Following Bitcoin, the second most famous token of the crypto ecosystem is Ethereum; from market cap point of view and with the number of use cases it has within the crypto world. In this decade long journey of the crypto space, Ethereum has owned 2022. Why? Because of the execution of the historic event of the merge. The process of making Ethereum more scalable and available for the crypto community had started ever since the merge was successfully completed. With the following upgrades soon coming for the Ethereum network, the Shanghai upgrades lined up to be deployed by March (tentative), the existing problems are being talked about.
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Earlier this month, on January 20, 2023, the Ethereum creator, Vitalik Buterin posted in his blog about a proposed system for making the Ethereum blockchain more secure. According to his proposal, an introduction of a new “stealth address” system for Ethereum can be a method that would dramatically be able to improve and simplify the workflow within the network for achieving privacy for ordinary users. As discussed in the blog post by Vitalik that was posted during the weekend, titled as An incomplete guide to stealth addresses, the proposed system will be able to bring the same properties of privacy as generating new addresses would bring for each transaction that someone receives.
The main difference would be that the new proposal will be able to execute itself without any work for the receiver.
Vitalik says, “One of the largest remaining challenges in the Ethereum ecosystem is privacy. By default, anything that goes onto a public blockchain is public. Increasingly, this means not just money and financial transactions, but also ENS names, POAPs, NFTs, soulbound tokens, and much more. In practice, using the entire suite of Ethereum applications involves making a significant portion of your life public for anyone to see and analyze.”
The proposed stealth address system, as explained by Vitalik would mainly work towards improving the privacy situation for users and this is “widely recognized” as an important problem that developers should work on.
How Does Stealth Address Work?
This system of introducing stealth address that has been proposed by Buterin, it would work with users having wallets that will be generating the so-called stealth meta-addresses for receiving funds using a secret “spending key”. This spending key is a special factor, as only the receiving party in a transaction has access to it. Following that, the stealth address is then shared with the sender. Once sent, the sender must also publish a piece of cryptographic data, which is called an ephemeral pubkey on-chain. This is done so that the receiver get to understand that the address belongs to him.
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