transaction that do not contain the privacy precompile contract
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specified in the Privacy Marker Transaction ignore the Privacy Marker Transaction.
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1. The privacy precompile contract queries Orion for the private transaction and privacy group ID using the
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transaction hash.
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1. The privacy precompile contract passes the private transaction to the Private Transaction Processor.
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The privacy group ID specifies the private world state to use.
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1. The Private Transaction Processor executes the transaction. The Private Transaction Processor can read and write to
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the private world state, and read from the public world state.
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!!! important
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For production systems requiring private transactions, we recommend using a network
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with a consensus mechanism supporting transaction finality. For example, [IBFT 2.0](../Consensus-Protocols/IBFT.md).
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