Ethereum (ETH) May Soon Gain Privacy Features

Ethereum (ETH) is certain to have a notable year in 2023. The prominent altcoin is predicted to undergo a hard fork known as Shanghai. This will facilitate ETH staking and increase the liquidity of the digital currency. Additionally, the implementation of The Scourge phase, which addresses censorship within Ethereum’s network, will also take place this year.

Ethereum co-founder Vitalik Buterin made additional suggestions for the advancement of smart contract platforms. Among his proposals is the implementation of a stealth address system aimed at enhancing the privacy of transactions in cryptocurrency networks. Buterin said privacy is one of the key challenges facing the ETH blockchain, and this proposal is his one solution to address it.

Learn what a stealth address is

Stealth addresses are a method employed by certain cryptocurrencies, such as Monero, to hide the recipient addresses of transactions. This allows users to make anonymous transfers as information is encrypted in a way that eliminates traceability of the source or destination of the associated digital assets.

When conducting a transaction with a stealth address, the sender generates a single public address for that particular transaction. This ensures that even if an individual has access to the public address used in the transaction, they will not be able to identify or link to other transfers associated with that address.

Stealth address implementation ensures privacy through the use of signing and deposit keys, allowing transaction recipients to decrypt and access the transferred digital assets. As a result, using this technology, Ethereum wallets can generate encrypted public addresses and receive funds secretly. To access these funds, simply use a unique code called a spend key.

Another technique Buterin has proposed to enhance privacy on Ethereum is the use of ZK-SNARKs. This technology allows parties to confirm the existence of certain information without disclosing the information itself. ZK-SNARK is employed to protect the privacy and security of transactions while preserving the anonymity of parties involved in transferring digital assets.

The importance of privacy in the cryptocurrency market

Transactions performed on the Ethereum network are public. This means that an individual with a wallet address can utilize EtherScan to view transactions sent and received at that address as well as the current balance of the wallet. This transparency can raise privacy concerns as personal financial information is publicly available.

To protect the security and privacy of cryptocurrency investors, it is essential to be able to maintain the anonymity of their personal transactions and the amounts they wish to keep private. Similar to how you protect the privacy of funds in your bank account, it is important to maintain the confidentiality of your transactions and balances within your cryptocurrency wallet.

By incorporating anonymity features, Ethereum can give users the ability to keep their transactions and personal information confidential. In addition, privacy can also prevent discrimination based on transactions, such as tracking a person to send money with a particular asset or a particular person.

Additionally, implementing privacy measures can also protect Ethereum users from fraud and cyberattacks, as it will be difficult for criminals to identify and access sensitive transactions and information.