NFT Weekly: Ethereum Founder Pitches Stealth NFTs

Ethereum creator Vitalik Buterin has chimed in on a proposal to create a privacy-focused non-fungible token (NFT) technology that allows users to create an NFT that is not easily traceable.

While the proposal itself is very technical, the basic idea is for an NFT that can generate a “stealth address,” which he said was a “low-tech approach to adding a significant amount of privacy to the NFT ecosystem.”

Idea: stealth addresses for ERC721s.

A low-tech approach to adding a significant amount of privacy to the NFT ecosystem.

So you can e.g. send an NFT to vitalik.eth without anyone but me (the new owner) being able to see who the new owner is.

— vitalik.eth (@VitalikButerin) August 8, 2022

Using this technology, Buterin said, “for example, you would be able to send an NFT to vitalik.eth without anyone but me (the new owner) being able to see who the new owner is.”

No one else, he said, would even be able to see that the NFT had been sent to his Ethereum Name Service address — basically a Web3 blockchain address for a crypto wallet — but rather that someone had received it.

One challenge with the privacy-focused idea is how you pay fees. Buterin said all he could come up with was overpaying estimated fees “by 5-50 times.”

The timing of his comment, early in the morning on August 8, was interesting, showing a potential problem with stealth NFTs.

In the comments he linked to, Buterin suggests using the Tornado Cash mixing service to send the fees — hours before the Treasury Department announced sanctions against the DeFi service, alleging it was widely used by North Korean hackers to launder stolen crypto to fund the villain. the state’s nuclear program.

See also: With Tornado Cash Sanctions, Feds seek to lift Crypto’s veil of anonymity

Mixing services and privacy coins have come under increasing political and legal pressure as opponents claim they are widely used by criminals and make it much easier for them to launder money.

Instagram increases flow

Meta-owned social network Instagram announced this week that it is expanding the ability for NFT owners to display their digital artwork and collectibles to “100 countries in Africa, Asia-Pacific, the Middle East and the Americas,” as well as adding the ability to connect to Coinbase Wallet and Dapper Wallet, and support the ability to post digital collectibles minted on the Flow blockchain.

Read more: Instagram is testing NFT sharing with select creators, collectors

With 1 billion users, Instagram is three times the size of Twitter, which was the first major social media company to embrace the use of NFTs. However, Instagram will display them much larger than Twitter, which focused the use of NFTs on user thumbnail portraits.

Meta described the Instagram movement as a way to support creators’ ability to take more control of their work, build relationships with fans and monetize their creations.

“With the incredible opportunity of blockchain technology, they can now leverage new monetization tools and fans can support their favorite creators by purchasing digital collectibles – art, photos and videos, music or trading cards – as non-fungible tokens (NFTs) .”

Spread the wealth

Absolutely, people buy. Blockchain data firm Nansen said this week that its analysis shows that $2.7 billion was spent minting new NFTs on Ethereum in the first half of the year.

NFTs are among the biggest prizes Ethereum killer blockchains are seeking to pry away from the No. 2 blockchain, which has the vast majority of NFT business.

Flow, the #27 blockchain by market capitalization, is in that position mainly because Instagram added support for NFTs minted on the blockchain. Blockchain’s original FLOW token surged more than 40% on August 4, when the announcement was made, and has maintained those gains.

What’s behind it is not only that Flow gets a huge new market for its NFTs, but the need for NFT developers and buyers to drop Ethereum, which brings very high fees for creating and buying NFTs.

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