Ethereum Developers Propose Encrypted Mempool and Default Privacy Features
The U.S. government's sanctions on the Ethereum-based mixer Tornado Cash in 2022 sparked ongoing debates in the crypto community regarding privacy and censorship.
- Tornado Cash allowed anonymous crypto transfers; the government claimed it facilitated money laundering.
- Some Ethereum validators avoided Tornado-linked transactions, increasing costs and reducing speed.
- Advocates argued that compliance with sanctions undermines financial privacy principles.
- President Trump lifted the sanctions in March 2023, but issues of user dependence on third-party apps for privacy remain.
- Crypto security researcher Pascal Caversaccio emphasized the need for core privacy features in Ethereum's design.
- Caversaccio proposed several interventions to enhance privacy, including:
- Encrypting Ethereum’s public mempool
- Implementing zero-knowledge cryptography
- Creating confidential transaction formats
- Vitalik Buterin suggested additional privacy measures focusing on anonymizing on-chain activities and adopting a “one address per application” model.
- Discussions on privacy precede Ethereum's upcoming Pectra upgrade, which lacks a primary focus on these concerns.