Vitalik wants to improve NFT privacy with a new update, stating that his views on the matter have evolved over time.
One of Ethereum’s co-founders, Vitalik Buterin, tweeted today that the Ethereum network should get a new privacy feature. The NFT (non-fungible token) ecosystem’s de facto standard model, ERC721, would get stealth addresses with the update. Users will be able to transmit and receive NFTs anonymously thanks to this change, which Vitalik characterized as “low-tech.”
Idea: stealth addresses for ERC721s.
A low-tech approach to add a significant amount of privacy to the NFT ecosystem.
So you would be able to eg. send an NFT to vitalik.eth without anyone except me (the new owner) being able to see who the new owner is.https://t.co/UdqK6NAYjn
— vitalik.eth (@VitalikButerin) August 8, 2022
Developer Nerolation had already conducted research and published a privacy solution for ERC721 coins. Vitalik suggests using lighter technologies to enhance this remedy, nevertheless.
Since NFTs are unique, Vitalik stated, it would not be necessary to deploy Merkle trees or Zero Knowledge technology to prevent the formation of an “anonymity set.” He added that using straightforward stealth addresses is a preferable option, but finding out how to pay for gas expenses is still a problem.
Consequences of Anonymity
In the comments area, the tweet sparked a contentious discussion over privacy. Others weren’t as enthusiastic about the notion, despite some being adamant about it and even asking for the same level of anonymity for all ERC20 tokens.
Many claimed that this increased level of privacy would undermine blockchain technology’s entire premise of openness. It’s crucial to remember that transparency and privacy may coexist.
Although the parties to a transaction will remain anonymous thanks to stealth addresses, the public ledger will still show that an NFT has been moved. Even privacy supporters, however, are compelled to acknowledge that this new version will make other crimes, such as tax evasion, simpler.
Stealth addresses will make theft tracing much more difficult, making it nearly impossible to determine whose wallet the NFTs were taken from. The new stealth addresses will also facilitate money laundering and wash trading, two prevalent techniques used to artificially boost the value of NFTs.
Ethereum Adopting a Privacy-Centric Strategy?
Vitalik publicly expressed his support for privacy in a tweet from that year. He acknowledged that his views on the matter had evolved over time. He has learned via reading and in-depth contemplation that people should maintain some degree of online privacy even in a perfect society. Now, because of that Vitalik wants to improve NFT privacy with a new update.
It’s likely that Ethereum and the blockchain industry as a whole may prioritize privacy over time. If that occurs, it is crucial that transparency is maintained and that safeguards stop malicious individuals from misusing privacy features.
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