Vitalik Buterin Shares Streamlined Privacy Strategy for Ethereum to Boost User Security

In his latest update on the community-driven platform Ethereum Magicians, Ethereum co-founder Vitalik Buterin has laid out a streamlined roadmap for enhancing privacy on the Layer 1 blockchain of Ethereum, focusing on safeguarding user privacy without major changes to the underlying consensus.

This roadmap focuses on four critical privacy aspects: safeguarding on-chain payments, achieving partial anonymization of on-chain activities within various applications, ensuring privacy during chain reads (like RPC calls), and implementing network-level anonymization. The plan is designed to seamlessly integrate with future initiatives that may involve more extensive modifications to Layer 1, alongside specialized privacy rollups or other innovative privacy enhancements.

Ethereum’s Privacy Strategy: Advancing User Security with Enhanced Privacy Protocols 

The strategy encompasses the integration of privacy tools such as Railgun and Privacy Pools into current wallet systems. These wallets should be outfitted with a shielded balance, allowing users to conveniently choose the option to send from their shielded balance by default when transferring funds. This user-friendly approach aims for a smooth user experience (UX), eliminating the need for a separate 'privacy wallet.'

The proposed ecosystem is leaning toward adopting a 'one address per application' model by default. Although this represents a departure from traditional methods and may reduce some convenience, it's seen as a pragmatic step toward eliminating visible connections between a user's activities across various applications. This model also aligns effectively with in-app wallets, as the necessary workflows are reminiscent of those used in cross-chain transactions, such as depositing funds from diverse sources onto a single chain.

The proposal also includes making self-directed transactions privacy-enhanced by default, which is vital for the effective functioning of the aforementioned system.

Moreover, the proposal puts forth the development of FOCIL in conjunction with EIP-7701 to ensure compatibility. This development, along with the advantages gained from account abstraction via EIP-7701, will enable privacy protocols like Privacy Pools, Railway, and Tornado to operate independently of relays or public broadcasters, streamlining their development pipeline. FOCIL helps bolster transaction censorship resistance, particularly for transactions focused on privacy.

To enhance privacy, it is suggested that TEE-based remote procedure call (RPC) privacy be incorporated into current wallets as a short-term fix. Automata is already working on a version of this technology that requires further testing and refinement. This upgrade would allow users to engage with RPC nodes while maintaining stronger protections against potential private data collection.

As the technology evolves, it is recommended to transition from TEE solutions to private information retrieval (PIR), which offers cryptographic assurances that surpass TEEs. However, currently, PIR lacks the efficiency required for processing extensive datasets. A mixed strategy could be adopted whereby TEEs manage smaller segments of state data and PIR is applied within those segments, adjusting constants as PIR technology advances.

Additionally, wallets should connect to various RPC nodes, ideally through a mixnet, and utilize different RPC nodes for each decentralized application (dApp). By enhancing the security of RPC nodes, such as including light client support, users can trust a broader selection of RPC servers, thereby minimizing metadata leakage.

There should also be an emphasis on developing proof aggregation protocols that allow multiple transactions under different privacy protocols to consolidate into one single on-chain proof, which would reduce gas costs associated with privacy solutions.

Efforts to create privacy-preserving keystore wallets are also encouraged. These wallets would empower users to update their account verification methods—be it algorithms or keys—in one go, ensuring that these updates reflect throughout all private notes they manage, spanning both Layer 1 and beyond, without establishing public connections between those notes. Layer 2 networks By the culmination of this roadmap, a significant portion of transactions will be conducted privately, with private sending emerging as the default option in numerous scenarios. Although activities within individual applications will remain visible, the interconnectedness of activities across different applications will be kept confidential. These privacy assurances will protect against not only those passively monitoring the blockchain but also those operating RPC nodes.

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