How to technically enhance the privacy of Ethereum?

The privacy of Ethereum is very important. Mixers, computational data layers, zero-knowledge proofs, etc. are just some of the techniques used to enhance the privacy of the Ethereum blockchain.


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The privacy of a public blockchain network is a contradiction because, according to the nature of the technical design, data must be shared and widely distributed across the network to be considered valid. More importantly, for the high-profile public blockchain network like Ethereum, the dissemination of these data is not only based on network users, but on multiple blockchain analysis websites and data collection services.

Itamar Lesuisse, CEO and co-founder of the encryption wallet tool Argent, described the privacy issues in the Ethereum blockchain as a common problem on the platform, even the “simplest use case”. In an interview with CoinDesk, Lesuisse said:

"If you only look at the simplest use cases, like I said, 'Hey, Christine, can you send me a $10 Ethereum? This is my wallet address. 'So now you know how much I have. ""

By sharing a person's public Ethereum address, it is easy to know the amount of money held in that address. Of course, users can have multiple cryptocurrency wallets, each holding a different amount of Ethereum. However, leaking one of the wallet addresses may jeopardize the identity of all of the user's wallets, especially if there have been previous transfers between different wallet addresses. Lesuisse emphasizes:

"I said that if I ask my friend to transfer money to me, they will immediately know how much I have. The data is so transparent is obviously a big feature of the blockchain, but for some users, they are afraid to use it on a large scale. of."

That's why Lesuisse and others are working hard to develop better tools on the Ethereum blockchain for privacy transactions or privacy calculations in general. Ultimately, their goal is to encourage larger groups like companies to adopt the Ethereum blockchain.

In an interview with CoinDesk, Paul Brody, head of global innovation at Ernst & Young (EY), talked about the use cases on the Ethereum blockchain. He said:

“If you want to attract companies and large investors, this is crucial. If you want them to use the public blockchain, you have to provide them with privacy features. We believe that without privacy, there will not be many real Enterprise users in the sense."

Pay attention to privacy

This year, some new privacy projects have emerged.

Ernst & Young's blockchain team released a code agreement called "Nightfall" on GitHub last month as an experimental solution to enable anonymous trading on the Ethereum blockchain.

It uses a well-known technique in the field of encryption, namely Zero Knowledge Proof (ZKPs), which was first studied by researchers Shafi Goldwasser, Silvio Micali and Charles Rackoff in the late 1980s in an article entitled "Interactive Proof System". Proposed in the paper of the knowledge complex of Interactive Proof-Systems. Later in 2016, the privacy currency Zcash was launched on the main network and became the first widely used case of zero-knowledge proof for sending “masked transactions” and anonymous users on the public blockchain network.

Recently, after the release of Nightfall in May, the blockchain startup 0xcert development team has begun to iterate the code release and use the irreplaceable ERC-721 token to add new features to its specific implementation. 0xcert Chief Strategy Officer Urban Osvald explained:

"One of the important things we added to Nightfall is selective verification. If I don't want to disclose information, I can do it. Nightfall combines with all the tools we offer, making the combination of tools and features not only widely applicable to game projects. And the field of collectibles, but also paved the way for large enterprise use cases."

When talking about the motive behind the plan, Osvald said:

"Our biggest goal is the widespread adoption of irreplaceable tokens. Obviously, the blockchain as a whole is very slow, and we hope to speed up as quickly as possible."

Current privacy technology

In addition to the transaction privacy of companies developing the Ethereum blockchain, Enigma, another startup based in Ethereum, is committed to creating a chain computing environment for any type of data privacy. In an interview with CoinDesk, Enigma's growth and marketing director Tor Bair said:

"When we talk about computing privacy, it goes beyond the concept that you can protect anonymity or transaction amount, and you can actually calculate the encrypted data.

You can take a decentralized credit score to protect data from the specific users who are trying to build credit value. For games, the data needs to remain private to a particular individual in the game, or you might want to generate random numbers in a safe way. These are all potential applications for our future agreements. On Tuesday, Enigma released its second test network, which, according to Bair, enhanced the "developer experience" using the protocol, which has not yet been released on the main web.

At the same time, Julien Niset, chief scientific officer at Argent, believes that it is necessary to build a basic privacy tool that can be deployed at any time on Ethereum. Niset said:

“Ethereum needs a lot of privacy solutions to meet different needs and requirements. We did solve the first problem, and this is the most problem that needs to be solved now, that is, how can I privately transfer funds from A to B? ""

Looking forward to a more private future

The tool Niset talks about is called Hopper. It is an open source hybrid that uses mobile iOS devices for private transactions on the Ethereum blockchain.

Essentially, Hopper is a smart contract that allows users to privately deposit or remove an ETH person into an account without revealing any public account address. It also uses zero-knowledge proof techniques to prove the recipient of a private transfer. The official Github page describes this:

“Users only need to provide zkSNARK (Zero Knowledge Proof) to prove that they have previously stored 1 ETH in the mixer, they can deposit it into the mixer smart contract, and then deposit it into another account without having to disclose the token. From which account was issued."

Although Hopper can be deployed immediately, Niset warns that it is by no means the ultimate privacy solution for Ethereum. He said:

"We don't want to say that we have solved this problem in Ethereum. This is not the case. This is an open source community. What really matters is people's cooperation. We use the development results of some others and find that we can make it a mobile wallet. A viable product."

As a result, Argent CEO Itamar Lesuisse emphasized that from his perspective, Hopper is a “today's viable” privacy product solution that will be one of many existing solutions in the coming years. Lesuisse concluded:

“There are many solutions currently under development that will become more advanced in the next few years. From a product perspective, we hope to solve this problem today, but there may be more solutions in the future.”

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