Vitalik Buterin Shocked by this New NFT Privacy Proposal

A new proposal would see a new ERC-721 extension use stealth addresses to obscure NFT transactions on the Ethereum network.

• Inspired by Vitalik Buterin’s idea of non-transferrable Soulbound tokens, Ethereum researcher Anton Wahrstätter came up with a fresh proposal for an ERC-721 extension that would implement “stealth” addresses to obscure public blockchain transactions involving non-fungible tokens (NFTs).
• To implement stealth addresses for ERC-721 tokens — Ethereum’s current token standard for NFTs — Wahrstätter proposes utilizing a privacy-focused piece of cryptography known as zk-SNARKs.
• Per the proposal, part of a stealth address, which is essentially a one-time address for every transaction, is inserted into a Merkle tree — a data structure used for data verification and synchronization — thus allowing for sending, storing, and burning NFTs without leaving much of the transaction details seen on the public blockchain.
• While Wahrstätter’s proposal is still in the idea stage, it’s already drawn the attention of Vitalik Buterin, one of Ethereum’s co-founders, who described it as “a low-tech approach to add a significant amount of privacy to the NFT ecosystem.”
• “So you would be able to [for example] send an NFT to vitalik.eth without anyone except me (the new owner) being able to see who the new owner is,” he wrote in a tweet on Monda

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 — @VitalikButerin

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• Buterin, however, had a few objections to Wahrstätter’s proposal, arguing that the idea of anonymous NFT transactions can probably be accomplished “with much lighter-weight technology.”
• Commenting on the proposal, he said that “the reason why you don’t need Merkle trees or ZK-SNARK-level privacy is that each ERC-721 is unique, so there’s no possibility of creating an ‘anonymity set’ for an ERC-721.”
• “Rather, you just want to hide the link to the sender and recipient’s highly visible public identity (so, you can send an ERC-721 to ‘vitalik.eth’ and I can see it, but no one else can see that vitalik.eth received an ERC-721; they will just see that someone received an ERC-721),” added Buterin.
• “One remaining challenge,” according to the co-founder of Ethereum, is to figure out how to pay fees.
• “The best I can come up with is, if you send someone an ERC-721 also send along enough ETH to pay fees 5–50 times to send it further. If you get an ERC-721 without enough ETH, then you can tornado some ETH in to keep the transfer chain going,” he wrote.

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Vitalik Buterin Shocked by this New NFT Privacy Proposal was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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