Ethereum co-founder Vitalik Buterin has shared a possible solution to what he describes as the \u201clargest remaining challenge\u201d for Ethereum \u2014 privacy.\u00a0<\/p>\n
In a blog post<\/a> on Jan. 20, Buterin acknowledged the need to come up with a privacy solution because by default, all information that goes onto a \u201cpublic blockchain\u201d is public too.<\/p>\n He then arrived at the concept of \u201cstealth addresses\u201d \u2014 which he said can potentially anonymize peer-to-peer transactions, nonfungible token (NFT) transfers, and Ethereum Name Service (ENS) registrations, protecting users.\u00a0<\/p>\n An incomplete guide to stealth addresses:https:\/\/t.co\/21Q18BrD30<\/a><\/p>\n \u2014 vitalik.eth (@VitalikButerin) January 20, 2023<\/a><\/p><\/blockquote>\n In the blog post, Buterin explained how on-chain transactions can be carried out between two parties with anonymity.\u00a0<\/p>\n Firstly, a user looking to receive assets will generate and keep a \u201cspending key\u201d that is then used to generate a stealth meta-address. <\/p>\n This address \u2014 which can be registered on ENS<\/a> \u2014 is then passed onto the sender who can perform a cryptographic computation on the meta-address to generate a stealth address, which belongs to the receiver.\u00a0<\/p>\n The sender can then transfer assets to the receiver\u2019s stealth address in addition to publishing a temporary key to confirm that the stealth address belongs to the receiver.\u00a0<\/p>\n The effect of this is that a new stealth address is generated for each new transaction.<\/p>\n Buterin noted that a \u201cDiffie-Hellman key exchange\u201d in addition to a \u201ckey blinding mechanism\u201d would need to be implemented to ensure that the link between the stealth address and the user\u2019s meta-address can’ be seen publicly.<\/p>\n The Ethereum co-founder added that ZK-SNARKs \u2014 a cryptographic-proof technology<\/a> with built-in privacy features \u2014 could transfer funds to pay transaction fees. <\/p>\n However Buterin emphasized that this may lead to problems of its own \u2014 at least for the short term \u2014 stating \u201cthis costs a lot of gas, an extra hundreds of thousands of gas just for a single transfer.\u201d<\/p>\n Related: <\/em><\/strong>Crypto privacy is in greater jeopardy than ever before \u2014 here’s why<\/em><\/strong><\/a><\/p>\n Stealth addresses have long been touted as a solution to address on-chain privacy issues, which have been worked on since as early as 2014.<\/a> However very few solutions have been brought to market thus far.<\/p>\n It also isn\u2019t the first time Buterin has discussed the concept of stealth addresses in Ethereum. <\/p>\n In August, he dubbed stealth addresses as a \u201clow-tech approach\u201d<\/a>\u00a0for anonymously transferring ownership of ERC-721 tokens \u2014 otherwise known as NFTs.<\/p>\n The Ethereum co-founder explained that the stealth address concept proposed offers privacy differently to that of the now U.S. Office of Foreign Asset Control (OFAC)-sanctioned Tornado Cash:<\/a><\/p>\n \u201dTornado Cash can hide transfers of mainstream fungible assets such as ETH or major ERC20s […] but it\u2019s very weak at adding privacy to transfers of obscure ERC20s, and it cannot add privacy to NFT transfers at all.\u201d<\/p><\/blockquote>\n Buterin offered some advice to Web3 projects that are developing a solution:<\/p>\n \u201cBasic stealth addresses can be implemented fairly quickly today, and could be a significant boost to practical user privacy on Ethereum.\u201d<\/p><\/blockquote>\n \u201cThey do require some work on the wallet side to support them. That said, it is my view that wallets should start moving toward a more natively multi-address model […] for other privacy-related reasons as well,” he added.<\/p>\n Buterin suggested that stealth addresses may introduce \u201clonger-term usability concerns,\u201d such as social recovery issues.<\/a> However, he is confident the problems can be properly addressed in time:<\/p>\n \u201cIn the longer term, these problems can be solved, but the stealth address ecosystem of the long term is looking like one that would really heavily depend on zero-knowledge proofs,\u201d he explained.<\/p>\n<\/div>\n\n
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