Public transaction history in blockchains represents one of their key features which, alongside immutability, aim to provide an alternative to CeFi. However, this transparency comes at a price: privacy. As a result, different solutions have been proposed, that preserve privacy while maintaining all the other benefits of blockchain technology, but there currently isn't a one-size-fits-all answer to this problem. For example, zero knowledge proofs convey the validity of a transaction batch without sharing any other details, but the underlying arithmetic circuits are both complex as well as computational intensive. Umbra proposes a system that relies completely on elliptic curve cryptography, employing multiple private-public key pairs to achieve stealth payments.
We were joined by Ben DiFrancesco, founder & CEO of ScopeLift, to talk about Umbra's privacy preserving stealth token transfer system and if the need for privacy on blockchains outweighs any implicit UX frictions.
Topics covered in this episode:
- Ben’s background
- Umbra's mission
- How Umbra works
- Non-interactive key distribution
- Potential solutions (& trade-offs) for Umbra's computational intensity
- Generating private-public key pairs by the Umbra smart contract
- User experience (UX) for senders and receivers
- Fee structure for deterring griefing attacks
- How Umbra works for ERC20 tokens & NFTs
- Privacy preserving withdrawals from stealth addresses
- Privacy vs. UX friction
- Smart wallets & account abstraction
- Prioritising privacy
Episode links:
This episode is hosted by Friederike Ernst. Show notes and listening options: epicenter.tv/496
