Researchers at Stanford University, in collaboration with Visa Research have developed a privacy mechanism for Ethereum (ETH) smart contracts. As published paper illustrated, they have built a fully-decentralized, confidential payment mechanism, named Zether, which is reliable with both Ethereum and other smart contract platforms. It also reported that they have created a new smart contract that can be implemented either individually or by other smart contracts, which maintains the account balances encrypted and allows the deposit, transfer, and withdrawal of funds through Cryptography proofs.
On this development, the researchers have claimed that transactions on Zether are confidential, where one transaction costs around 0.014 ETH or approximately USD 1.51 at press time. According to the paper, improved confidentiality is enabled by the lock funds option in an account to a smart contract. Further, it explained that the type of obscurity ensured by Zether is more akin to Monero (XMR). The researchers in the paper explained an extension to Zeether that can also conceal the history of the sender and receiver involved in a transaction amongst a group of users selected by the sender. The Zether contract will never send funds without first checking a proper burn or transfer proof, even if the request comes from another smart contract whose rules do not allow illegitimate transfers. This design decision guarantees that the Zether’s security only relies on itself, instead of depending on other outside smart contracts, even a maliciously written or insecure smart contract cannot cause Zether to mislead.
Privacy coins offer users with more obscurity and are regarded with mixed feelings both from the community and government. In order to develop a privacy mechanism, Charlie Lee, Litecoin developer, announced last month that he would focus on creating a major Cryptocurrency that will more fungible and private.