Ethereum’s Vitalik Buterin Proposes ‘Stealth Address’ System to Enhance Blockchain Privacy – Here’s How it Works

Source:
Pixabay

Ethereum
creator

Vitalik
Buterin
has
proposed
a
new
“stealth
address”
system
for
Ethereum
that
would
dramatically
improve
and
simplify
the
workflow
for
achieving
privacy
for
ordinary
users.

According
to
a
blog

post
published
by
Buterin
over
the
weekend
and
titled

An
incomplete
guide
to
stealth
addresses,
the
proposed
system
would
bring
the
same
privacy
properties
as
generating
new
addresses
for
each
transaction
someone
receives.

The
only
difference
would
be
that
this
would
happen
without
any
work
needed
for
the
receiver.

Privacy
remains
a
large
challenge
on
Ethereum

In
the
blog
post,
Buterin
admitted
that
privacy

or
the
lack
thereof

is
a
large
problem
for
Ethereum
users,
saying:

“One
of
the
largest
remaining
challenges
in
the
Ethereum
ecosystem
is
privacy.
By
default,
anything
that
goes
onto
a
public
blockchain
is
public
[…]
In
practice,
using
the
entire
suite
of
Ethereum
applications
involves
making
a
significant
portion
of
your
life
public
for
anyone
to
see
and
analyze.”

He
added
that
improving
this
situation
for
users
is
“widely
recognized”
as
an
important
problem
that
developers
should
work
on.

Secret
spending
keys
and
stealth
meta-addresses

Specifically,
the
system
proposed
by
Buterin
would
work
by
having
wallets
generate
so-called
stealth
meta-addresses
for
receiving
funds
using
a
secret
“spending
key”
that
only
the
receiving
party
in
a
transaction
has
access
to.
The
stealth
address
is
then
shared
with
the
sender,
who
must
also
publish
a
piece
of
cryptographic
data
called
an
ephemeral
pubkey
on-chain
for
the
receiver
to
understand
that
the
address
belongs
to
him.

To
enable
the
generation
of
both
the
secret
spending
key
and
the
public
stealth
meta-address,
Buterin
proposed
to
use
a
system
known
as
the

Diffie-Hellman
key
exchange.
According
to
Buterin,
this
system
is
a
foundational
part
of
modern
cryptography,
and
would
accomplish
exactly
what
is
needed
for
stealth
addresses
to
be
implemented
on
Ethereum.

The
Ethereum
founder
went
on
to
share
a
detailed
illustration
of
the
workflow
with
the
new
system:

Source:
Vitalik.ca

Zero-knowledge
proofs

In
conclusion,
the
Ethereum
creator
admitted
that
stealth
addresses
do
introduce
“some
longer-term
usability
concerns,”
including
problems
around
so-called
“social
recovery”
of
lost
keys.
He
said
that
these
concerns
could
be
simply
accepted
for
now,
but
made
it
clear
that
a
more
lasting
solution
will
likely
depend
“really
heavily”
on

zero-knowledge
(ZK)
proofs.