It isn’t ironic that users of the public blockchain network are clamoring for privacy, when, in reality, blockchain technology is designed to only consider data valid, when it is shared and broadly distributed on the network.
Furthermore, for a prominent blockchain network like Ethereum, there exist more than a few blockchain analytics platforms and data extraction facilities to multiply existing data beyond only the users.
Blockchain Privacy Issues
A noteworthy discovery is that even when a user possesses numerous cryptocurrency wallets with diverse amounts of ether contained in them, divulging information about one wallet address may put at risk the identity of all crypto wallets owned by the user, particularly if funds had hitherto, been moved between wallet addresses. Typically, as a consequence of having the knowledge of a user’s public Ethereum address, the total value of funds contained in the address is uncovered without difficulty.
The knowledge of the implication of the above has seen developers laboring towards improved tools for carrying out private businesses and even private calculations in general on the Ethereum blockchain. Eventually, the purpose is to inspire better acceptance of the Ethereum blockchain by larger groups of people, including cooperate entities.
Paul Brody, the EY global innovation leader for blockchain is of the opinion that beefing up privacy matters is essential to attract corporations and large-scale investors. He believes that providing these businesses with privacy will motivate them to use public blockchain, and that without privacy, blockchain technology will not be taken seriously by enterprise users.
Giving Privacy the Attention It Needs
With privacy getting its well-deserved attention, a number of privacy projects have been unveiled this year.
‘Nightfall’ was released in May by the blockchain team at Ey. The code which was released on GitHub is an investigational solution to allow anonymous transactions on the Ethereum blockchain.
Following the release of Nightfall, the developer team at 0xcert has acted on the code and added new features to enable precise execution with non-fungible ERC-721 tokens. The chief strategy officer at 0xcert believes that the newly launched privacy project will get the network closer to achieving the biggest goal of widespread adoption of non-fungible tokens and obviously blockchain in general.
In addition to transactional privacy on the Ethereum blockchain, Enigma, an Ethereum-based Start-up is devoted to generating an off-chain computational setting for any type of data privacy. Head of growth and marketing, Tor Bair feels that computational privacy goes beyond thinking that you can conceal the identity of users or the amount of a transaction, it involves being actually able to do computations on encrypted data.
There is hope for enhanced privacy in the future
Hopper is an open source mixer that helps users make private dealings on the Ethereum blockchain using a mobile iOS device. It lets users deposit notes of 1 ETH and also withdraws funds privately without revealing any public account addresses. It also controls ZKPs in order to validate recipients of private transfers. This however cannot be said to be the ultimate solution to the Ethereum blockchain privacy concern. There are several solutions out there that are on the way and will become way more advanced in the nearest future.