Coinbase CEO Brian Armstrong has revealed that his team is making significant progress towards enabling private stablecoin transactions on the Ethereum layer-2 network, Base. This development is anticipated to provide a substantial enhancement to privacy on public blockchains.
"Base is building private transactions," Armstrong stated in a post on X on Tuesday. He further noted that Coinbase's acquisition of the crypto privacy platform Iron Fish in March was a strategic move to achieve this objective.
In response to Armstrong's announcement, many users inquired whether the new privacy solution would necessitate Know Your Client (KYC) checks. However, Armstrong did not directly address these concerns, indicating that more detailed information would be shared in the near future.
Privacy-shielded cryptocurrency transactions are highly valued by many users. They serve to protect sensitive personal financial data, prevent transactions from public scrutiny, and mitigate the risk of becoming targets for hackers or scammers.
Despite the demand for privacy solutions, several prominent innovators in the crypto space have faced significant legal challenges. This includes the prosecution of Tornado Cash developers Alexey Pertsev and Roman Storm, as well as the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill.
Iron Fish's Privacy Solution and its Implications for Base
It is important to note that Base's upcoming private transactions may not offer complete anonymity if they are implemented based on Iron Fish's current technology.
According to Iron Fish's official website, the platform utilizes zero-knowledge proofs and "view keys" to maintain transaction privacy. However, this system is designed to allow for data disclosure when requested by tax authorities or other enforcement agencies.
When users create an account with Iron Fish, they are provided with view keys. These keys enable them to grant "read-only access" to their transaction data if required by authorities.
Iron Fish's application of zero-knowledge proofs allows users to prove the validity of certain information without revealing all of the underlying data, sharing only the essential elements necessary for verification.
Iron Fish's crypto privacy solution is integrated with the cross-chain bridge, ChainPort. ChainPort incorporates a real-time threat detection system, which is intended to ensure that only legitimate funds are introduced into the Iron Fish network.
Existing Privacy Transaction Support on Iron Fish
Iron Fish already provides privacy solutions across more than 20 blockchains. This includes Base, where it facilitates a privacy-enhanced version of wrapped USDC (USDC) through its integration with ChainPort.
