Vitalik Buterin, one of the co-founders of Ethereum, has proposed a concise strategy aimed at improving Layer-1 privacy within the blockchain network.
In a blog entry dated April 11, Buterin laid out a framework that emphasizes enhancing user privacy without necessitating major alterations to the underlying infrastructure of the network.
The initiative focuses on four specific aspects of privacy, including ensuring that on-chain transactions are confidential, partially concealing user activities within decentralized applications, protecting read-access data on the blockchain, and anonymizing communications at the network level.
Buterin mentioned that if these enhancements are adopted, they could establish a new standard where private transactions are the norm.
He further explained that while the activities of individual decentralized applications may still be visible, the connection between a user’s actions taken across various platforms would be veiled.
The Ethereum co-founder concluded by stating that this methodology would safeguard users from prying eyes and infrastructure-level risks, such as compromised RPC nodes.
Key Components
The proposal begins with the integration of privacy tools like Railgun directly into Ethereum wallets. Buterin argued that by doing this, users could manage shielded balances without having to depend on third-party wallets, thereby making privacy more inherently accessible.
He remarked:
“There should be a ‘send from shielded balance’ option, preferably enabled by default. This should all be designed to feel as natural as possible from a UX standpoint. Users should NOT need to download a separate ‘privacy wallet.’”
He also endorsed the idea of using distinct addresses for each decentralized application. Although this may create some user experience challenges, it would greatly reduce the traceability of activities across multiple applications.
To facilitate this, transactions to oneself must ensure privacy by default; a design Buterin considers essential, even with the potential for increased complexity.
Elaborating on this, Buterin noted that such modifications align seamlessly with ongoing endeavors in cross-chain interoperability, where users already interact with multiple chains through separate processes.
He highlighted that incorporating these features into in-app wallets could standardize private interactions without necessitating significant architectural changes.
Buterin also urged for technical enhancements, including TEE-based RPC privacy as a short-term remedy and planning for a future transition to private information retrieval (PIR) when feasible.
Additional suggestions include linking each decentralized app to its own RPC nodes, improving proof aggregation protocols, and developing privacy-focused keystore wallets.