With a public Transaction Graph, one can verify the validity and consistency of the system as a representation of a currency. For instance, if a transaction tries to spend a non existent output, the nodes will detect that there is no previous transaction that matches the input.

However, the Transaction Graph also reveals a lot of information about the spending of bitcoins that can fairly be analyzed by tracking companies.

Privacy Coins such as Zcash focus on hiding the transaction graph while preserving its functionality.

The Transaction Graph still exists. But it is globally private, yet locally public.

• The participants of a transaction know its details. Obviously the sender must know the address and quantity sent to the recipient, and the recipient must be able to recognize incoming funds.
• But, the other users should not be able to know (explicitly or by deduction) any of that.