The privacy network Aztec has made the switch to Mainnet. Aztec enables the creation of private assets in Ethereum – and in the long run the encryption of smart contract codes. The second largest crypto network by market capitalization will receive additional possibilities to combine the transparency of the Ethereum Blockchain with improved data protection.
Since the Istanbul Hard Fork last December Ethereum has paved the way for data protection: The implementation of EIP [Ethereum Improvement Proposal] 152 enables Ethereum to process transactions of the Zcash privacy protocol cost-efficiently. The resulting interoperability with Zcash allows, among other things, Atomic Swaps – the instantaneous exchange of crypto currencies between two Blockchains – between Ethereum and Zcash.
Recently, another way has opened up that extends the public Ethereum Blockchain with privacy features. The mainnet of the Ethereum-based privacy protocol Aztec was officially launched. As the project announces on its medium website, Aztec initially comes with two technological core components. The Aztec Crypto Engine (ACE) checks the correctness of private transactions that are processed via smart contracts in Ethereum. The Privacy SDK [Software Development Kit] is designed to enable programmers of decentralized applications (dApps) to integrate private tokens into their dApps.
Zero Knowledge: Aztec hides Ethereum token
Aztec offers users the possibility to create their own private assets in the form of „zk tokens“. „Zk“ stands for Zero Knowledge. In cryptography, a Zero Knowledge Proof describes a method by which one party (the proofer) can prove to other parties (the verifiers) that it knows a value x without providing any information beyond that. Applied to crypto currencies, this means that two parties can exchange values (in the form of crypto tokens) with each other without revealing their respective identity or wallet address (and thus their „account balance“). ZKPs therefore promise much greater data protection than is often the case with transactions on public Blockchains (for example Bitcoin, Ethereum or Ripple – exceptions are Privcay Coins such as Monero).
First, Aztec enables dApp developers to include a zk variant of the Ethereum Stable Coin Dai (zk DAI) in their program. Within the next six weeks, six more zk tokens will be introduced into Aztec. In the medium term – the blog entry talks about two months – Aztec wants to enable developers to freely create their own assets. In addition, Aztec has so far only hidden the amount of the funds moved. Observers can currently still determine which addresses (or IDs) are trading with each other. In the long term, however, not only the user IDs, but ultimately also the code of Smart Contracts should be hidden from curious eyes.