Ethereum uses PoS and Rollup to be faster and greener, but now is the time to focus on increasing privacy.
Public blockchains offer decentralization and transparency, but lack privacy. Anonymity of transactions in blockchains like Bitcoin
It keeps losing ground because transactions and addresses are easily tracked. Thanks to KYC introduced by many cryptocurrency exchanges, most blockchain transactions can be traced back to the originator, revealing their activities, assets and financial data to the user.
Even decentralized finance (DeFi) interactions can be easily monitored using advanced chain analytics systems. This is why privacy is as important as speed and scalability for cryptography to gain universal acceptance. The average user expects at least bank account-level privacy to be freely traded, and RAILGUN has developed its own ZK (zero-knowledge) based solution.
The main drawback to the utility of digital assets is the lack of privacy. What happens when cryptocurrency users pay for coffee with cryptocurrency? They risk exposing their assets, income and shopping preferences to merchants, peers and anyone who wants to profit from their data. . Taking it a step further, how many people would be comfortable with getting cryptocurrency if it meant exposing all of their financial information to the world? Necessary reinforcement.
There is an increased focus on privacy throughout the blockchain community
Privacy is a key goal of public blockchains, especially Ethereum, which accounts for about two-thirds of all its DeFi activity. The need for privacy in Ethereum has grown since the widespread use of layer 2 solutions such as Arbitrum.
in 2023 month of January. Ethereum founder Vitalik Buterin has acknowledged the need to improve blockchain privacy. He proposed a “secret address system” to increase the privacy of Ethereum transactions. The secret address is generated by the wallet and is a masked public key address for receiving funds in a private environment. To access secret addresses, a special code called a “spend key” is required. It allows two parties to transact without public disclosure. However, secret addresses are an imperfect solution because they do not take into account all the features of DeFi.
It is too early to know when and to what extent Ethereum will implement privacy features, but the good news is that there are already solutions that can achieve a high level of privacy. (zk-SNARK) is a smart contract system that ensures privacy through technology.
RAILGUN generates zk-SNARK encryption only on smart contracts, making it one of the leading absolute privacy solutions in the DeFi space right now. It allows users to anonymously store funds and manage decentralized applications (DApps) anonymously and without storage.
RAILGUN, operated by a Decentralized Autonomous Organization (DAO), uses zk-SNARK to encrypt transaction details, wallet balances, and transaction history. Unlike other third-party Layer 2 privacy solutions, RAILGUN works directly on-chain, allowing users to anonymously transfer, trade, lend, borrow, and trade all kinds of DApps.
In addition, RAILGUN smart contracts can be connected to any Ethereum virtual machine DApp for shielded transactions using the RAILGUN Connect development toolkit.
RAILGUN was recently implemented with Arbitrum (Ethereum’s Layer 2 interconnection technology), making the second largest decentralized network offering privacy along with speed and high bandwidth. RAILGUN co-founder Alan Scott said:
“RAILGUN’s implementation of Arbitrum is a huge win for DeFi privacy. Arbitrum’s scalability and RAILGUN’s zk-SNARK-based privacy are an exciting combination. It will be interesting to see how DeFi builders use the RAILGUN infrastructure. With Arbitrum, we hope to create new privacy-preserving DeFi solutions.
In addition to its work with Ethereum and Arbitrum, RAILGUN enables BSC and Polygon privacy on the network. Additionally, contributors are working on adding support for Solana, Near, and Metis.
As blockchain adoption expands to multiple use cases, developers and users are beginning to focus more on privacy. So if developers can solve the puzzle, privacy could become one of the most important blockchain trends in the coming years.