There was drama on CT NG!
A 🧵 1/
Not long ago, we witnessed the case of a defi degen trade gone wrong and how defi detectives were quick to identify wallet addresses of influencers linked to that rug project. While this reveal may seem like a good move, I learnt something. 2/
You are not anonymous on the blockchain.
Wait a sec! You thought you were?
Ever heard of whale tracking? Or blockchain explorers? Or even ENS and other web3 domain name services?
Do you still think you are anonymous with Etherscan or solscan? 3/
Just yesterday, we saw the case of the lady who clamoured for justice after her picture was listed on Opensea without her consent (even with watermarks). Some so-called DeFi experts ruled it a lost case.
But as I type this, the thief's identity is already known. 4/
twitter.com/UnkleAyo/status/1625064760197758976?t=MPW8V3sMm9kX2IOwY8HFIQ&s=19
So, tell me about anonymity again.
You would say transparency helps solve frauds and scams—like the above scenarios. No lies, I agree. But it is a double-edged sword. 5/
So, I put it to you. Is blockchain transparency worth sacrificing your privacy? Where on-chain analysts can see your every transaction on anonymous wallet addresses, with or without an ENS. 6/
Truth is privacy is a big deal in the world of web3. That's why smart minds are working on solutions like zero-knowledge (zK) proofs and stealth wallets.
Enough of these buzzwords; let me break it down. 7/
zK proofs provide a solution to privacy issues by verifying the validity of statements without revealing the underlying information. They are used to verify the ownership of assets, such as soul bound tokens and NFTs, without revealing the exact details of the assets being held.
This thread will focus on stealth addresses, so let's jump straight into that.
#StealthAddress is a new transaction system where your wallet address stays hidden while receiving assets. The transfer would still be visible, but the recipient's identity remains a secret! 9/
A quick story. On this same CT NG, someone asked their idolo to gift them tokens. He obliged. However, the intention of the giveaway seeker was not to get funds but to check how much (and what) assets the idolo had in his wallet. Weird behaviour, but not uncommon. 10/
That issue could have been avoided with stealth addresses.
Suppose you do a giveaway on the TL. People get the funds, but they won't know which wallet address the funds are coming from. The transactions are on-chain, but no identity is revealed. 11/
Jan 23, Vitalik Buterin dropped a post on Stealth Addresses, which he proposes will increase privacy on Ethereum. It is similar to Tornado cash but better. Tornado Cash, for example, only offers privacy for mainstream tokens and can be used for shady transactions. 12/
twitter.com/VitalikButerin/status/1616527030790623233?t=t-GHCeTbdkMuuuN3FzjSpw&s=19
Stealth addresses are new, so they may be complex. It also comes with some loopholes, such as social recovery, paying transaction fees, and more. However, it is a crucial innovation for identity management. 13/
It's the end of the thread.
Now, over to you.
Do you think privacy and transparency can coexist? Let me hear your thoughts.