Mixers. Computational data layers. Zero-knowledge proofs: these are just a few of the technologies being leveraged to enhance privacy on the ethereum blockchain.
Privacy for a public blockchain network is a bit of an oxymoron, given that, by nature of the technology’s design, data must be shared and widely distributed on the network in order to be considered valid. What’s more, for a high-profile public blockchain network like ethereum, several blockchain analytics websites and data scraping services exist to proliferate this data beyond just the users of the network.
Itamar Lesuisse, the CEO and co-founder of crypto wallet tool Argent, describes the matter of privacy on the ethereum blockchain as an issue for even “the most simplest use case” on the platform.
“If you just look at the most simplest use case, if I say, ‘Hey Christine, can you send me ten dollars [worth of ether]? Here’s my wallet address.’ Now, you know how much money I have.” Lesuisse said during an interview with CoinDesk.
By virtue of sharing one’s public ethereum address, the amount of funds being held within that address is easily uncovered. Of course, a user could hold several cryptocurrency wallets with different amounts of ether held within them. However, disclosing the wallet address of one of them may jeopardize the identity of all wallets owned by a user especially if funds had previously been transferred between wallet addresses.
“I’m talking here about friends who I asked to send me some money. They would instantly know how much I have,” emphasized Lesuisse. “It’s so transparent, which is a great picture of blockchain, but for some users, it might scare them away to use it at scale.”
This is why Lesuisse and others are working towards better tools for making private transactions and even private computations in general on the ethereum blockchain. Ultimately, the aim is to encourage greater adoption of the ethereum blockchain by larger…