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Vitalik Reveals Ethereum’s “Biggest Remaining Challenge”

Vitalik Buterin, co-founder of the Ethereum network, shared a possible solution to what he calls Ethereum’s “biggest remaining challenge.”

According to Wallex and quoted by Coin Telegraph, Buterin published a post on his personal blog on January 20. In this post, he talked about the need for public blockchains to provide a privacy solution because all the information on the blockchain is public by default.

Vitalik Buterin then explained the concept of “hidden addresses”; Addresses he said could potentially include peer-to-peer transactions, NFT token transfers, and Ethereum Name Service (ENS) registrations, protecting user privacy.

In the said post, Buterin explained how transactions can be made on the Ethereum network between two anonymous people:

In the first step, the receiving user generates and maintains a “spending key”, which is used to generate a secret meta-address.

This address – which can even be registered in the ENS – is then sent to the sender. The sender creates a secret address (belonging to the recipient) by performing cryptographic operations on the meta address.

The sender can then send the desired asset to the created secret address and, in addition, publish a temporary key to prove that the secret address belongs to the recipient.

According to this mechanism, a new secret address will be created for each new transaction.

Diagram of secret transaction steps

Vitalik noted that to ensure that the link between the meta address and the user’s secret address is not revealed, the processes of “Diffie-Hellman key exchange(Diffie-Hellman) and “key blinding”.

Buterin also added that ZK-SNARKs technology can be used to transfer transaction fees. Buterin emphasized that this may lead to its own problems in the short term: “It will cost a huge gas; A few hundred thousand gas for a simple transaction.

Stealth addresses have long been proposed as a solution to the privacy problem in public blockchain networks. The history of working on this issue goes back to 2014. However, few solutions have been marketed so far.

Also, this is not the first time Vitalik Buterin talks about the concept of hidden addresses in Ethereum. In August of last year, he called secret addresses a “low-tech approach” to anonymously transferring ERC-721 tokens.

Regarding the difference in the type of privacy offered by hidden addresses and the Tornado Cash platform, Buterin said:

Tornado Cash can hide the transfer of common tokens such as ETH or large ERC20 tokens, but the transfer hiding of abandoned tokens is very weak and cannot do anything about NFT tokens.

Vitalik had some advice for projects developing such solutions:

Basic secret addresses can be quickly implemented today and can bring a significant improvement to the privacy of Ethereum users. They require a slight change in wallet support to work. That being said, my personal opinion is that wallet providers should move to multi-address models for other reasons.

Buterin acknowledged that secret addresses may raise concerns about issues such as social recovery of funds (if the private key is forgotten). However, he is confident that the problems can be fixed with time:

In the long term, these problems are solvable, but the long-term secret address ecosystem will depend heavily on proof-of-concept.

The post Vitalik Reveals Ethereum’s ‘Biggest Remaining Challenge’ appeared first on Wallex Blog. appeared.


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