The benefits of Stealth Addresses - Overview | DeepOnion
Short introduction:
Unfortunately I'm not a good mathematician or computer scientist.
So when I read about upcoming stealth addresses yesterday on the DeepOnion forum and realized how great the community reception was, I decided to learn more about this topic.
So this article is basically a learning process of mine and also an overview for all of us.
(In the following I'll try to give simple and not so technical answers. I also like to use everyday examples to explain some things)
What is a Stealth Address?
Let's consider the following situation:
If you want to receive some DeepOnion from your friend John for example but you don't want anyone else to know about this transaction, then you have to send John a stealth address. This address can be public (for example on a donation website).
John generates now a random and unique address based on the address you gave him.
When John now sends the Onions there is no connection between your stealth address and other transaction addresses because only you as the recipient can deduce the secret key with the one-time address.
If you would have used your public address instead ( mine can be found in my signature) it is possible to track the way you spend or receive funds on the blockchain.
Stealth Addresses are very powerful and here's why:
- they add more privacy, trust and safety for users
- no payer will know anything about payments you received from other people
- only the sender and receiver can conclude where a payment was sent
- as you receive and send payments to seperate, unique addresses the blockchain can't correlate them
- no third party is involved or knows anything about the payments especially if there is no direct communication between sender and receiver
Sources:
https://bitcoin.stackexchange.com/questions/20701/what-is-a-stealth-address
https://www.mycryptopedia.com/everything-need-know-stealth-addresses/