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What are stealth addresses, and how do they work?

What are stealth addresses, and how do they work?

Crypto stealth addresses, explained

The purpose of crypto stealth addresses is to enable privacy for each transaction, concealing the recipient’s identity and transaction history.

Crypto stealth addresses are a privacy-enhancing feature in blockchain technology that lets users receive money anonymously. Unlike conventional public addresses, stealth addresses provide distinct, one-time addresses for every transaction. The recipient’s actual address is kept secret when a sender transfers funds using a stealth address; the transaction is broadcast to the network. 

The recipient does not directly generate a private key from the stealth address; the wallet is designed to identify incoming transactions. It then utilizes the private key associated with the recipient’s public address to facilitate the recognition and processing of these transactions. This process allows the recipient to access and control the received funds without exposing their primary address. 

As a result, the privacy of cryptocurrency transactions is significantly increased, shielding users from potential monitoring or examination of their financial activity. Crypto stealth addresses support the continued development of private and secure transactions within the blockchain ecosystem by adding additional protection.

Monero (XMR) is a prominent example of a cryptocurrency that uses stealth addresses. It uses a variety of features, including ring signatures and stealth addresses, to provide its users with increased privacy and anonymity. The recipient’s stealth address is used during a Monero transaction, making it challenging for outside observers to connect the sender, recipient and transaction amounts.

Stealth addresses vs. regular wallet addresses

Stealth addresses offer improved transaction privacy with unique, one-time addresses, whereas regular wallet addresses lack such privacy measures and are frequently static.

Stealth addresses resemble standard cryptocurrency addresses in appearance, typically consisting of a string of characters and digits. The key differences, though, are in their one-time usage and the cryptographic methods used to obfuscate the connection between the recipient’s real address and the stealth address. 

In contrast, when utilizing traditional wallet addresses, the repetition of a single address for multiple…

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