As a seasoned analyst with over a decade of experience in the cryptocurrency industry, I find Vitalik Buterin’s recent blog post to be both insightful and timely. His emphasis on privacy and security for Web3 wallet users reflects his deep understanding of the challenges faced by blockchain technology and his commitment to improving it.
In a blog post on December 3rd, Vitalik Buterin – one of the co-founders of Ethereum – encouraged developers specializing in Web3 wallets to prioritize enhancing privacy and security aspects in their projects.
According to Buterin’s blog post, a user can fully utilize the advantages of decentralization, censorship resistance, security, privacy, and other features provided by Ethereum and its applications if their digital wallet shares these same characteristics as well.
Additionally, he suggested methods for streamlining transitions between Ethereum’s layer-2 (L2) solutions like Optimism and Arbitrum, making them more seamless.
On L2Beat’s data report, it is shown that Ethereum supports over 50 different layer-2 scaling networks, collectively managing a total worth exceeding $50 billion in value secured or “locked”.
Better privacy, security
Instead of limiting privacy functions to just a few advanced wallets, Web3 developers should ensure that all wallets include privacy elements as a standard feature, according to Buterin.
“[U]p until now, making private transfers on Ethereum has required users to explicitly download and use a ‘privacy wallet’,” he explained, adding:
“This adds great inconvenience and reduces the number of people who are willing to make private transfers. The solution is that private transfers need to be integrated directly into wallets.”
An alternative approach could be describing a wallet as “keeping part of a user’s wealth as a ‘confidential amount,’ held within a ‘privacy pool.’ This wallet then utilizes this confidential amount for executing transactions.
On November 26th, I was relieved to learn that a U.S. court sided with Tornado Cash, challenging the U.S. Treasury Department’s overreach in imposing sanctions on this privacy protocol. This ruling could open doors for further development of on-chain privacy solutions, which is excellent news for crypto investors like myself who value financial privacy and security.
Furthermore, Buterin suggested that multiple approval signatures should be incorporated within all Web3 wallets for enhanced security purposes. This means that multiple parties would need to approve transactions before they could be executed.
Cross-L2 transfers
Furthermore, Buterin encouraged developers of Web3 wallets to enhance their systems by incorporating functions that facilitate seamless token transfers between Layer 2 (L2) networks. This includes the ability to send tokens directly to another user’s wallet on a distinct L2 network.
Buterin suggested that your digital wallet should generate an address in a format similar to this: 0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045@optimism.eth. This includes the Optimism L2 suffix, which is added to the wallet address as you can see in this example.
As a researcher, I was informed about the proper usage of certain address formats. When I encounter such an address, I am advised to input it into the designated “To” field within my digital wallet. Upon clicking ‘Send’, my wallet should autonomously handle the transaction in the most appropriate manner possible.
Over the past few months, Buterin has encouraged Web3 developers to expedite the decentralization of layer-2 solutions. He has made it clear that he will only validate scaling solutions as part of “early stages” in his decentralization framework.
In a Sept. 12 X post, Buterin said he takes this “seriously” and that in 2025 he only plans to publicly mention layer-2 networks that have an active fraud-proof or validity-proof scheme in place.
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2024-12-03 20:01