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Stealth Address

Stealth Address

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The stealth address system is based on a mechanism that would allow any wallet owner to generate cryptographically obscure public addresses called "stealth addresses'' in order to receive funds in a private manner and access them using a special code called a "spending key.”

Cryptocurrency wallet addresses are publicly available and transactions can be traced. In the instance that your name or other information is associated publicly with your wallet address, the transactions that you make on the blockchain can be traced back to you. A cryptocurrency stealth address is a single-use wallet address used to create more anonymity in cryptocurrency transactions ensuring that no one can trace payments back to you.

A stealth address acts as a proxy for your wallet address. When you use a stealth address, the blockchain records the transaction and enters the proxy address — hence hiding your public address. A stealth address can be created using different protocols or mechanisms within a cryptocurrency wallet as long as it supports it.

Ethereum co-founder Vitalik Buterin suggested using ZK-SNARKs, shorthand for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, to boost privacy and make it difficult to link the stealth addresses.
There are several different ways to go about creating stealth addresses. For example, Monero uses a three-tier system for privacy: ring transactions, stealth addresses, and RingCT, which act together to place your address behind another and confuse any prying eyes.
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