How miner collects their transaction fee in Confidential Transaction

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Q1. That depends on the blockchain’s consensus rules. It has nothing to do with Confidential Transactions. In Blockstream Liquid, the miners (really, federation signers) rotate, and one by one propose a block which 2/3s of the other signers need to agree on. There are other systems that use some variant of Confidential Transactions that work completely differently.

Q2. Whatever the miner wants.

Q3. Alice doesn’t send the fee to any address. Her transaction simply lists inputs, outputs, and fee (the fee is not an output, it has no address; it’s just a field that says “the fee is 0.001”, in cleartext – no Pedersen commitment). In your example, the transaction would list {inputs: [utxo with output C1,witness], outputs:[(C2,address1),(C3,address2)], fee:0.001}, and the validity rule would be C1 = C2 + C3 + 0.001*H).

Q4. There is no blinding for the fee, so there is nothing the miner needs to know.



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