The founder of Ethereum (ETH), Vitalik Buterin, claims that the top smart contract platform confronts a significant challenge but that a very straightforward solution might be very beneficial. One of the biggest problems Ethereum is now facing, according to Buterin’s blog article, is privacy.
Anything that is placed on a public blockchain is public by default. In addition to money and financial transactions, this increasingly refers to ENS (Ethereum Name Service) names, POAPs (Proof of Attendance Protocols), NFTs, soulbound tokens, and many other things.
In practice, having a major amount of your life available for anybody to view and evaluate requires using the complete suite of Ethereum applications. It is commonly acknowledged that improving this situation is a serious issue. However, up until now, the majority of conversations on increasing privacy have been on a single use case: privacy-preserving transfers of ETH and popular ERC20 tokens (which are typically self-transfers).
According to Vitalik Buterin, using stealth addresses is currently the most effective way to deal with privacy issues on Ethereum. To prevent payment tracing, a stealth address is a one-time address that obscures the sender’s public key.
Vitalik Buterin claims that by incorporating native options for implementing hidden addresses, crypto wallets might assist users in taking advantage of them. “Simple stealth addresses can be put into place right away and might greatly improve practical user privacy on Ethereum. They do demand some effort on your part to assist them financially. Nevertheless, I believe that for further privacy-related reasons, wallets should begin advancing toward a more naturally multi-address architecture (for instance, establishing a separate address for each application you interact with may be one possibility).