Schematics
OFF-CHAIN
Bob -> Alice
(zStone) Transactions -> (zStone) Received
SWAP
Alice -> Ted (Node) -> Alice
(zStone) Swap 1:1 -> Receive/Send -> (Stone) Received
Alice receives a private transaction from Bob via zStone, Alice now has 100 zStone, Alice now wants standard Stone, she swaps the 100 zStone for Stone 1:1 via a Stone node. The end result is Alice successfully has completed a private transaction with Bob, and swapped back into the base currency, all within the wallet, this method allows the DAG protocol to still function with its representative method.
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This may have been discussed, but this would be implemented in a wallet by everyone having two addresses, one for zStone and one for Stone. Bob can pay Alice 100 zStone and Alice can choose to keep them as zStones for her private transactions. You mention that Stone would be on an exchange but zStone would not, would there be a way to make the transaction go through a node to appear as a swap or just allow exchanges to send zStone?
e.g. Bob buys 100 Stone from XYZ exchange, Bob withdraws from XYZ instructing to to pass through a node, so XYZ exchange sends Stone to a node that relays it to Bob as zStone. Bob swaps to Stone, so the ledger would read "Bob balance = Bob balance + 100 Stone"
Alternatively, I think it would be cleaner to allow exchanges to send zStone. Bob buys 100 Stone form XYZ, XYZ sends zStone, Bob swaps, "Bob balance = Bob balance + 100 Stone"
Moreover, what if one party is okay with with the transaction being public but the other is not? e.g. In Canada, there are professions in which it is legal to be the provider but illegal to be the serviced. So, Alice received 100 Stone as income and needs to report it to the CRA. Bob doesn't want a paper-trail. Bob sends zStones which appear as Stones in Alice's account from an anonymous source.
Am I missing something? I'm trying to think in terms of fiat cash. If you deposit $100 the bank wont ask where it came from, but if you deposit a check for $100 there is a record of where that money came from.
Thoughts?