ERC20 token transfer is not showing in receiver's balance

Question

I have created 3 node (A, B, C) network in that I have deployed simple ERC20 token smart contract on node A.

function balanceOf(address tokenOwner) public view returns (uint256) {
    return balances[tokenOwner];
}

function transfer(address receiver, uint256 numTokens) public returns (bool) {
    require(numTokens <= balances[msg.sender]);
    balances[msg.sender] = balances[msg.sender].sub(numTokens);
    balances[receiver] = balances[receiver].add(numTokens);
    emit Transfer(msg.sender, receiver, numTokens);
    return true;
}

I am communicating with smart contract using web3.

const balance = async (httpProvider) => {
    const web3 = new Web3(httpProvider);
    const id = await web3.eth.net.getId();
    const deployedNetwork = token.networks[id];
    const accounts = await web3.eth.getAccounts();
    const account = accounts[0];
    const contract = new web3.eth.Contract(token.abi, deployedNetwork.address);
    return contract.methods.balanceOf(
        account
    ).call({ from: account });
}

const transfer = async ({sender, receiver, amount}) => {
    const httpProvider = getHttpProvider(sender);
    const web3 = new Web3(httpProvider);
    const id = await web3.eth.net.getId();
    const deployedNetwork = token.networks[id];
    const accounts = await web3.eth.getAccounts();
    const senderAccount = accounts[0];
    const contract = new web3.eth.Contract(token.abi, deployedNetwork.address);
    return contract.methods.transfer(
        getAddress(receiver),
        amount
    ).send({ from: senderAccount, gas: 30000000, privateFor: [getPublicKey(receiver)] });
}

when I am transferring token from A to B or A to C everything is fine balanceOf(A), balanceOf(B) and balanceOf(C) are returning correct values.

but when I am transferring from B to c balanceOf(B) is showing the correct value but not balanceOf(C) as if transfer didn't happen for C. but from response I can see transfer was successful so why balance of C was not updated correctly?

"events": {
        "Transfer": {
            "address": "0x4D3bfd7821E237fFE84209d8E638f9f309865b87",
            "blockNumber": 32826,
            "transactionHash": "0x9e65454b1fd3e983f25010c324dc3a9633e696e77ac8446189c0dc941d42c7a9",
            "transactionIndex": 0,
            "blockHash": "0x0937d55d1effd81a150df3094ca2d19230c26a74e6dc7b6c83cec5828f51b1a2",
            "logIndex": 0,
            "removed": false,
            "id": "log_09bea0b7",
            "returnValues": {
                "0": "0xcA843569e3427144cEad5e4d5999a3D0cCF92B8e",
                "1": "0x9186eb3d20Cbd1F5f992a950d808C4495153ABd5",
                "2": "1",
                "from": "0xcA843569e3427144cEad5e4d5999a3D0cCF92B8e",
                "to": "0x9186eb3d20Cbd1F5f992a950d808C4495153ABd5",
                "value": "1"
            },
            "event": "Transfer",
            "signature": "0xddf252ad1be2c89b69c2b068fc378daa952ba7f163c4a11628f55a4df523b3ef",
            "raw": {
                "data": "0x0000000000000000000000000000000000000000000000000000000000000001",
                "topics": [
                    "0xddf252ad1be2c89b69c2b068fc378daa952ba7f163c4a11628f55a4df523b3ef",
                    "0x000000000000000000000000ca843569e3427144cead5e4d5999a3d0ccf92b8e",
                    "0x0000000000000000000000009186eb3d20cbd1f5f992a950d808c4495153abd5"
                ]
            }
        }
    }

Answer 1

I'm afraid plain vanilla ERC-20 with privateFor will not work as designed -- as you have so far experienced. Reason for that is that all privateFor txns are private for the participating nodes defined in the privateFor, so transferring a balance between accounts A->B will only ever be accessible and visible to the nodes that privateFor is defined for.

While there are many ways to create a private balance and ERC-20 like functionality with privacy, I would suggest you evaluate our implementation of anonymous zether here: https://github.com/ConsenSys/anonymous-zether. Another way is to do it with a node that is always part of the ERC-20 transfers, and this node can act as an orchestrator. A sample of that can be seen here: https://github.com/ConsenSys/quorum-examples/pull/66