PrivateSend transactions are optional and are performed by the masternode network. The method used is called coin-mixing. In order to be able to carry out this coin-mixing within a transaction, the total amount to be sent is divided into several partial amounts of identical sizes, each of which is assigned to its own address. The sender’s wallet software now selects a master mode and makes a transaction request for the total amount, submitting the subtotals. The masternode then joins with 2 other master nodes, since 3 Masternodes are required to complete a PrivateSend transaction, and mixes the subtotals of other PrivateSend transactions together. Before the transaction of the total amount, which is made up of “new” subtotals of other PrivateSend transactions, is transmitted to the recipient, the sender’s wallet software checks whether the total amount is still correct. If so, the transaction is performed. The more of these coin mixing rounds the broadcaster requires, the harder it will be to track the movement of the coins on the blockchain.
In theory, it would be possible to decrypt such a transaction, but in practice this has never been achieved despite prize money.