Vitalik Buterin, who created Ethereum, wants to make private, NFT tokens whose owners cannot be found utilizing blockchain data.
The opinion was shared in a post called “ERC721 Extension for zk-SNARKs” on the Ethereum Research website. ERC721 for zk-SNARKs was made longer.
Nerolation suggested the change to ERC721, which is the NFT standard. He stated that his method was the precise execution of what Vitalik said when they were talking about private POAPs.
Vitalik spoke about the possible requirement for private Soulbound tokens in the paper he noted to explain the idea of Soulbound tokens to the public (SBTs). He told them, that privacy is an essential part of making this kind of ecosystem work well… If, one day in the future, being vaccinated becomes a POAP, one of the worst things we could do would be to make a system where the POAP is automatically publicized to let their medical decision be affected by what would look cool in their particular social circle.
The notion of using ZK-SNARK compliant ERC721 tokens seeks to solve this problem by using stealth addresses that have a hash of the user’s address, the token ID, and the user’s secret.
The data is then added to an on-chain Merkle tree, and tokens are held at an address that is derived from the user’s leaf in the Merkle tree.
To verify ownership of the token or NFT, an address must provide the stealth address “access to a private key” so that when a message is signed, the collated information can be handed to a leaf of the Merkle tree. The circuit would then be able to correspond to the “calculated and user-provided roots for verification.”
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Usually maintained addresses secret
Vitalik thinks there is a clearer and simpler way to solve the problem that would use much lighter-weight technology. He proposed using ordinary stealth addresses instead of Merkle trees, which are more complicated.
Vitalik pointed out that every user maintains a private key that can be used as the starting point of an elliptical curve group to create a new private key, similar to how stealth addresses are usually made.
So, it is possible to create a “one-time secret key” and use the base of the elliptical curve to figure out the affiliated public key.
When both the sender and the recipient use both the private and secret keys together, they can calculate a shared secret. Utilizing this shared secret, the information above is hashed to make a new address.
Vitalik comes to the judgment that an ERC20 token can be sent to this address by the sender,
The recipient will scan all submitted Svalues, yield the corresponding address for each Svalue, and if they discover an address including an ERC721 token they will record the address and key so they can keep track of their ERC721s and send them rapidly in the future.
Vitalik stated that Merkle trees and ZK-SNARKs are not required because “there is no way to make an “anonymity set” for ERC721.” His solution ensures that the data on the blockchain will show that an ERC721 token was dispatched to a certain address, but won’t reveal who the token’s real owner is.
Ethereum gas fees will get affected
The price of the solution may make it unattainable to use on the Ethereum mainnet. Vitalik’s solution may implicate gas costs that require the sender to transfer enough ETH to pay fees 5–50 times to send it farther.
The Ethereum open-source community will determine whether Vitalik’s idea is a more reasonable way to do things or not. Nevertheless, it is interesting to see that Vitalik seems to have acknowledged that the Ethereum ecosystem needs a certain level of solitude.
His discovery of SBT has made it feasible for tokenized assets to be utilized in a wide range of ways. He has also altered his mind about keeping some assets secret.
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