Vitalik Buterin, the co-founder of Ethereum (ETH), published a blog post in which he proposes the creation of “stealth addresses” to improve blockchain privacy. This system would allow users to generate encrypted public addresses to receive funds anonymously.
The problem of privacy on Ethereum
In a blog post titled “An Incomplete Guide to Confidential Addresses” (or stealth addresses in original version), Vitalik Buterin proposed a new system to improve privacy transactions on the Ethereum (ETH) blockchain.
To begin, the co-founder of the said blockchain introduces his blog post by explaining that confidentiality is “one of the biggest remaining challenges in the Ethereum ecosystem.” In effect, everything on a public blockchain is accessible to everyonewhether financial transactions, ENS domain names or NFTs.
In other words, it is possible for any individual – with some blockchain skills – to have access to a lot of information about you, your life and your on-chain activities. Vitalik Buterin recognizes this: it is an important problem that needs to be dealt with.
It is for this reason that Buterin introduces a new system to increase privacy on the Ethereum network : them stealth addresses, or confidential addresses. But what is it and how does it work? We will explain everything to you.
👉 Find out how to buy Ethereum (ETH) in 2023
The reference platform to buy and trade more than 600 cryptos
10% off your fees with code SVULQ98B 🔥
The operation of stealth addresses
The system of stealth addresses is based on a mechanism allowing anyone to generate a generic public address in order to receive tokens on it, as well as a spending key (i.e. an expense key) to access and retrieve funds.
In concrete terms, this offers the same level of confidentiality as if the individual generated a new address for each transaction. Thereby, this makes tracing everyone’s transaction history very difficult.
Currently, there are already solutions to achieve a high level of confidentiality, such as cryptocurrency mixers like Tornado Cash. However, their use has become difficult since they raise serious confidentiality issues.
As a reminder, on August 8, 2022, Tornado Cash had been sanctioned by the Office of Foreign Assets Control (OFAC)the financial control agency of the United States Treasury.
Thus, Vitalik Buterin wants to implement this functionality natively on Ethereum or within wallets allowing interaction with the network:
“Basic stealth addresses can be implemented fairly quickly today and could provide a significant privacy boost to Ethereum users. They require some work on the wallet side to support them. »
It will be interesting to observe the impact that this news will have on the corners of the blockchains with vocation of anonymity such as Monero (XMR) or Zcash (ZEC) which had greatly benefited from the OFAC sanctions mentioned above. Conversely, it will also be important to monitor regulators’ responses to this new system.
👉 Also read – Tornado Cash: proof that you can’t kill a decentralized application
The all-in-one crypto app
0 fees for your 1st crypto purchase 🔥 (up to $200)
Source: Vitalik Buterin press release
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.