Vitalik Buterin Lends on Stealth Address to Bring Privacy to Blockchain Transactions

Vitalik Buterin Lends on Stealth Address to Bring Privacy to Blockchain Transactions

Privacy tools have always been touted as the key to financial freedom in the crypto industry. In the Ethereum ecosystem, discussions surrounding the topic have mostly revolved around privacy-preserving transfers of ETH tokens and traditional ERC20 tokens.

In an effort to improve the state of privacy on the network, its co-founder Vitalik Buterin came up with a system of stealth addresses.

“Last remaining challenge for Ethereum”

The concept of stealth addresses using elliptic curve cryptography was first introduced in the context of Bitcoin by lead BTC developer Peter Todd in 2014 to hide transaction details. In the last blog post, Buterin acknowledged that privacy is “one of the biggest remaining challenges in the Ethereum ecosystem” while stressing the need for a privacy solution because “everything that goes on a public blockchain is public.”

Stealth addresses, on the other hand, can help in this regard. Buterin noted that having such a mechanism in place will allow the Ethereum wallet to generate stealth addresses to receive funds privately and access them using a special code called a “spending key.”

Stealth addresses offered may be generated by either party, but may only be controlled by one of them. The user receiving the assets generates the stealth address and keeps a spend key secret, which will then be used to generate a stealth meta address that can be passed to the sender.

This allows the sender to perform a calculation on this meta-address to initiate a stealth address belonging to the receiver. The sender can then send all the assets they wish to send to this address, while the receiver will have full control. Along with the transfer, the sender posts additional cryptographic data to the chain confirming that the stealth address belongs to the recipient.

Buterin asserted that stealth addresses offer the same privacy properties as a user generating a new address for each transaction.

Stealth Address Vs. Tornado Cash

Several methods have been employed in recent years to obfuscate transactional details. This includes Tornado Cash which was recently sanctioned by OFAC. Buterin, for his part, said that the proposed stealth address concept offers a different kind of privacy than the popular Ethereum-based coin mixer. He explained,

“Tornado Cash can obfuscate transfers of traditional fungible assets such as ETH or major ERC20s (although it’s more easily useful for privately sending to yourself), but it’s very weak at adding cash. privacy to obscure ERC20 transfers, and it cannot add privacy to NFT transfers at all.”

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