{"id":479301,"date":"2021-12-20T09:20:42","date_gmt":"2021-12-20T09:20:42","guid":{"rendered":"https:\/\/shenyangcang.com\/?p=479301"},"modified":"2021-12-20T09:21:09","modified_gmt":"2021-12-20T09:21:09","slug":"the-blockchain-that-brings-privacy-to-the-masses","status":"publish","type":"post","link":"https:\/\/shenyangcang.com\/news\/company\/the-blockchain-that-brings-privacy-to-the-masses\/","title":{"rendered":"The Blockchain that Brings Privacy to the Masses"},"content":{"rendered":"
In 2009, Satoshi Nakamoto released Bitcoin unto the world, and with it, a technology with the potential to define the next century: blockchain.<\/p>\n
As a default, blockchains secure transactions with a level of privacy exceeding that which is achievable through centralized payment networks. Consensus mechanisms such as Proof of Work (PoW) and Proof of Stake (PoS) provide methods for decentralized consensus, allowing cryptocurrency networks to settle transactions without a centralized authority.<\/p>\n
However, experts amongst the cryptocurrency community are expressing concern over whether this level of privacy is enough given developments in modern anti-privacy technologies.<\/p>\n
Banks and centralized payment networks like Visa have no choice but to record personal transaction data \u2013 sender and receiver names, amounts, times, locations, and often the types of goods or services purchased \u2013 in order to facilitate the movement of money and protect users from fraud.<\/p>\n
While blockchains are advantaged in this regard, the privacy they provide is not perfect. Sender and receiver wallet addresses, as well as transaction amounts, are stored permanently on blockchains for all to see. Bitcoin.org<\/a> describes how this applies to the Bitcoin network:<\/p>\n \u201cAll Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network. Bitcoin addresses are the only information used to define where bitcoins are allocated and where they are sent. These addresses are created privately by each user’s wallets. However, once addresses are used, they become tainted by the history of all transactions they are involved with. Anyone can see the balance and all transactions of any address.\u201d<\/em><\/p>\n To combat this, many have turned to tumbling services that send transactions through a plethora of wallet addresses in an attempt to obfuscate transaction origins and destinations. However, both researchers and adversaries have had 12 years to crack high-volume blockchain transaction tracing. Today, blockchain analysis software makes it possible<\/a> to rapidly trace tumbled transactions and associate wallet addresses with each other.<\/p>\n Further, most people enter the cryptocurrency market through centralized exchanges like Coinbase which require their members to pass KYC (Know Your Customer), a process used to verify the identities of individuals in accordance with regulations. This means that all transaction chains originating from centralized exchanges are traceable and easily tied to their members\u2019 real identities.<\/p>\n Clearly, an upgrade is needed if our financial privacy, and to an extent, our freedoms, are to survive modern blockchain tracing techniques and encroaching regulations.<\/p>\n Some cryptocurrency projects, aptly named \u201cprivacy coins\u201d, have taken it upon themselves to solve the privacy gaps in previous-generation blockchain protocols.<\/p>\n Monero<\/a>, Zcash<\/a>, and PIVX<\/a> are popular options, but concern over whether they have kept up with evolving privacy needs grows within the cryptocurrency community. Many security experts are instead turning to Navcoin<\/a>, a future-oriented privacy project that supports public transactions through its NAV token and completely private transactions through its xNAV token.<\/p>\n xNAV uses Navcoin\u2019s self-developed privacy protocol \u201cblsCT\u201d to protect transaction data from prying eyes. BlsCT does so by combining all transactions within a block into one, then distributing xNAV tokens to wallets without revealing their addresses or balances to the public. This effectively breaks the link between transaction inputs and outputs, making it impossible to identify which wallets participated in which transactions.<\/p>\n xNAV takes user privacy even further by solving a threat factor that most cryptocurrency users are not aware of: IP tracing.<\/p>\n When a transaction is sent through a cryptocurrency network, the sender\u2019s IP is revealed to neighboring nodes. This means that transactions can be associated with IP addresses, making it possible to trace the physical origination of transactions.<\/p>\nImproving Blockchain Privacy<\/h2>\n