Vitalik Buterin: how to make cryptocurrency transactions anonymous. #Ethereum

Recently, Vitalik Buterin have developed a special algorithm that allowed users to make a number of transactions in the Ethereum network anonymous. Privacy policy will provide two smart contract that will mix transaction. Buterin says that such innovations may enter immediately, as it does not require an update of the basic Protocol.


The anonymity of the turnover will provide a special algorithm combining the percentage of transactions in the mixer that uses the registry at the end of the transaction. Provisions to increase the privacy of turnover are based on three main mechanisms: relay register, mixer and a pair of smart contracts.


Itself sensitive function will be called the “anonymity set”. The function can operate due to the significant number of users of the Ethereum network.


Buterin explained anonymity in this way, “for example, if I turned you 1 ETH, and you can't tell who exactly it was, but you can tell that it came from (me, Alice, Bob, or Charlie), then the anonymity set is of size 4. The anonymity the more payment degree of privacy.”


Co-founder of the cryptocurrency recognizes that the Ethereum ecosystem, there are significant problems with privacy. Despite the fact that transactions have complex functionality - you can track them on the system, the blockchain.


Users will have to pay for privacy, as anonymous transactions will be subject to a special tax, however, Buterin believes that the problem is not global. Most users do not need to be anonymous, so the function is optional.