Ethereum's Buterin Proposes 'Stealth Addresses' To Enhance Privacy Protections

Ethereum co-founder Vitalik Buterin released a new blog over the weekend that seeks to enhance privacy protections for blockchain users with a "stealth address system."

In his writing, Buterin notes that assuring privacy remains a big challenge for the ecosystem, and that “improving this state of affairs is an important problem”.

Stealth addresses are generated by wallets and muddle public key addresses in order to transact in a private way. To access these private transactions, one must use a special key called the "spending key.”

Privacy has been a big concern for the Ethereum ecosystem, given that transacting on the blockchain is public. There are already some privacy mechanisms. One notable example, Tornado Cash, has limits, Buterin noted, saying it can only hide “mainstream fungible assets such as ETH or major ERC-20s.”

Stealth addresses would provide a mechanism to also add privacy protections to non-fungible tokens (NFTs) and Ethereum Name Service (ENS) domain names.

Toni Wahrstätter, an Ethereum researcher who also reviewed Buterin’s blog post, told CoinDesk: “Stealth addresses have great potential to be used in every transaction in which the interaction between two parties should not be revealed to the public.”

Wahrstätter emphasized the need for the stealth address system for the expansion of everyday crypto use: “In particular, think of donations or simply payroll checks,” highlighting that users may not want others to see their personal transactions on a public blockchain.

“For example, when I buy a coffee at the supermarket, I might not want the supermarket to know my employer, how much I earn and what I spend it on," Wahrstätter added. "Stealth addresses are yet another, quite straightforward tool to increase the overall privacy in the network.”

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