Monero is a cryptocurrency that aims to provide strong privacy and anonymity for its users and transactions. Unlike Bitcoin, which uses a transparent ledger that reveals the sender, receiver, and amount of every transaction, Monero employs various cryptographic techniques to hide this information and protect the users from being traced or censored.
One of these techniques is stealth addresses. Stealth addresses create an additional layer of privacy by generating a one-time public key for each transaction. This means that the recipient of a Monero transaction cannot be linked to the transaction, even if the sender’s address is known.
However, stealth addresses have some limitations. For example, they do not allow third parties, such as auditors or regulators, to verify transactions without compromising the privacy of the users.
Dual-key stealth addresses address this limitation by using two pairs of cryptographic keys:
- Viewing key: This key allows the third party to view the balance and transaction history of the stealth address, but it cannot be used to spend the funds.
- Spend key: This key allows the third party to spend the funds from the stealth address, but it cannot be used to view the balance or transaction history.
This way, users can delegate some functions to trusted entities without sacrificing their privacy or security. For example, a user could allow an auditor to verify their income and taxes using the viewing key, while hiding their spending habits with the spend key.
Benefits of dual-key stealth addresses
Dual-key stealth addresses offer a number of benefits over traditional stealth addresses, including:
- Improved privacy: The use of two separate keys makes it more difficult for third parties to link the viewing key to the spend key, which improves the overall privacy of the stealth address.
- Reduced computational overhead: The use of two separate keys allows blockchain nodes to only scan the transactions that they are authorized to view, which reduces the computational overhead of the network.
- Increased scalability: The use of two separate keys makes it possible to support more transactions per second, which improves the scalability of the network.
- Delegated functionality: Dual-key stealth addresses allow users to delegate some functions to trusted entities without sacrificing their privacy or security. For example, a user could allow an auditor to verify their income and taxes using the viewing key, while hiding their spending habits with the spend key.
- Enhanced security: The use of two separate keys makes it more difficult for attackers to compromise the stealth address. Even if one key is compromised, the other key remains secure.
- Simplified key management: The use of two separate keys can simplify key management for users. Users only need to keep track of one key, the viewing key, which can be used to view the balance and transaction history of the stealth address. The spend key can be kept by a trusted third party, such as an auditor or a proxy server.
Overall, dual-key stealth addresses are a powerful privacy-enhancing technology that can be used to improve the privacy of Monero transactions. They offer a number of benefits over traditional stealth addresses, including improved privacy, reduced computational overhead, increased scalability, delegated functionality, enhanced security, and simplified key management.
Table of comparison
The following table compares the features of traditional stealth addresses and dual-key stealth addresses:
| Feature | Traditional stealth addresses | Dual-key stealth addresses |
|---|---|---|
| Privacy | Good | Excellent |
| Computational overhead | High | Low |
| Scalability | Low | High |