On the challenges of enhancing blockchain privacy

Most blockchain and smart contract platforms store transactions publicly on the ledger. User accounts in these systems rely on public keys to prevent direct identification of the parties. However, various de-anonymization techniques have been used to disclose users’ data, highlighting the weakness of this approach. As a result, the implementation of certain decentralized applications is challenging, especially those involving personal and financial data. In this context, several solutions have been proposed to provide privacy for users of blockchain and smart contract applications. Nonetheless, implementing these solutions is not trivial and introduces additional challenges related to performance, transaction costs, and application complexity. This article describes the practical implementation of Miles2Coins, a blockchain application for buying and selling tokenized airline miles, and details the intricate process of integrating it with Anonymous Zether, a solution designed to provide privacy and anonymity for the parties involved in these transactions. The challenges faced during this integration are explored, revealing key limitations and highlighting the ongoing need for improved privacy approaches in this scenario.