Stanford Researchers, Visa Research Create a Ethereum Blockchain Smart Contracts Privacy Mechanism
A group of researchers from the University of Stanford, together with Visa Research, have created a mechanism to enhance the privacy in smart contracts from the second largest crypto blockchain in the market, Ethereum. The paper that was published about this new mechanism was originally posted on Stanford University’s Applied Cryptography Group’s site.
According to the information in the paper, this mechanism will be called Zether and it will be fully decentralized and confidential for the users. It was specifically tailored for Ethereum smart contracts.
Any smart contract created with this new technology will maintain account balances encrypted and it will enable deposits and transfers of funds just like privacy coins do but on the Ethereum blockchain.
The authors of this protocol affirm that all transactions made on Zether will be fully confidential and that they will cost about 0.014 ETH, which is less than $2 USD at the time of this report. The creators were inspired by Monero when they created this software, as the privacy coin is one of the most well-regarded assets in the industry.
Zether will hide and the sender and receiver of a certain transaction among a group of users. No trusted set-up will be needed to make these transactions and also no underlying changes will be needed, you just use the mechanism on the smart contract.
Obviously, the Zether contract will never transfer funds without checking transfer proof first and the software was created so that it will not malfunction even if another malicious contract gets in contact with it.
If all of what is currently being promised actually happens, it looks like this may be a good solution for the people who wanted to make their Ethereum transactions more private than they already are.
Private Coins, Government And The Crypto Community
While a part of the community is very enthusiastic with the concept of private coins, the other one is not so much. Many companies and tokens are starting to create privacy solutions. For instance, Litecoin’s creator Charlie Lee, which will try to use the Mimblewimble protocol in order to transform LTC into a privacy coin.
Other members who are more concerned about this are the ones who fear that privacy coins may be targetted by the governments. For instance, the Japanese Financial Services Authority (FSA) has affirmed that cryptos with privacy options should be excluded from exchanges.
This will be a long fight, as some will be in favor of more transparency while others will want to know how people are spending their cryptos.