Ethereum, the world’s second largest crypto, has come under scrutiny over Privacy concerns regarding staked Eth.
An Ethereum Foundation researcher revealed that staking Ether (ETH) reveals a user’s IP address information. This has sparked concerns about privacy in the cryptocurrency community.
The revelation was made by Justin Drake, a researcher at the Ethereum Foundation, during an interview on a podcast on April 12.
Drake stated that the IP addresses of Ether stakers are monitored as part of a broader set of metadata used to track deposit addresses, withdrawal addresses, fee recipients, and IP addresses.
This metadata is used to identify the most involved Ethereum citizens and create a Sybil-resistant dataset.
Drake’s comments caused a stir on Crypto Twitter, with one user referring to Ether as the “real surveillance coin.”
Another user mocked Drake, saying, “We can stop censorship by censoring those we don’t like.”
One user suggested that Ethereum users take on-chain privacy responsibilities into their own hands by installing a Linux operating system, using a Virtual Private Network (VPN), and storing crypto assets on a hardware wallet such as Ledger.
This is not the first time that privacy concerns have been raised in the cryptocurrency community. In November, ConsenSys, the team behind Ethereum wallet Metamask, began collecting IP addresses to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
The revelation by Drake raises concerns about the extent to which users’ privacy is compromised when staking Ether.
The collection of IP addresses is a standard practice, but the disclosure of this information can lead to identification and tracking.
This is particularly concerning given the decentralized nature of Ethereum and the fact that users may not be aware that their IP addresses are being monitored.
To address these concerns, the Ethereum community must take steps to ensure that users’ privacy is protected. This could include implementing technical measures such as encryption and anonymization, as well as promoting user education and awareness about the risks of disclosing personal information.
Ethereum Privacy Concerns
In Summary, the revelation that staking Ether reveals a user’s IP address information is a cause for concern for the Ethereum community. It is essential that the community takes proactive steps to protect users’ privacy and ensure that Ethereum remains a decentralized and secure platform for cryptocurrency transactions.