Ethereum founder Vitalik Buterin wants to implement stealth addresses for ERC-721 tokens — or Ethereum’s current token standard for NFTs, according to a Monday tweet. With the implementation of this feature, users can transfer, mint, and burn NFTs with relative anonymity, as described in the ethresear.ch page Buterin linked in his initial tweet.
Anton Wahrstätter — researcher and lecturer at the Institute for Distributed Ledgers and Token Economy (WU), who also researches at the Research Institute for Cryptoeconomics — wrote the research behind Buterin’s tweet. In turn, Wahrstätter drew inspiration for his proposed stealth addresses from a January blog post by Buterin that described the need for private proof of attendance protocol (POAP) NFTs in a Soulbound Token-enabled world. For medical treatments as divisive in certain areas as vaccination, Buterin argued that enabling users to hide these tokens at will wouldn’t just be a privacy measure — but an essential facet of a user’s overall security measures online.
But not everyone’s a fan of the proposal.
Different angles of security
Although the discussion on implementing stealth addresses seems mostly informed by Buterin’s vision of a decentralized society (DeSoc), some users expressed concern online about Buterin’s co-signing of stealth addresses. Considering the state of the NFT ecosystem, stealth addresses could offer thieves and other bad actors a way to make the retrieval of stolen NFTs near-impossible. Without a publicly available address that investigators can look into on the blockchain, tracking down stolen NFTs becomes an even harder task than it already is.
However, as mentioned in the whitepaper for Soulbound Tokens and on Buterin’s blog, the mass adoption of the social recovery wallet might overcome the issues brought on by providing ERC-721 tokens with stealth address functionality.
Under this model, users may assign their wallets to five “guardians” — people in whom the users place a great deal of trust. These “guardians” will be able to change the private keys of the wallet they are entrusted with, should it become compromised. Doing so grants a user’s crypto wallet another point of failure, thus an added layer of security. This, along with ease of use and accessibility, make up the three core features essential to a genuinely secure crypto wallet, according to Buterin.
It’s worth noting that Buterin’s blog entry on the importance of establishing better security features for crypto wallets was published in January of 2021 — a few months removed from the NFT market’s bull run throughout the calendar year. More than a year later, crypto wallets can still be subjected to large-scale hacking attacks, which happened when Solana users were attacked, leaving more than 8,000 crypto wallets compromised and emptied.
Some may argue that Buterin’s idea breaks with core concepts of blockchain technology: creating a new, decentralized economy based on publicly accessible records — one of the primary features of NFTs and cryptocurrency. Additionally, even with progressively more companies participating in the long-term development of Buterin’s planned DeSoc, work towards establishing this future Web3 society can’t begin in earnest if the wallets that house our financial assets and sensitive information on the blockchain remain heavily vulnerable to foul play.
If this article, video or photo intrigues any copyright, please indicate it to the author’s email or in the comment box.