Vitalik Buterin, the founder of the Ethereum network, has shared details on the idea of utilizing stealth addresses in the trading of non-fungible tokens (NFTs). This entails that a user can send an NFT (ERC-721 token) to a recipient without anyone else knowing the recipient of the token.
Buterin noted that this new idea will “add a significant amount of privacy to the NFT ecosystem.”
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
Stealth Addresses for NFTs
On the Ethereum Research website, Buterin expatiated on the theory, sharing logical computations on the theory, then explaining its functionality, where he said:
“[Y]ou just want to hide the link to the sender and recipient’s highly visible public identity (so, you can send an ERC721 to “vitalik.eth” and I can see it, but no one else can see that vitalik.eth received an ERC721; they will just see that someone received an ERC721).”
Meanwhile, Buterin is not the first to come up with the idea of a stealth address for NFTs. Four days ago, a user on the Ethereum Research website with the username – Nerolation – proposed the idea. He cited the processes involved in transferring, minting, and burning the tokens.
Nerolation further gave a brief detail on how the stealth address for the NFTs will be produced, where he added that the concept is somewhat similar to Buterin’s proposal on soulbound tokens.
While Nerolation felt the Merkle tree applies to the theory, Buterin added in his comment that a developer need not make use of a Merkle tree or a cryptographic proof that enables a user to prove ownership of an asset called Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK). The reason for this was the non-interchangeable nature of NFTs.
Transparency of Blockchain Questioned
Following Vitalik Buterin’s post on Twitter, several users began to antagonize the idea, noting that the transparency of blockchain-based transactions will no longer be open source as they are currently if the theory should be implemented. Others were worried that the new proposal would give birth to an increased report of NFT thefts.
Even though NFTs are currently traded on popular crypto exchanges like Binance, Coinbase, and Kraken, embracing the new proposal in many top NFT companies like Yuga labs might make the asset class involved face the same fate as private cryptocurrencies Monero and ZCash, which have been delisted from many exchanges.
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