The Cypherpunk theme for Ergo’s first ErgoHack of 2023 looks to inspire ideas relating to cryptocurrencies’ first principles. Since its inception, optional privacy and robust security have been recognized as some of Ergo’s identifying features. One of the first dApps deployed on Ergo was the first non-interactive, non-custodial mixer in the cryptocurrency industry. With Ergo, the tooling is in place to create financial products that are decentralized, permissionless and promote autonomy for the ordinary person.
Exploring the use cases of security and privacy tools in cryptocurrency
During the 2022 Ergo Summit, the founder of Ergo, Alex Chepurnoy, spoke at great length on the topic of privacy and security. He offered an in-depth presentation on the various use cases for certain privacy applications, such as Schnorr signatures, mixers, stealth addresses and other various aspects of privacy tooling. Let’s take a brief look at some of the features he discussed:
- Schnorr signatures essentially “enable a transaction to be signed with a single signature, regardless of how many addresses the funds are being sent from.” The primary utility of Schnorr signatures is to allow for enhanced privacy while securing one’s cryptocurrency. In order to improve the security and privacy of your transactions, one can use multiple signatures when sending transactions. This can involve requiring approval from multiple people or devices - known as multisig. However, some people prefer to keep everything private for reasons of their own. With the implementation of Schnorr signatures, these types of signatures are blended in with regular ones.
- The ErgoMixer’s primary use case is to allow users to send tokens and execute transactions whereby both sides of the transaction are private. The Ergomixer also reduces risk by being self custodial. Your coins and tokens are never in someone else’s possession when mixing.
- “Stealth addresses are a one-time wallet address used to create more anonymity in cryptocurrency transactions.” Alex Chepurnoy clarifies that they are a “tool to hide recipient privacy” (13:11-13:22). Due to the fact that crypto wallet addresses are public, transactions can be linked to respective addresses. Ross Weir, a developer building on Ergo, states that “if your name or other information is somehow associated publicly with your wallet address, transactions can be traced to you. A stealth address acts as a proxy for your wallet address.”
These are just a few examples of security and privacy tooling on the Ergo blockchain. Financial privacy is imperative in ensuring that people have protection from corrupt government surveillance and abuse, and that their sensitive financial information is not compromised. In a world where the financial playing field is not only uneven but also malicious at times, it is vital that the ordinary citizen have tools at their disposal to aid them in securing their financial autonomy.
The privacy features laid out in this article are just a few examples of what the Ergo blockchain currently offers. With ErgoHack VI, participants are hard at work developing new products that are inspired by Cypherpunk philosophies and how they may relate to privacy and security. What new tools and dApps will come from this exciting hackathon?
If you are interested in staying up to date on ErgoHack VI - Cypherpunk Finance, please visit the website and stay tuned to Ergo’s social media channels. ErgoHack VI runs from February 8-22, after which the jury will deliberate to decide the winners.