Congratulations on The Merge — now to cure the hangover with a strong dose of privacy!

---

The transition to a POS consensus algorithm has been an aim since the very beginning of the Ethereum network and is a major milestone for the community. Congratulations are in order! It was a long time coming.

In fact, the transition was so important to so many of you that you managed to achieve this fundamental adjustment to the core protocol affecting the hundreds of billions of $ worth tied up in this global decentralised infrastructure. This shows that when something really matters to a community it can lead to real change at a global scale.

We are convinced that it is necessary for a similar urgency and mobilisation to grow around the right to privacy and anonymity in our digital lives. If it is possible for POS, it is possible for privacy.

For many people, privacy in and of itself doesn’t mean a whole lot. What is more important are the things it enables: dignity, autonomy, the ability to make mistakes and learn and the ability to make independent decisions. And, importantly, privacy enables security.

Just last week, the Nym team was in Ukraine for the Kyiv Tech Summit, joined by none other than the Vice Prime Minister and Minister of Digital Transformation Mykhailo Fedorov and Vitalik Buterin who arrived for the final day to show his support.

The relationship between privacy and security were major themes throughout the summit and included in discussions about The Merge. New risks of privacy, censorship resistance and MEV were raised at the Security Leaders panel by Nym panellist Jaya Klara Brekke, to fellow panellists were Dyma Budorin, Co-Founder of Hacken and Peter Robinson, Technical Director & Applied Cryptographer at Consensys. Below we will go into more detail on what is at stake in the transition — nothing less than the security and censorship resistance capabilities of the Ethereum network.

Validator privacy — why does it matter

Ethereum is transitioning to POS. In short, this means that instead of nodes all competing with each other in a race to compute the next block on the blockchain, validator nodes take turns doing so one by one, thereby radically reducing energy consumption and cost.

The way this works is that validators put up a stake in order to get a turn at computing a block. A validator is chosen at random and in order to make sure that a validator does not misbehave, a ‘committee’ of other validators check the block and sign it.

This results in two things:

• Validators need to know in advance who is going to create the next block
• there is a lot of resulting communication between validators

Now add to that the fact that currently, network layer traffic is visible and IP addresses of validators can be linked, and a number of problems crop up: knowing who is next in turn and their IP address means that the given validator becomes vulnerable to a number of attacks, from MEV Bots and DDoS attacks to targeted censorship.

We don’t think that burying your head in the sand is a good idea for such an important issue especially when you, the community, will have to bear the consequences. Addressing the problem of privacy in Ethereum at a network level could solve not just the MEV problem, but also contribute to both censorship resistance and traffic analysis resistance of the network in general and provide you all the privacy protection that you deserve. Here is how…

Validator privacy — protecting against censorship at the network layer

It is possible to protect validator IP addresses and thereby radically improve the security of POS. IP addresses leak with every tx or message that is sent. And a good VPN is just not enough because traffic patterns can effectively be used to deanonymise communications.

Traffic analysis is one of the primary means through which people are de-anonymised in network infrastructure including blockchains. It has been known for a long time that despite the pseudonymity of wallet addresses, simple traffic analysis can reveal a person’s identity and much more. This is the case for Bitcoin and Ethereum as well as for privacy coins and traditional messaging apps. It is the case for communications between clients and nodes, as well as between validators.

Providing network layer privacy by default ensures that the patterns of communication cannot be analysed as peer-to-peer tx are broadcast across the network. Mixnets, that protect traffic at the network layer, solves this problem by encrypting packets, making them all uniform and mixing them through three layers of mix nodes, effectively obscuring metadata and patterns of communication.

Manipulation and censorship resistance

Validator privacy also contributes to censorship resistance. When an attacker knows in advance who is making the next block, that means it is vulnerable to an intervening authority who might censor a given block. Of course, another validator could simply pick it up in the next turn, however it is important to emphasise that this requires a sufficient amount of validators, spread across jurisdictions and geographical areas to ensure enough network redundancy, should a set of validators face pressure from censors in parts of the world. Validator privacy adds essential security by obscuring which validators are creating a given block, thereby protecting the network from pressures to manipulate or drop blocks.

Join the Universal Privacy Alliance

Nym is a mixnet that protects the network layer — key for validator privacy thereby contributing essential security to the Ethereum network.

The privacy problems in Web3 are major. In some senses even more so than in Web 2.0 due to the public nature of ledgers. There is however a new generation of projects that are working to solve privacy at all layers of the stack.

Be part of making privacy the next major milestone: not just on the Ethereum network but all new network infrastructures that are keen to build digital autonomy.

A new alliance is launching and will be open to those keen to take action — find out more and register your interest on Discord.

Privacy loves company

Discord // Telegram // Element // Twitter

The internet is global and so is Nym: join the Nym Community wherever you are and help build the private internet today.

English // 中文 // Русский // Türkçe // Tiếng Việt // 日本 // Française // Español // Português // 한국인