What is a stealth address? Vitalik's Ethereum privacy solution.

2023-01-31 16:53

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Original Title: "What Is a Stealth Address? Vitalik's Solution for Privacy on Ethereum"

Author: Kenny

Translation: ChinaDeFi

The co-founder of Ethereum, Vitalik Buterin, recently published an article discussing how to increase privacy on the Ethereum network through the use of so-called "stealth addresses". In the article, he explains how stealth addresses work and the potential they have to increase user privacy on the Ethereum network. The author attempts to explain the workings of stealth addresses using an example: Alice wants to send 1.2 ETH to Bob.

Why do we need stealth addresses?

Many people believe that Ethereum and Bitcoin, these public blockchains, are private, but this is actually a common misconception. We should be clear that public blockchains are not private. Public blockchains do provide some degree of privacy through the use of "pseudonyms" in the form of wallet addresses. However, if we think of wallet addresses as accounts, once someone matches that account to a real-life person, everything that person does will be exposed to the public eye.

The wallet address is used for every interaction on the blockchain, including transactions, interactions with decentralized applications, purchasing NFTs, etc. All of this data is recorded and stored publicly, and anyone with internet access can view it. Websites like Etherscan make it easy for people to view this information. Applications like Dune Analytics provide convenience for analyzing this information.

If there is no privacy protection, these information can be easily used by others without consent. Using public blockchain, it is possible to see users' purchase locations, subscriptions, and other contents. Some people with malicious intent may use this information to engage in criminal activities. Therefore, on-chain privacy solutions are rapidly becoming the solution to protect Web3 users worldwide. Recently, Vitalik Buterin has delved deeper into this topic and provided a solution for the Ethereum ecosystem through so-called stealth addresses.

Generate keys to create stealth addresses

The stealth address must be generated by two participants: in the example below, Bob is the recipient and Alice is the sender.

Bob Generated:

One spending key, known only to Bob, will be used to generate addresses; one stealth meta-address, which is a public address visible to anyone, but also a master address that can be used to derive an unlimited number of stealth addresses with partners like Alice.

In order to obtain the unique stealth addresses of Bob and Alice, Alice also needs to generate two keys:

An ephemeral private key known only to Alice; a corresponding ephemeral public key similar to a stealth address.

A temporary public key is generated from a temporary private key, similar to how a mnemonic generates an Ethereum address. The temporary public key can be sent to a public ledger that anyone can view. The temporary key pair is only used once, so if Alice wants to transact with someone else, she must generate a new temporary key pair.

Summing up, the conclusion is:

Bob generated a spending key (private) and used it to generate a stealth address (public).

Alice generated a temporary private key and used it to generate a temporary public key.

The next step to generate the final stealth address is for Bob and Alice to share their respective public keys. Bob provides Alice with his transparent public address (public) that anyone can view. Then, Alice combines the transparent public address provided by Bob with her own temporary private key to create the stealth address. Alice can then send 1.2 ETH to the stealth address.

Accessing Hidden Addresses

Bob needs to create the same stealth address that Alice created in order to locate the stealth address where Alice sent him 1.2 ETH. However, there is a problem in that this step requires the combination of Alice's temporary private key and Bob's stealth address, and Bob does not know Alice's temporary private key because it is private.

If using cryptographic concepts, Bob would have another option: he can create the same stealth address using a different private/public key combination (and use his spending key to control the cryptocurrency within the stealth address). Bob can combine his spending key with Alice's temporary public key to create a stealth address.

To find Alice's temporary public key, Bob needs to browse through the list of all existing temporary public keys. Combining each temporary public key he sees with his spending key will create a resulting stealth address. Bob checks the available cryptocurrency in the resulting stealth address. In most cases, the stealth address created using a random temporary public key and Bob's spending key should contain 0 ETH. However, by combining it with Alice's temporary public key, Bob can see that the resulting stealth address contains 1.2 ETH.

Actually, Bob does not need to manually match all the temporary public keys to find the correct one. This process will be automatically completed by the computer, which will greatly reduce the time and effort invested.

Summary

The proposal released by Vitalik Buterin is a practical solution that can better protect user privacy on the Ethereum network. Other projects such as Manta Network use the zkAddress system + UTXO to achieve on-chain privacy. Buterin's proposed stealth address system is a unique and promising privacy solution on the Ethereum network. More importantly, leaders like Vitalik Buterin are considering innovative on-chain privacy solutions, which is a step in the right direction.