A group of developers have been hard at work building a new privacy protocol for Ethereum that could be applied to any ERC20 compliant token to make them de facto privacy tokens. Currently, privacy tokens are built with the specific purpose of being privacy-focused in mind, but Zether could completely change the game and allow other tokens to join the privacy token crowd. The Zether protocol allows for the concealing of transaction values by using encryption, it is essentially a smart contract that can be executed to send confidential amounts of tokens between two parties.
Big Name Backers
When it comes to a new protocol being launched on a big name blockchain network like Ethereum, it needs to have major backers – something Zether has. Two of the protocol’s authors – Shashank Agrawal and Mahdi Zamani – both have undertaken work for the Visa research lab and the other two authors are Stanford University Cryptographers – Dr. Dan Boneh and Benedikt Bünz – and had serious input on the Monero Bulletproof integration.
I just finished a deep dive into Zether, a novel cryptocurrency protocol from researchers at Stanford and Visa. I am blown away with the work they have done. https://t.co/MhHfNpiwi3 /1
— Jordan Clifford (@jcliff42) February 25, 2019
How Would Zether Work?
Zether proposes some rather complex processes and procedures to pull off complete privacy, but we’re going to do our best to break it down. A user would fund the Zether contract with a compatible token, receiving ZTH tokens in return. This value can be transferred with its value concealed and the recipient can then burn their ZTH tokens and receive their original tokens back.
Ethereum Focusing on Scalability
While giving Ethereum the ability to have private transactions would be a great step forward for the network, for now it’s focusing on its scalability issues. Last year a rogue dApp forced gas prices to the highest levels ever seen by flooding the network with traffic. In a bid to combat this, the Ethereum Foundation issued two grants to companies focused on creating scalability solutions for the network.
The potential that Zether offers for the Ethereum network is exciting, as we could soon see a well-tested and well-known blockchain network suddenly offer privacy-focused transactions. This could tip the balance in the battle for dApp network supremacy as move developers flock back to the Ethereum network. Should Zether go live, we could see Tron spouting out some news about implementing a similar protocol in a bid to keep up. While it’s still a theory it uses a lot of the same concepts that Bulletproof does, meaning we could see it enter production in early 2020.
