What is a stealth address?

Vitalik Buterin has recently published a blog on stealth addresses.

A stealth address is a one-time wallet address used to create anonymity in cryptocurrency transactions.

One of the advantages that blockchain technology provides is anonymity.

There are two parties involved in any transaction, the sender and the receiver. Both parties have a unique wallet address associated with their account. Whenever a transaction happens on a blockchain, the wallet addresses of the sender and the receiver are publicly available, obscuring their personal information.

However, if somehow you have associated your wallet address with your personal name, anywhere, then anybody, can easily track your details and reach you.

For example, if you are organizing a fundraising for some purpose and you have provided your wallet address for collecting the money, then anybody can track you via your details and a significant portion of your entire financial transaction will be public.

It is a loophole via which hackers with malicious intentions are taking advantage. Many cases have come to light where hackers have been draining coins from wallets by exploiting their publicly available data.

A stealth address is a one-time address that masks your public key. The sender creates a stealth address on behalf of the receiver. The blockchain will usually record the details of the transaction, but the stealth address will be used as a mask for the public address and the public address is hidden from everyone.

This way, the public address of the sender and receiver remains anonymous.

With that being said, people can also use stealth addresses to hide their illegal activities.

It can be used to evade taxes, that’s why regulatory authorities are keeping an eye on it.

What are your views on stealth addresses?

Source-

https://vitalik.ca/general/2023/01/20/stealth.html

https://www.investopedia.com/terms/s/stealth-address-cryptocurrency.asp